After the Putin decree on the rouble: when gas transfers are prohibited according to the EU

After Putin’s Ruble Decree
When gas transfers are banned according to the EU

The May bill for Russian gas is due. Some countries are asking the European Commission for clarification on how to organize their transfer to Gazprom without violating the sanctions. Kremlin boss Putin has been demanding rubles since April and otherwise threatening to stop deliveries.

The European Commission is developing more specific guidelines on how EU countries can continue to pay for Russian gas supplies without violating sanctions against Moscow. “Many European energy companies are due to make the next payment to Gazprom in mid-May and try to better understand what they need to do,” EU Energy Commissioner Kadri Simson said after a special meeting of EU ministers responsible. . “EU countries and companies should have no illusions that they can count on the goodwill of Gazprom and the Russian authorities in this area.”

Russia halted gas supplies to Poland and Bulgaria last Wednesday after the two EU countries failed to agree on a new ruble payment system that Russia was demanding. To avoid similar measures in their countries, EU states have called for additional guidance.

Simson underlined that energy security in the EU is not threatened at this stage. Memory is more than 32% full. But you should be prepared for possible supply disruptions, Simson said.

Companies are not allowed to pay in rubles

The European Commission had already explained that the payment of gas deliveries in rubles demanded by Russia would violate the sanctions. When exchanging ruble money in a separate account, the money is in the hands of the Russian central bank, which is sanctioned by the EU. The European Commission does not believe the sanctions have been breached as long as companies continue to pay in euros and the payment is recognized as having been made before being exchanged for rubles. Around 97% of gas contracts in the EU are denominated in dollars or euros.

In late March, Kremlin leader Vladimir Putin demanded that Western countries open accounts with Gazprombank in Russia from April 1 in order to pay for Russian gas. Otherwise, deliveries for “unfriendly” countries would be stopped. According to a decree signed by Putin, payments can still be deposited into the Russian account in euros or dollars. Gazprombank converts the money into rubles and transfers the amount in Russian currency to Gazprom. If payments were not made, deliveries would be stopped, Putin had threatened.

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