The EU has warned European buyers of Russian gas that they would violate sanctions against Moscow if they accepted the Kremlin’s demands for payment in rubles.
The warning, which is clearer than Brussels’ previous guidelines, comes after several European companies said they would comply with a March 31 decree by President Vladimir Putin to introduce a two-tier gas payment system.
This includes opening ruble and euro accounts with Gazprombank in Russia. Under existing payment agreements, most European companies paid in euros to Gazprombank accounts in Luxembourg.
According to people familiar with the preparation, gas distributors in Germany, Austria, Hungary and Slovakia have planned to comply.
“Compliance with the decree is a violation of sanctions,” European Commission chief spokesman Eric Mamer told a daily media briefing on Thursday.
“If companies pay in euros, they do not violate sanctions,” said an EU official. “What we cannot accept is that companies are obliged to open a second account in rubles and that the payment is completed only when the payment is converted into rubles.”
Companies and national energy regulators are now in a disgusting position to violate EU sanctions or oppose Moscow and possibly cut off gas supplies. The EU gets about 40 percent of its gas from Russia, and some countries rely almost entirely.
The EU believes that accepting the conclusion of gas deals in rubles, as Putin called for, would mean involving Russia’s central bank in transactions, which would violate sanctions imposed on Russia’s financial system in an attempt to thwart Putin’s ability to finance the war.
By clearing gas payments only when they are converted into rubles, Moscow is seeking to force European companies to circumvent sanctions against the central bank, an EU official said.
Gazprombank, the main financial arm of Russia’s monopoly gas supplier, has been deliberately excluded from EU sanctions, stressing how reluctant Europe is to cut off access to Russia’s vital gas supplies.
Gas importers in Poland and Bulgaria, who refused to join the Kremlin scheme, cut off gas supplies from Russia on Wednesday, a decision that European Commission President Ursula von der Leyen described as “blackmail”.
Two of the largest importers of Russian gas, the Dusseldorf-based Uniper and the Vienna-based OM, said they would be open to paying through the Russian system.
Supported by the Italian state, Eni, another of Gazprom’s biggest customers, is assessing its capabilities, according to two people familiar with the discussions.
Several governments have said the guidelines issued by the European Commission on Friday that companies can open an account with Gazprombank appear to approve the new method.
Mamer said Member States are responsible for enforcing sanctions, and the commission has consulted national authorities and gas suppliers to ensure compliance.
“If [a state] does not fulfill its obligations regarding the application of sanctions, the commission may conduct an infringement procedure against that member state, “he said. “We are not at this stage yet.”
About 97% of Russia’s gas contracts are denominated in euros or dollars, and companies must continue to pay with their usual means, he added.
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