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EU Commission stands by its guidance on payments for Russian gas

Saturday, 14 May 2022 | 00:00

The European Commission stands by its previous guidance on how EU companies can pay for Russian gas without breaking sanctions on Russia and is in contact with EU governments to provide more explanations if needed, a Commission spokesman said on Friday.

The Commission said at the start of May that it would update its previous guidance on payment for Russian gas purchases as several EU governments and large importers said they were not sure if they could be seen as breaking the sanctions regime.

The Commission had said that EU firms would be in the clear if they paid in euros and declared the transaction completed at the moment of the transfer of the euros.

This would prevent them from being involved in dealing with the Russian central bank, which is under sanctions, and which under a decree of Russian President Vladimir Putin has to exchange the euros into roubles before the transaction is complete.

“Our position on that absolutely stands. The Russian central bank is subject to sanctions, so using this method… would be a breach of sanctions,” Commission spokesman Tim McPhie said, when asked about the update of the guidance.

“The commission spoke about updating our guidance and we continue to be in conversation with all the member states in terms of explain the situation,” he said.

“But the position remains that the decree, as it was announced previously and our guidance on how that decree intersects with our sanctions regime is unchanged and we continue to work closely with member states on this issue.”

One senior official from an EU country buying Russian gas said he did not expect any further updates from the Commission, noting the key question was when the transaction was completed.

“From a European point of view it is over when the money is paid in euros. Once the transaction is over, we don’t have any control anymore over what’s going to happen next – they will change it anyway into roubles,” the official said.

“The important thing is that the European country doesn’t order to change the money into roubles,” the official said.
Source: Reuters (Reporting by Jan Strupczewski Editing by Marguerita Choy)

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