What do Eni and Uniper do to pay for Russian gas in rubles
Eni and Uniper have opened accounts in rubles to guarantee supplies of Russian gas. Are they violating European sanctions or not? The deepening of El Pais
The Italian Eni and the German Uniper – write De Miguel and Fariza in El Pais – have opened accounts in rubles to comply with the Kremlin's requests, while ensuring that payments will continue to be made in European currency.
Gas or sanctions? The main European customers of the Russian company Gazprom have been on the edge of the law for several weeks to keep imports of Russian gas without violating the sanctions imposed on Moscow by the European Union. The EU sanction prohibits fueling the reserves of the Russian central bank, a sanction the Kremlin is trying to neutralize by forcing European gas companies to pay in rubles. Importers have so far managed to avoid the impact of sanctions thanks to the loophole offered by the European Commission, which considers it acceptable to open a ruble account as long as the hydrocarbon bill is settled with a payment in euros.
So far, only two large European gas companies – Italy's Eni and Germany's Uniper – have publicly acknowledged that they have opened accounts in rubles for the purchase of Russian gas, as required by a Russian decree published on March 31, under penalty of being cut. of supplies. But the Bloomberg agency reported that about twenty companies have taken this step due to the inability to find alternatives to Russian gas at competitive prices. These figures, however, should be put on hold because the original source of the US agency's information is Russian state-owned Gazprom.
The European Commission, for its part, has assured that it has no evidence that any European company has violated the sanctions. The EU body has repeatedly pointed out that it is not forbidden to open an account in rubles or have commercial relations with Gazprombank, an entity excluded from the European blacklist precisely to allow the payment of energy imports. Brussels only requires gas companies to make sure the Russian company gets paid when the money comes in euros and that it doesn't use the money to carry out financial transactions involving the central bank.
The crime of violation of sanctions
European companies are extremely careful because a violation of sanctions can have serious criminal or administrative consequences, depending on the country. On Wednesday, the Commission even proposed to include non-compliance with sanctions in the list of European crimes punishable by severe sanctions and confiscation of assets. The list includes crimes such as terrorism, human trafficking and arms trafficking.
So far the gas companies have managed to square the circle and keep the gas flowing. Eni stated in a statement that the opening of two accounts with Gazprombank, one in euro and the other in Russian currency, "complies with the international sanctions framework". The Italian company said it had received confirmation from Gazprombank and the Russian authorities that "billing and payment will continue to be made in euros", as required by the contracts. And that the conversion into rubles will take place within 48 hours and without the involvement of the Russian central bank. Moscow has promised, according to Eni, that it will not interrupt supplies if the currency exchange is delayed for any reason.
In similar terms, but without giving details, Germany's Uniper said. "A conversion of the payment that respects the sanctions and the Russian decree must be possible," says a spokesman for the gas company. However, doubts remain as to whether the currency conversion formula fits the theoretically unavoidable penalties.
“We are in a gray area,” said Federico Santi, an analyst at the consulting firm Eurasia, in a recent note for clients. Santi warns, in line with the European Commission, that "leaving the conversion in the hands of Gazprombank may constitute a de facto loan and loans to the Russian government or its subsidiaries are prohibited by EU sanctions".
Vladimir Putin's government has every interest in making European energy companies accept its rules of the game, both for economic reasons – it focuses on the ruble – and for political reasons – it serves to show the dissent of European partners.
By calling for all the gas it sells to the EU bloc to be paid in its own currency, Moscow is pursuing three objectives: to fuel the division within the EU, to avoid accumulating money in euro-denominated accounts – at the risk that this entails for its interests – and support the national currency.
The first objective has not been fully achieved: although the gas companies and countries have taken different paths, so far no one has failed, at least not flagrantly, in compliance with Western sanctions. And although the change in the payment mechanism has caused tensions between European partners – some of which, like Poland, are in favor of not accepting any formula to avoid sanctions – the truth is that unity has been maintained and their main threat is the oil embargo.
On the economic front, Putin has been more successful. Its multibillion-dollar gas revenue, converted into ruble, has revitalized the Russian currency. Having collapsed in the early stages of the war, it is now at a five-year high.
EU sources also acknowledge that the March 31 decree provides the Kremlin with an arbitrary tool that will allow it to cut off gas supplies to any country it wishes. Gazprom has already turned off the tap on Poland and Bulgaria for refusing to open accounts in rubles. Soon after he did the same with Finland. Officially, for the same reason, although this third cut coincided with Helsinki's decision to seek NATO membership.
Except in these three countries, Russian gas continued to flow relatively normally through the pipelines linking Russia to the EU. In a few weeks, in fact, the pumping was higher than at the beginning of the year, before the start of the war. But both Brussels and the main capitals of the bloc are well aware that the process of uncoupling the fuel from Russia takes time and that Moscow can close the pipeline at any time and to any country.
(Extract from the press review of eprcomunicazione)
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/eni-uniper-gas-russo-rubli/ on Sun, 29 May 2022 15:00:43 +0000.