After Putin's ruble decree: when gas transportation is prohibited according to the EU

After Putin decree the ruble
When gas transportation is prohibited according to the European Union

The May bill for Russian gas is due. Some countries are asking the EU Commission for clarification on how to arrange their transfer to Gazprom without violating sanctions. Putin has been demanding the head of the Kremlin for the ruble since April and has threatened to halt the deliveries.

The European Union Commission is developing more precise guidance on how EU countries can continue to pay for Russian gas supplies without violating sanctions against Moscow. “Many European energy companies have to make the next payment to Gazprom in mid-May and try to better understand what they should do,” EU Energy Commissioner Kadri Simsun said after a special meeting of responsible EU ministers. He added: “EU countries and companies should not be under the illusion that they can rely on the goodwill of Gazprom and the Russian authorities in this field.”

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

Simpson stressed that the EU’s energy security is not at risk at this point in time. Memory is more than 32 percent full. But you have to be prepared for possible supply disruptions, Simpson said.

Companies are not allowed to pay in rubles

The EU Commission has already made clear that the ruble payment of gas shipments requested by Russia violates sanctions. During the exchange of money in rubles in a separate account, the money is in the hands of the Central Bank of Russia, which is punishable by the European Union. The EU Commission does not believe that the sanctions have been violated as long as the companies continue to pay in euros and the payment is recognized as having been made before being replaced by the ruble. About 97 percent of gas contracts in the European Union are in dollars or euros.

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

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