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17 May, 01:40 PM

EU allows companies to sidestep sanctions and pay for Russian gas in rubles

During a closed meeting with EU diplomats, the European Commission – supported by Germany and France – outlined a scheme for European companies to pay for Russian gas in rubles without breaching EUsanctions, Polish news agency PAP reported on May 14.

Polish PM Mateusz Morawiecki delivered a sharp criticism of the commission’s advice, saying that Warsaw wants the EU to remain united in imposing “the most severe sanctions against Russia possible.”

“There is some leniency for gas payment in rubles; we are firmly against it,” Morawiecki said during a press conference on May 15.

“Let’s cut off the Russian hydrocarbons as quickly as possible.”

The European Commission’s guidance clearly states that EU sanctions “do not prevent economic operators from opening a bank account in a designated bank for payments due under contracts for the supply of natural gas in a gaseous state, in the currency specified in those contracts.”

And while this does not forbid EU importers of Russian natural gas from opening an account with Gazprombank – one of the very few major Russian banks that were exempt from Western sanctions – this would still be short of Moscow’s demands. Russian dictator Vladimir Putin’s decree specifies that importers of Russian gas have to open a second account in the bank – in rubles.

On May 16, Germany’s Economy Minister Robert Habeck said that German utility companies will be able to continue purchasing Russian gas in the coming months.

“The companies will pay their next bills in euros,” Habeck said.

He explained that the payments will be made in euro, and the money will then be internally transferred to “so-called K accounts” in Russian banks. It remains unclear if those “K accounts” are euro or ruble ones.

“That is, in my view, in conformity with the sanctions, also according to the EU commission,” the minister concluded.

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