LONDON (Bywire News) - The EU has softened its stance in the gas row with Russia by updating guidance which provides a way for countries to pay for Russian gas without breaching sanctions.
Russia’s government had stated that contracts would only be deemed as having been honoured if they were paid in Roubles. Unfortunately, this would inevitably mean dealing with Russia’s central bank which would inevitably be a breach of EU sanctions. Russia has already halted supplies to Poland and Bulgaria for refusing to comply with their payment demands.
However, these new guidelines suggest countries can still pay for their contracts as long as they do so in the currencies originally agreed in the contracts, usually dollars or euros. The guidance says companies can open a designated account and pay for their gas in the originally agreed currency. They should then clearly state that they consider their obligations discharged under the original terms of the contract.
The guidance states: “such payments in that currency discharge definitively the economic operator from the payment obligations under those contracts, without any further actions from their side as regards the payment.”
By ending its obligations once payment has been made in Euros or dollars countries can consider their obligations ended and not deal with the Russian central bank. Russia’s declaration states that the deal will only be considered fulfilled once the currency has been converted into Roubles. These could then be converted into Roubles satisfying Vladimir Putin’s demand.
The move will be seen as a major U turn by the bloc and saw the Rouble surge against the dollar.
(Writing by Tom Cropper, editing by Klaudia Fior)