Germany, Italy approve Russian gas payment after Brussels nods: sources

In this illustration taken on March 8, 2022, a model of a natural gas pipeline is seen in front of the colors of the European Union and Russia flags displayed. REUTERS/Dado Ruvic/Illustration

MILAN/BERLIN, May 20 (Reuters) – Germany and Italy have told companies they can open ruble accounts to continue buying Russian gas without violating sanctions on Moscow, sources said.

The debate over Russia asking foreign buyers to pay for gas in rubles has tested the resolve of European governments to take a hard line against Moscow over the war in Ukraine.

Poland, Bulgaria and Finland have refused to comply with Moscow’s demands that importers pay for gas through Gazprom’s ruble account, and their supplies have been cut.

However, other member states have been reluctant to steer companies into action that could lead to Russia losing vital gas supplies that heat homes and power factories.

Brussels has given two sets of written guidance on how to buy Russian gas without violating sanctions, but the legal path remains murky as EU officials are also advising companies not to open rouble accounts with Gazprombank in closed-door meetings.

Some Brussels-based diplomats from EU member states said they believed the advice was deliberately vague to allow countries to open rouble accounts and continue to buy Russian gas.

“The impression is that it leaves the door open for business as usual,” said one diplomat, adding that, in their view, if companies in some countries open ruble accounts and companies in other countries do not, there may be Undermine EU unity with Russia.

“They need to create a level of creative ambiguity,” another diplomat said of the committee’s recommendations. “The purpose of creative blurring is to create enough space for all the different interpretations.”

The committee declined to comment on the discussions.

A spokesman for the committee said Thursday that it was “not advisable” for companies to open ruble accounts.read more

“Grey Area”

German gas importers have been told by Berlin that they can open ruble accounts to pay for Russian gas without violating sanctions, as long as their payments to Gazprombank are not in Russian currency, two sources told Reuters.

Germany, the region’s largest importer of Russian gas, has been working closely with the European Union to take action on the issue, the sources said.

A senior government source told Reuters that the Italian government has also spoken to the European Commission and obtained clear information on how to legally buy Russian gas.

This happened before the Italian energy company Eni (Enimi) The source said on Tuesday it said it had begun opening two accounts, one in euros and one in rubles.

“The decision is in line with the message from the sector,” the source said, referring to the European Commission’s energy arm.

Italian Prime Minister Mario Draghi said last week it was a “grey area” whether compliance with Russia’s payment scheme would violate sanctions, and there was no official ruling on the matter.

Draghi’s office declined to comment on Friday.

The EU said in its written guidance that companies could buy Russian gas without violating sanctions if they paid in the currency of existing contracts, and stated that doing so complied with their contractual obligations.

Most EU companies’ contracts with Gazprom are in euros or dollars.

However, the guidelines do not make it clear that opening a ruble account to convert these payments into Russian currency would violate EU sanctions.

Katja Yafimava, a senior fellow at the Oxford Institute for Energy Research, said there was no legal basis to suggest that opening a ruble account violated sanctions.

“There is nothing in the written guidance that prevents buyers from opening such accounts. While the European Commission’s oral statement creates ambiguity, it is the written guidance that matters,” she said.

Governments are responsible for enforcing EU sanctions, which are ratified by all 27 member states.

Brussels can take legal action against governments that fail to do so but member states disagree with gas payments.

Poland asked Brussels for clearer advice on whether companies can open ruble accounts.

A spokesman for the Dutch Ministry of Economic Affairs said the country was lobbying the EU for a clear position “to draw a clear line for the whole EU”.

Reporting by Markus Wacket, Stephen Jewkes, Giuseppe Fonte, Nina Chestney, Kate Abnett and Toby Sterling; Editing by David Clark

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