Appears possible to make Russia gas payments under new decree

Register Now Russian President Vladimir Putin signed the decree on March 31 requiring EU buyers to pay in rubles for Russian gas via a new currency conversion mechanism or risk having supplies suspended.

In a guidance document sent to member states on April 21, the EC said it "appears possible" to pay for Russian gas after the adoption of the new decree without being in conflict with EU law.

"EU companies can ask their Russian counterparts to fulfil their contractual obligations in the same manner as before the adoption of the decree, ie. by depositing the due amount in euros or dollars," the EC said in the document.

"The decree does not preclude a payment process which is in line with the EU restrictive measures. However, the procedure for derogations from the requirements of the decree is not clear yet," it said.

An EC spokesperson told S&P Global Commodity Insights on April 22, however, that the EU's position remained that existing supply contracts should be honored.

"With our G7 partners, we have clearly expressed our position: agreed contracts must be respected," the EC spokesperson said.

"97% of the relevant contracts explicitly stipulate payment in euros or dollars. Companies with such contracts should not accede to Russian demands," the spokesperson said.

"The EU will continue to respond in a united manner to this latest attempt by Russia to circumvent our sanctions."

ZZ/PR