Tuesday, July 23, 2024

But you can pay in euros or dollars only


Brussels – Europe opens up to “K account.“, but the payment in euros or dollars by EU companies must necessarily be considered completed at the time of payment of the amount and before the currency conversion. This will be the compromise found in Brussels and the governments and companies are informed, while the new deadlines for the balance of gas purchases are approaching. The dual objective is to provide methane and sanctions, allowing countries to continue paying for Russian supplies without violating restrictions.

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In Brussels, commission technicians are finalizing new and stricter guidelines requested by member states and companies to clear up the mystery that held the companies of the old continent hostage for a month and a half, after the publication of a decree under which the Kremlin obligated gas importers from “enemy” countries (including That all EU countries that imposed sanctions on Moscow after the invasion of Ukraine) pay their purchases in rubles according to a complex scheme that depends on two accounts with Gazprombank, the state energy monopoly bank: one in euros and the other in rubles. EU executives had published an initial thrust on April 21: a question-and-answer document outlining, as far as possible, Europe’s position on Russian dictates. However, the text left many capital letters confused, which guidelines could have been very vague and at times ambiguous. It is enough to ask the commission for more thought to provide more clarity to the business.

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Last Friday, the Executive Branch’s Directorate General of Energy summoned representatives of the 27 companies and importing companies involved to clarify the update of the previous guidance. However, as already in last month’s edition, Brussels did not get into the heart of the question of opening the second account in Gazprombank, the ruble-denominated account, which stopped a few steps ago. It points out to the companies that in order not to violate the sanctions, their payments must be accompanied by a declaration specifying that contractual obligations to Moscow have been exhausted with the balance in euros. A cautious decision not everyone likes, however, with countries calling for a tough line on Moscow, from Poland to the Baltic states, convinced that stricter rules are needed to avoid loopholes. The Kremlin decree, which instead refers to the actual conversion into rubles carried out by Gazprombank as the moment when the completion of the transaction is considered, does not provide a time window for making the change: waiting for that, in the interpretation of EU officials will end with the establishment of a de facto loan to the Central Bank of Russia , which is one of the facts that fell under the range of Western sanctions.

Last week, it was Gazprom that took what appeared to be a step towards Europe: in contact with customers, it confirmed that payments could be made in euros and that the country’s central bank would not have a direct role in the new mechanism devised by Moscow to support the ruble in the face of the impact of restrictive measures. According to the developments, even as the guidelines are updated, Brussels will continue to take advantage of the gray area created by Putin’s decree, without putting pen to paper that adherence to the K account system is prohibited. A few days before Washington, Prime Minister Mario Draghi stressed, “No one has ever said whether payments in rubles violate sanctions,” noting that “most importers have already opened their accounts in rubles” with Gazprombank.
A move to protect the continuity of supplies, at a crucial moment to replenish stocks in light of winter. Poland and Bulgaria, the two countries did not want to join the new Russian payment system, but instead closed their taps overnight.

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