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  • By The Financial District

Countries, Firms Paying Gas Bills In Rubles Violate Sanctions: EU

Senior European Union (EU) officials say countries or companies bowing fully to the terms of a Russian presidential decree insisting that they pay their gas bills in rubles will be in breach of the bloc’s sanctions, Lorne Cook reported for the Associated Press (AP).

Photo Insert: The dilemma spurs from the majority of EU countries being heavily dependent on Russian gas.

The Kremlin says importers should establish an account in dollars or euros at Russia’s Gazprombank, then a second account in rubles. They would pay the gas bill in euros or dollars and direct the bank to exchange the money for rubles.

The officials warn that Russia’s central bank could hold on to the money before converting it and in essence, use the funds as a temporary loan for the national economy or prop up the ruble. The EU’s sanctions prohibit any transaction with the Russian Central Bank.

One official said Thursday that “if the member-states and the European companies apply strictly the decree … it will constitute a breach of the sanctions.” His job description does not allow him to be named publicly. The violation essentially comes with the use of the second bank account.

The EU’s executive branch, the European Commission (EU), has said that companies could remain in compliance by paying in euros or dollars, as per their contract, and then notifying Gazprombank that their payment obligations are over.

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Ultimately, it’s up to the 27 EU countries to judge whether the rules are being broken. Some of those countries are heavily reliant on Russia for gas.

Speaking during a visit to Japan on Thursday, German Chancellor Olaf Scholz said that “it is a challenge that many European countries, including Germany, are dependent on imports of fossil resources from Russia.” Scholz said his government aims to end imports of Russian coal and oil this year.

Market & economy: Market economist in suit and tie reading reports and analysing charts in the office located in the financial district.

He said that “the same will happen for gas, but that is a process that will require more time.” Germany has already shipped to Ukraine a big number of Gephard tanks armed with anti-aircraft missiles to shoot down Russian planes and helicopters.

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