Germany and Italy approved Russian gas payments after nod from Brussels – sources

By Stephen Jewkes and Markus Wacket

MILAN/BERLIN (Reuters) – Germany and Italy instructed firms they may open rouble accounts to maintain shopping for Russian gasoline with out breaching sanctions in opposition to Moscow following discussions with the European Union, sources mentioned.

The talk over Russia’s demand that overseas patrons pay for gasoline in roubles has examined the resolve of European governments to take a tough line in opposition to Moscow over the warfare in Ukraine.

Poland, Bulgaria and Finland have refused to adjust to Moscow’s demand that importers pay for gasoline through rouble accounts with Gazprombank and their provides have been minimize.

Different member states, nevertheless, have been unwilling to steer firms in direction of motion that would end in dropping very important provides of Russian gasoline that heats houses and powers factories.

Brussels has given two units of written steerage on purchase Russian gasoline with out breaching sanctions, however the authorized route stays foggy as EU officers additionally suggested corporations in a closed-door assembly to not open rouble accounts with Gazprombank.

Some diplomats in Brussels from EU member states mentioned they thought the recommendation was deliberately imprecise to allow international locations to open rouble accounts and hold shopping for Russian gasoline.

“One has the impression that it leaves the door open for enterprise as standard,” one diplomat mentioned, including that of their view it risked undermining EU unity in opposition to Russia if firms in some international locations opened rouble accounts however others didn’t.

“They wanted to create a degree of artistic ambiguity,” a second diplomat mentioned, referring to the Fee’s recommendation. “The aim of artistic ambiguity is to create simply sufficient room for all of the completely different interpretations.”

The Fee declined to touch upon the discussions.

A Fee spokesman mentioned on Thursday it was not “advisable” for firms to open rouble accounts.

‘GREY ZONE’

Two sources instructed Reuters that German gasoline importers have been instructed by Berlin they’ll open rouble accounts to pay for Russian gasoline with out violating sanctions, so long as the funds they make to Gazprombank are usually not within the Russian foreign money.

The sources mentioned Germany, which is the most important importer of Russian gasoline within the area, had persistently acted on the difficulty in shut coordination with the EU.

The Italian authorities additionally spoke to the European Fee and obtained readability on purchase Russian gasoline legally, a senior authorities supply instructed Reuters.

That occurred earlier than Italian vitality firm Eni mentioned on Tuesday it had begun proceedings to open two accounts, one in euros and one in roubles, the supply mentioned.

“The choice is in keeping with what was communicated by the division,” the supply mentioned, referring to the European Fee’s vitality division.

Italian Prime Minister Mario Draghi mentioned final week that it was a “gray zone” whether or not complying with Russia’s cost scheme would breach sanctions, with no official ruling on the matter.

Draghi’s workplace declined to touch upon Friday.

In its written steerage, the EU mentioned firms should buy Russian gasoline with out breaching sanctions in the event that they pay within the foreign money of their current contracts – and declare that doing so fulfils their contractual obligations.

Most contracts EU corporations have with Gazprom are in euros or {dollars}.

The steerage didn’t explicitly say, nevertheless, that opening rouble accounts for these funds to be transformed into the Russian foreign money can be a breach of EU sanctions.

Katja Yafimava, senior analysis fellow on the Oxford Institute for Power Research, mentioned there was no authorized foundation to counsel that opening a rouble account violated sanctions.

“There may be nothing within the written steerage that stops patrons from opening such accounts. Whereas the European Fee verbal statements have created ambiguity, it’s the written steerage that issues,” she mentioned.

Nationwide governments are answerable for implementing EU sanctions, which have been accredited by all 27 member states.

Brussels may launch authorized motion in opposition to governments that fail to implement them however member states disagree on gasoline funds.

Poland has demanded clearer recommendation from Brussels on whether or not firms can open rouble account.

A spokesperson for the Dutch financial affairs ministry mentioned the nation was lobbying for a transparent EU stand, to “draw one line for the entire EU”.

(Reporting by Markus Wacket, Stephen Jewkes, Giuseppe Fonte, Nina Chestney, Kate Abnett and Toby Sterling; Modifying by David Clarke)