A refinery of the Eni group in Taranto, southern Italy, on March 9, 2022 (AFP/Filippo MONTEFORTE)
The Italian energy giant Eni announced, on Tuesday, its intention to open an account in euros and another in rubles with Gazprombank to meet its payments for the supply of Russian gas due “in the coming days”, thus complying with Moscow’s demands.
Eni stressed in a press release that “the payment obligation can be fulfilled by converting the euro” and the new measure should not conflict with the existing sanctions “against Moscow imposed by the European Commission.”
Thus, it seems that the Italian group, which is controlled by the state in 30.3%, takes a view opposite to the recommendations of the European Commission, according to which the opening of an account in rubles constitutes a violation of sanctions and will lead to infringement actions. from Brussels.
A few hours before Eni’s announcement, Commission spokesman Eric Mammer had declared that “anything beyond the guidelines” that the commission provided to member states “would contravene the sanctions”.
He explained that these indicators are represented in “opening an account in the currencies stipulated in the contract, making the payment in this currency, and declaring the closure of payment for the delivery of the gas in question.”
Soon after, Finland, a candidate to join NATO, indicated that it feared cutting off Russian gas because of its refusal to pay Gazprom in rubles, like Poland and Bulgaria.
– Without the Russian Central Bank –
According to Eni, the Russian authorities confirmed that “invoices and payment will continue in euros” – the currency agreed in the contracts – and “an operator of the Moscow Exchange will carry out the conversion into rubles within 48 hours. Without the intervention of the Central Bank of Russia.”
Gazprombank offices in Moscow, on April 27, 2022 (AFP/Natalia KOLESNIKOVA)
The Kremlin decree introduced a new two-stage payment procedure, with first depositing into a Gazprombank account in euros or dollars, and then transferring to rubles in a second account opened with the same institution.
Initially, this transfer mechanism included a deal with the Russian Central Bank, which is prohibited by the European Union sanctions regime.
“At the request of the European Commission, the Italian group” Gazprom “made it clear that Eni will consider the payment obligations to be met through the conversion of the euro,” the group notes.
While Brussels has ruled on several occasions that this ruble conversion mechanism is a circumvention of EU sanctions, member states eager to preserve their supplies such as Germany and Italy have requested written explanations.
“Member states are responsible for compliance with the sanctions, and it is up to the national authorities to ensure that companies comply with the obligations under the sanctions” adopted by the commission, his spokesperson said.
– Avoid interrupted deliveries –
The group confirmed that Eni’s decision “was shared with Italian institutions”, before adding that it was related to avoiding a “potential interruption in supplies” of gas.
Italian Prime Minister Mario Draghi and US President Joe Biden in the Oval Office of the White House on May 10, 2022 (AFP/Nicolas Cam)
Italian Prime Minister Mario Draghi said he was “absolutely confident” last Wednesday that Italy could pay for Russian gas in May without violating sanctions.
“There is no official statement that the payments violate sanctions, so it’s a gray area,” he told reporters in Washington.
Italy is highly dependent on Russian gas as it imports 95% of the gas it consumes, of which about 40% came from Russia in 2021.
Germany, which is also heavily dependent on Russian gas, claims to want to comply with EU recommendations, but has remained unclear about the possibility of opening ruble accounts in the name of German companies at Gazprombank.
“Companies will pay their next bills in euros,” German Economy Minister Robert Habeck said on Monday, without specifying whether accounts could be opened in rubles. The mechanism would in any case be “sanctions compliant,” according to Mr. Habek.