EU issues guidance on Russian gas payments in rubles
New guidance allows European companies to make payments to Russia without violating sanctions by fulfilling certain conditions
The European Commission has issued new guidance on how EU companies can pay for Russian gas in rubles without violating the bloc's sanctions, international media outlets reported on Tuesday.
The move came after the EU Commission last month announced that gas payments by European companies to Russia in rubles would be a violation of existing sanctions.
The new guidance says European companies can make payments to Russia by fulfilling certain conditions.
Companies can open an account in a bank designated by Russia for gas payments. However, these payments can only be made in the currency agreed on in their existing contracts. Transactions will be deemed complete when that currency is paid to the related bank.
Companies are also required to make a "clear statement" that paying euros or dollars fulfills their contractual obligations.
Since the companies will not deal with the Russian Central Bank while paying for their purchases in euros or dollars, they will not violate EU sanctions, according to the guide.
Russian President Vladimir Putin said on March 31 that 'unfriendly countries' must now pay for gas supplies in rubles after they froze Russian Central Bank currency assets over the Ukraine war, which began on Feb. 24.
Putin said that by freezing Russia's assets in dollars and euros, the West had effectively seized payments for fuel deliveries and taken them for free. He said Russia could not risk continuing trade in euros and dollars as new payments could also be frozen.
The country introduced a new payment system for gas imports, requiring a bank account in Gazprombank where payments in euros or dollars would be converted to rubles.
Russian energy giant Gazprom later announced that it had suspended gas deliveries to Bulgaria and Poland due to their refusal to pay in rubles.