EU demands paying in euros for Russian gas

The companies would also require other conditions on the transactions, such as a statement that they consider their contractual obligations complete once they have deposited the non-Russian currencies.

Moscow has cautioned Europe it risks having gas supplies cut unless it pays in roubles. In March, it published a decree proposing that energy buyers open accounts at Gazprombank to make payments in euros or dollars, which would then be altered to roubles.

The Commission stated companies should continue to pay the currency settled in their contracts with Gazprom (MCX: GAZP) – 97% of which are euros or dollars.

In an advisory document sent to member states on Thursday, the Commission expressed Russia’s proposal threatened to breach EU sanctions since it would put the practical completion of the purchase once the costs are converted to roubles into the hands of the Russian authorities.

The document could allow exemptions

Nevertheless, the Commission said that Moscow’s decree does not necessarily stop a payment process that would comply with EU sanctions against Russia over the Ukraine conflict.

Brussels said that options could permit companies to resume lawfully paying for gas in the document.

Nevertheless, the procedure for ensuring exemptions from the decree’s requirements is not yet detailed.

Before making payments, EU operators could also make a straightforward statement that they believe their contractual obligations to be completed when they deposit euros or dollars with Gazprombank instead of later after the payment is converted into roubles, the document stated.

The Commission’s advice is not legally binding but tries to steer the discussion while member states work out how they can resume paying for Russian gas.

The document expressed that the EU’s sanctions regime does not restrict companies from opening accounts with Gazprombank or engaging with the bank to pursue a solution.