EU Commission puts new conditions to signing of energy contracts

EPA/VASSIL DONEV

Alexey Miller, CEO of Russian energy giant Gazprom.

EU Commission puts new conditions to signing of energy contracts


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The EC wants to oblige member states to ask for its approval before signing contracts with the energy giant. According to draft bills prepared by the Commission, governments intending to conclude agreements with the Russian state-controlled giant Gazprom will have to report about their intentions as well as the process of negotiations.

The Commission, in its turn, has the right to send observers, who will supervise the compliance of the negotiated contracts with the European legislation. Although member states reserve the right not to reveal all the details of intergovernmental agreements, they have to disclose all principal terms such as the name of a contracting party, the subject of an agreement and its reason.

Innovations in European legislation do not concern the commercial contracts. In order to fill the gap, the Commission intends to make compulsory for all partners having concluded long-term contracts (more than one year) with external energy providers, to report about the terms, maximal and minimal volumes of supplies and the consequences of the termination of the contracts.

Such information would help the European authorities to undertake effective anti-crisis interventions in case of serious disruptions of energy supplies to the EU. However, the principle provision of the bill allows the Commission to get access to all terms of commercial contracts in member states in order to “evaluate their influence on energy security”.

The new initiatives prepared by the European Commission continue previous steps taken by the regulator targeting to limit the influence of the Russian Gazprom as well as to prevent member states from signing contracts contrary to the EU legislation, as it was in case of South Stream.  

The new measures, are on the background on the ongoing anti-trust case opened by the Commission in April 2015 against the Russian company, after eight EU eastern countries complained that Gazprom has charged them more for gas than what numerous Western European states pay.

Western governments have long accused Russia of using Gazprom as a political tool to bully its neighbors and sow discord among EU members.Charges against Gazprom were ready by 2014 but left aside due to concerns about further aggravating relations with Moscow following Russia’s military incursion into Ukraine.

 

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