Gazprombank: Italian energy giant opens ruble account - EU angry: "Sanction violation"

Created: 05/18/2022, 10:39 am

Italian energy giant Eni opens accounts with Gazprombank despite sanctions.

(Archive image) © Jakub Porzycki/Imago Images

Putin has ordered gas deliveries to be paid for in rubles.

Italian energy giant Eni is now opening ruble accounts with Gazprombank despite EU sanctions.

ROME – The Italian energy giant Eni is apparently bowing to Russian requirements for paying for gas deliveries.

The company will open an account in euros and one in rubles with Gazprombank “in the coming days”, Eni said on Tuesday.

In this way, the payment obligations in euros can be met, and the Russian bank will then convert them into rubles.

Despite sanctions: Energy giant Eni opens accounts with Gazprombank

Russian President Vladimir Putin had ordered gas deliveries to be paid for in rubles.

The Europeans see this as a subsequent change in the applicable treaties and reject this.

Companies complying with Russian demands risk being prosecuted for violating EU sanctions.

According to Eni, the Russian authorities confirmed that "invoicing and payment will continue to be made in euros" and "an operator of the Moscow Stock Exchange will carry out the conversion into rubles within 48 hours without the involvement of the Central Bank of Russia".

Initially, Moscow had envisaged a conversion mechanism via the central bank, but this would clearly violate EU sanctions.

Another Kremlin decree then introduced a new two-stage payment procedure, whereby first deposits are made in euros or dollars in one Gazprombank account and then converted into rubles in a second account at the same institution.

On Tuesday, however, a spokesman for the EU Commission confirmed that even opening a ruble account with Gazprombank constitutes a violation of EU sanctions.

Gazprombank: Will German importers also open ruble accounts?

However, the spokesman also stressed that it is up to the authorities of the EU member states to enforce compliance with the jointly agreed sanctions.

In the event of omissions, Brussels could initiate EU infringement proceedings against the member states.

When deciding to adapt to the new payment system via Gazprombank, Eni referred to agreements with the Italian authorities.

It's about avoiding "a potential disruption to the gas supply," the company said.

The Italian state holds a good 30 percent of Eni's shares.

As recently as April, the Italian government agreed to an embargo on gas from Russia – as long as the EU approves it.

Italy covers 95 percent of its gas needs with imports, of which around 40 percent came from Russia in 2021.

Germany is in a similar situation.

Economics Minister Robert Habeck (Greens) had assured on Monday that the EU requirements for gas payments would be met.

However, he remained vague on the details, for example on the question of whether German importers would open ruble accounts with Gazprombank.