EU warns Russian gas payment demands may breach sanctions

April 29, 2022 - The European Union has warned European buyers of Russian gas that they will be in breach of sanctions against Moscow if they accept Kremlin demands for payment to be completed in roubles.

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The warning comes after several European companies indicated they would comply with a March 31 decree by President Vladimir Putin to introduce a two-tiered system for gas payments, according to The Financial Times.

This involves opening rouble and euro accounts at Gazprombank in Russia. Under existing payment arrangements, most European companies were paying in euros into Gazprombank’s Luxembourg-based accounts.

Companies and national energy regulators are now in the invidious position of breaching EU sanctions, or defying Moscow and having gas supplies possibly cut off. The EU gets about 40 percent of its gas from Russia and some countries are almost completely reliant, the FT said.