Would paying for Russian gas in roubles breach EU sanctions?

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Paying for Russian gas in roubles would breach EU sanctions

Payment for Russian gas in roubles by European Union buyers, as mandated by President Vladimir Putin, would constitute a violation of the EU's existing sanctions regime against Moscow. This is due to the complex payment mechanism outlined in a Russian presidential decree, which effectively transfers control of the transaction to Russian authorities. An internal European Commission note has clarified that this process introduces new obligations for EU gas buyers, moving the final completion of the purchase beyond their direct control.
The Russian payment mechanism

President Putin's decree requires EU gas buyers to establish special accounts with Gazprombank. Payments would initially be made in contract currencies, such as euros or dollars, to Gazprombank. However, the purchase is only deemed complete once Gazprombank converts these funds into roubles and deposits them into a second, special account. This conversion and deposit process is overseen by Russia, specifically through its central bank, as stated in the Commission's note.
Breach of EU restrictive measures

The internal European Commission note highlights that this multi-layered payment process would breach existing EU restrictive measures. These measures have been adopted in response to Russia's actions and target Moscow, its government, the Central Bank of Russia, and their associated entities. By requiring the conversion of foreign currency into roubles through a Russian-controlled bank, the mechanism deprives European companies of control over their funds from the point of payment.
Loss of control and unpredictable costs

The Russian state, through its central bank, gains total control over the foreign currency once it enters this system. This control allows for potential manipulation of exchange rates to Russia's benefit, introducing unpredictable additional costs for European buyers. The Commission's assessment suggests that the completion of the payment occurs at an undefined moment, dependent on the conversion into roubles and credited to the second special account, thereby placing the entire transaction under Russian oversight.
National government stance

In response to the European Commission's assessment, the government of the Netherlands has announced it will instruct its companies not to proceed with payments for Russian gas in roubles. This decision by the Dutch government directly reflects the interpretation by the European Commission that such payments would violate the established sanctions framework.

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Would paying for Russian gas in roubles breach EU sanctions?

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