Russia To Complain To WTO From EU Energy Laws

Energy | May 1, 2014, Thursday // 12:56|  views


Russia is to file its second formal complaint against the EU with the World Trade Organization (WTO) over the EU's so-called 'Third Energy Package', reports EUobserver. 

At the heart of the Russian complaint are expected to be EU provisions which prevent a single company from both owning and operating a gas pipeline. EU lawmakers agreed the rules, known as 'ownership unbundling', as part of its Energy Package on rules governing the bloc's gas and electricity market. 

The new framework, which was entered into effect in 2009, is aimed at stimulating competition in the EU's gas market and lower prices.

Under the Third Energy Package, if Gazprom wants to continue its presence on the EU market, it must be split in two companies – one that extracts gas and one that transports it. In addition, is the operating companies are controlled by non-EU entities, they must be certified to cover additional requirements. 

Russia claims that its state-owned energy giant Gazprom is the only company with the right to export gas and that the EU rules should not be backdated to cover contracts signed before 2009.

"These and other elements of the Third Energy Package, in the opinion of Russia, contradict the obligations of the EU in WTO on basic principles of non-discrimination and market access," Maksim Medvedkov, a trade spokesman in Russia's Economic development ministry, told Russian news agencies.

The Third Energy Package affects another major Russian gas interest – the South Stream gas pipeline. 

It violates three provisions in the framework – pipeline ownership, access of third parties to the pipes and the setting of transit fees. 

Russia claims that the South Stream project was international and EU rules are not applicable to it and that the first agreements were signed in 2008, before the Third Energy Package came into effect. 

Under WTO procedures, EU and Russian trade officials will have 60 days to try and settle their differences before further legal action is taken. The next step would be for the WTO to set up an arbitration panel to review the case. Ultimately, the WTO has the power to impose either a change of policy or economic sanctions.

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Tags: Gazprom, Russia, WTO, EU, Third Energy Package, South stream


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