PUTIN UPDATED PROCEDURE FOR PAYMENT OF RUSSIAN GAS TO FOREIGN BUYERS

Russian President Vladimir Putin has canceled the requirement for foreign buyers of Russian gas to pay for it only through Gazprombank until sanctions against it are lifted. This is stated in the decree of the Head of State.

This decree invalidates the fifth subparagraph of paragraph 1 of the Decree of the President of the Russian Federation of December 30, 2022 No. 922, according to which the authorized bank - Gazprombank - carries out operations to credit funds from a foreign buyer to a special account of the Russian supplier for payments for gas supplies.

At the end of November, Washington imposed sanctions against Gazprombank and six of its foreign subsidiaries.

The new decree provides that payments for natural gas supplied by Russian suppliers using special ruble accounts of type “K” and special currency accounts of type “K”, provided for by the Decree of the President of the Russian Federation of March 31, 2022 No. 172, will not be made until the lifting of restrictive measures introduced against a bank authorized under paragraph 2 of this decree by foreign states and (or) international organizations engaged in hostile actions by Russian legal entities and individuals.

In addition, according to the decree, the obligation to pay for gas from the Russian Federation may be terminated in whole or in part by offsetting the counterclaims of the Russian supplier against the foreign buyer.

Repayment of the debt of a foreign buyer for gas supplies by crediting the account of the Russian supplier in rubles with an authorized bank is the basis for the resumption of gas supplies, as also follows from the document.

In March 2022, Putin announced the transfer of payments for gas supplies to EU countries and other states that had introduced restrictive measures against the Russian Federation in rubles in order to stop using dollars and euros in payments.

He then signed a corresponding decree establishing a new payment regime starting from April 1, 2022. This mechanism assumed that Gazprombank opened two accounts for a foreign buyer of gas: foreign currency and ruble. The buyer transferred funds to the first account in the currency specified in the gas supply contract, for example, euros. The bank then sold this currency on the Moscow Exchange and credited the proceeds to the account of the gas buyer. And payments to the gas supplier Gazprom were made from this ruble account.