Ukraine to seize Russia's Gazprom property

Ukraine to seize Russia's Gazprom property

Ukraine’s supreme economic court dismissed on Tuesday the appeal of Russian energy giant Gazprom which was demanding a reversal of the decision of lower courts on enforced recovery of around $6.4 billion in fines from the country in favor of Ukraine, the committee’s lawyer Mikhail Novitsky said.

"The Anti-monopoly Committee received the ruling on opening up proceedings and on seizure of property," Sputnik cited the lawyer as saying.

Ukraine’s enforcement service opened proceedings to recover the $6.4-billion fine from Gazprom over alleged abuse of monopoly position on the gas transit market within the period from 2009 to 2015.

Earlier today. the Supreme Economic Court of Ukraine has dismissed an appeal by Gazprom on collecting a UAH 172 billion (about $6.4 billion) fine from the company for misusing its official position.

The director of the Center for Studies of World Energy Markets at the RAS Institute of Energy Research, Vyacheslav Kulagin, speaking to Vestnik Kavkaza, noted that the decision of Ukraine's Ministry of Justice is absurd due to the fact that the accusations of Ukraine's Anti-monopoly Committee are not applicable to Gazprom. "The Russian side does not agree with the claims about violations of the Ukrainian antimonopoly legislation, since Gazprom does not work on the territory of Ukraine. All gas supply operations inside Ukraine are carried out by Naftogaz," he explained.

In this regard, the implementation of the decision by collecting Gazprom's assets in Ukraine is questionable. "In fact, the only valuable Gazprom's asset that really exists on the territory of Ukraine is gas in pipes going to European consumers. Only Gazprom's gas on the territory of the country is worth a lot of money and it can be withdrawn in this regard, but if Ukraine resorts to such actions, it will lead to a halt in the supply of Russian gas to Europe, which will negatively affect many subsequent decisions of the EU," Vyacheslav Kulagin recalled.

Thus, since the arrest of Gazprom's only valuable asset in Ukraine will hit Europe instead of Russia, it will not have immediate consequences. "At the moment, it is an internal political game to create a possible lever of pressure. It is important that there was an additional point of risk for the supply of Russian gas to Europe. That is, Kiev itself is pushing the implementation of alternatives to the Ukrainian route - the Turkish Stream and the Nord Stream- 2. It is another incentive to run these projects as quickly as possible," the director of the Center for Studies of World Energy Markets at the RAS Institute of Energy Research concluded.

The deputy director of energy policy of the Institute of Energy and Finances, Alexey Belogoriev, agreed with Kulagin. "At least in the next 2-3 years it will not affect Gazprom in any way, since the company has practically no significant property in Ukraine. The only thing that can be considered such property is the flow of gas passing through the Ukrainian gas transportation system. And since this gas is intended for European Consumers, its arrest will pose a blow to Europe, which will greatly complicate Ukraine's political relations with the EU," he pointed out.

According to the expert, the decision itself was expected. "They are obliged to make any decisions to ensure the collection of the $6.4-billion fine - but nobody believes that it will be implemented. The arrest of Gazprom's property is another political game, there are no financial risks for our company," Alexey Belogoriev summed up.

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