Gazprom to challenge huge fine from Polish antimonopoly agency / News / News agency Inforos
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Gazprom to challenge huge fine from Polish antimonopoly agency

At the same time, the Russian company keeps getting with the plan to complete the Nord Stream 2 gas pipeline at the earliest opportunity

Gazprom to challenge huge fine from Polish antimonopoly agency
Context:

On October 7, the Polish authorities came with a high-profile decision: the Office for Competition and Consumer Protection (UOKiK) fined Gazprom for over 29 billion zlotys (some $7.6 billion). The official reason is the Nord Stream 2 gas pipeline construction without the necessary permission. According to UOKiK, in 2017, despite the lack of its consent to create a joint venture, the Russian company entered into a number of partnership agreements on Nord Stream 2 funding.

Apart from Gazprom, five other European energy companies involved in financing the gas pipeline project were slapped with the fine – Engie, Uniper, OMV, Shell and Wintershall. They are assigned to pay a total of 234 million zlotys. This is pretty much of a modest makeweight amid the huge claims against Gazprom.

The Polish agency imposed the maximum possible fine on the companies, accounting for 10% of their annual turnover. Besides, they are required to terminate contracts regarding Nord Stream 2 funding within 30 days. The amount of claims surprised even the European Commission (EC): its Executive Vice-President Margrethe Vestager considered the turnover-based fine too high, explaining that the EC usually fines by 4 to 6% of the turnover, very rarely – by 10%.

UOKiK's unprecedented financial claims against Gazprom and its Nord Stream 2 partners were preceded by a number of contextual claims. Pressure from the Polish regulator on the gas pipeline project is permanent.

In early August this year, UOKiK fined Gazprom 213 million zlotys for refusing to provide information about contracts concluded by its "sister" subsidiary with companies that finance Nord Stream 2 construction. On August 24, Gazprom challenged UOKiK's decision in the Polish court, filing appeals against decisions by Poland's antimonopoly regulator.

In 2018, the Polish authorities filed charges of financing the pipeline construction, allegedly carried out without the necessary permission from UOKiK, against six companies: Gazprom, Engie, Uniper, OMV, Shell and Wintershall. According to the regulator, if a transaction affects the domestic market of Poland or the turnover of a certain capital group reaches a particular amount, even when foreign companies are concerned, EU law and Polish law oblige them to inform the national antimonopoly authorities and provide them with certain information upon request.

In 2019, UOKiK imposed a fine of about 40 million euros on Engie on charges of systematic failures to convey on Nord Stream 2 construction information. The regulator then called it the largest fine in its history.

New financial claims against Gazprom do not pose a direct threat to the gas pipeline completion. The Russian company is not going to pay, but will file an appeal to be proceeded for many a year. Russian President's Press Secretary Dmitry Peskov commented on the situation, saying he was confident in Gazprom's legal tools to effectively protect the giant from UOKiK's claims in courts.

Poland's decision is testimony to the decisive phase of the ongoing battle against Nord Stream 2, by whatever means necessary. In the meantime, all those involved in the Trans-Baltic project have publicly lambasted Polish regulator's stance.

Gazprom keeps getting with the plan to complete the Nord Stream 2 gas pipeline at the earliest opportunity. The company announced this in the October leaflet associated with the new Eurobond transaction.

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