Finland refuses Russian payment terms

Defiant Finland refuses Russian payment terms despite being in a no-win situation.

Finlands MINISTER of European Affairs and Ownership Steering Tytti Tuppurainen (SDP) reiterated on Thursday that the Finnish government will not consent to the terms imposed unilaterally on payments for natural gas by Russia.

“We won’t agree to the demands of Russia,” she declared in the Finnish Parliament.

The position may result in the halting of natural gas deliveries over non-compliance with payment terms when the next instalment is due, as happened earlier this week to Bulgaria and Poland.

Finland refuses Russian payment terms

Russia has demanded since the beginning of the month that natural gas buyers from “unfriendly countries” set up both foreign currency and rouble accounts with Gazprombank, the financial arm of Gazprom.

The buyers can deposit payments to the foreign currency account as usual, in euros or dollars, for example, but the bank has to convert them to roubles before transferring them to the state-owned gas giant and formally completing the payment.

The Finnish government’s position – that companies must not set up the rouble-denominated account – applies effectively to the state-owned energy company Gasum.

Some companies are finding loopholes

Tuppurainen said Uniper, some companies are finding loopholes the German subsidiary of majority state-owned energy company Fortum, must determine its course of action with the government of Germany.

“Uniper is a German company. It’s listed on the stock exchange in Germany and follows German law. The company has a high-level dialogue with decision-makers in Germany,” she said to WTX News.

Uniper has decided to comply with the new payment mechanism. Tiina Tuomela, the chief financial officer at Uniper, said to The Financial Times that the arrangement is lawful in light of the current sanctions regime.