Russia files suit in WTO against EU Third Energy Package

Russia filed a suit with the World Trade Organization on April 30 to begin judicial hearings on the application of the European Union's Third Energy Package, a source close to the WTO told Interfax.

Russia filed a suit with the World Trade Organization on April 30 to begin judicial hearings on the application of the European Union's Third Energy Package, a source close to the WTO told Interfax.

The chief trade negotiator at the Economic Development Ministry, Maxim Medvedkov confirmed that the suit has been filed.

He said that under the Third Energy Package the owners of mainline pipelines located in the EU cannot be companies that produce gas. They must either sell their assets in the EU or hand over management of their pipelines to independent companies from the EU. In addition, if the operator companies are controlled by foreign parties they must undergo special certification under which they are subject to additional requirements. For example, they must prove the absence of threats to the energy security of the EU, which is not required if the pipeline is controlled by EU companies.

"These and other elements of the Third Energy Package, in Russia's opinion, contradict the EU's obligations in the WTO concerning the basic principals of nondiscrimination and market access. The Third Energy Package creates a serious obstacle for ensuring stable supplies of Russian gas to the EU, including a threat to the construction of new transport infrastructure, such as under the South Stream project," Medvedkov said.

He said similar requirements are applied to projects in the area of electricity.

Medvedkov said that Russia has been trying unsuccessfully for a few years to resolve the problems on a bilateral basis, including at several summits.

Under WTO rules, Russia and the EU have two months to hold bilateral consultations, after which Moscow will be able to demand the formation of an arbitration panel to consider the substance of the suit, he said.

Medvedkov did not rule out that ways to resolve the problem might be found in the course of consultations, which are "intended by WTO procedures to find mutually acceptable solutions."

"We don't have a goal to go to court with Brussels for the sake of the judicial process itself, we want to ensure predictable conditions for exports to the EU in accordance with WTO rules," Medvedkov said.

He denied that there was a link between the WTO suit and the events concerning Ukraine. "These are absolutely unrelated things. We began to prepare the suit back at the end of last year, when it became clear that we won't resolve the problem any other way," Medvedkov said.

The number of WTO suits Russia has filled against the EU and vice versa is now even. Consultations and litigation is now underway on two EU suits against Russia concerning an automobile recycling levy and a ban on lead shipments, as well as a Russian suit against the EU on so-called energy adjustments.

Read more: Russia switching to prepayment terms in gas supplies to Ukraine starting June - Russian energy minister>>>

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