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Poland's anti-monopoly committee has slapped Russia's Gazprom with a $7.6bn fine for building the Nord Stream 2 gas pipeline without its permission in a case that is headed straight for the arbitration courts
Poland, Russia heading for long-running legal dispute over Nord Stream 2
this approval in 2016, forcing Gazprom to come up with a different plan.
Instead, the Russian company was lent funds by its European partners to cover half of Nord Stream 2’s cost, but UOKiK argues that these financing agreements effectively established a joint venture in all but name. The regulator said it had imposed the maximum penalty it could on Gazprom. It has also fined the company’s European partners some PLN234mn ($62mn), representing 10% of the annual turnover of their subsidiaries involved in Nord Stream 2.
Poland is among the staunchest opponents of Nord Stream 2 and Russian influence in Europe. Polish officials argue that Nord Stream 2 will undermine competition
in Poland’s gas market, and also enable Gazprom to divert gas supplies to Europe that currently flow through Poland, robbing Warsaw of billions of dollars
in transit revenues. The project would also increase Europe’s dependence on Gazprom for gas, UOKiK argues.
“Such a situation may bring about serious consequences for the economy of Poland and of the EU, in particular by introducing territorial restrictions affecting the delivery of natural gas, and by increasing the prices of gas to end customers, in particular to Polish consumers,” the regulator said. “The high cost of implementing the undertaking may be offset by higher bills paid by Polish recipients of gas, and the negotiating posi- tion of ... Gazprom will be strengthened
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Poland's anti-competition authority and Russia's Gazprom could be stuck in arbitration for years.
What: Polish regulator UOKiK has slapped a $7.6bn fine on Gazprom for going ahead with Nord Stream 2 without its permission.
Why: Poland, a staunch opponent of Nord Stream 2, says the pipeline will have a negative effect on its gas market.
What next: Gazprom has vowed to appeal against the decision, making a lengthy arbitration case likely. But the dispute will have little bearing on Nord Stream 2's completion.
Poland and Russia look set for a lengthy and arduous legal dispute, after Polish antimonopoly watchdog UOKiK last week slapped Kremlin-run gas supplier Gazprom with a $7.6bn fine for going ahead with the Nord Stream 2 pipeline without its consent.
Poland’s efforts will have little bearing on the controversial project, however,
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given that UOKiK lacks jurisdiction
to halt its construction, which is now almost complete. And in any case, Gazprom has vowed to appeal against the regulator’s decision, initiating an arbitration process that could take five or so years to reach a conclusion.
The crux of UOKiK’s argument is that Gazprom created a de-facto joint venture
“Poland and Russia look set for a lengthy and arduous legal dispute, after Polish antimonopoly watchdog UOKiK slapped Russia’s Gazprom with a $7.6bn fine”
with its European partners to finance Nord Stream 2. Gazprom’s original plan was to form a consortium with Germany's Uniper and Wintershall Dea, Royal Dutch Shell, Austria's OMV and France's Engie to finance, build and operate the €9.5bn ($11.2bn) pipeline. UOKiK’s approval was needed because of Nord Stream 2’s impact on the Polish gas market. It withheld
considerably both in relations with Poland and with other EU member states.”
Questionable impact
How great an impact Nord Stream 2 would have on the Polish market is doubtful, however, given that Warsaw is striving to end its reliance on Russian gas anyway within a few years.