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19:14 PM Monday, December 11, 2017
Energy
Kyiv Court: Russia’s Gazprom Must Pay $6.5B in Fines
The AMCU's investigation of Gazprom has led to a $6.5 Billion fine from the Commercial Court of Kyiv
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KYIV -- Russia's natural gas giant Gazprom must pay about $6.5 billion in fines for violating Ukraine's antitrust law, the Commercial Court of Kyiv ruled Monday.

Gazprom fell under the investigation of the Antimonopoly Committee of Ukraine, or AMCU , in 2015, as requested by then-prime minister Arseniy Yatsenyuk.

The AMCU found Gazprom to be engaged in monopolistic activities in transferring gas through Ukraine and requested to meet with company representatives. Gazprom appealed the decision to the Kyiv Commercial Court in April, but the appeal was rejected.

The AMCU then asked the court to enforce the fines leveled earlier, as Gazprom failed to pay them. On Monday, the court granted that decision, though it did not clarify how it plans to collect the money.

"The court granted the committee's demands in full," read an AMCU transcript of the court decision.

The amount includes the nearly original fines, with the rest being penalties for failing to pay the fine on time, according to the AMCU statement.

Gazprom could not immediately be reached for comment. In January, Gazprom said in a statement that the AMCU decision "can't be regarded as anything but an attempt to put pressure on Gazprom" since "Gazprom does not conduct any business in the territory of Ukraine and transfers gas to Naftogaz Ukraine on the western border of the Russian Federation."

Ukraine and Russia have had gas standoffs for over a decade. Russia used to its state-owned gas company for geopolitical leverage. This led Ukraine to cut its reliance on Russian gas and diversify its sources. Ukraine stopped gas purchases from Russia in November.

However, Ukraine still purchases Russian gas from European countries gas, notably neighboring Slovakia. The European Bank of Reconstruction and Development finances some of these purchases.

Ukraine has a goal of reaching energy independence by 2020. This will require increasing gas production, according to Prime Minister Volodymyr Groysman. UkrGazVydobuvannya chairman Oleg Prokhorenko said that equipment overhauls and capital expenditures needed to make this happen will require investments of $4 billion from the Ukrainian government and foreign investors before 2020.

For comments and news tips, please email UBJ Kyiv Correspondent Igor Kossov at igor.kossov@theubj.com

Photo: Gazprom’s signs burns bright in St. Petersburg, but the state company’s price power and political power are fading. (UNIAN)

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