Polish Regulator Imposes $57mn Penalty on Gazprom Over Nord Stream 2 Probe

Poland’s Office of Competition and Consumer Protection (UOKiK) has imposed a penalty of around $57 mln on Russia’s top gas producer Gazprom for failure to cooperate in the investigation conducted in relation to construction of Nord Stream 2 gas pipeline, the regulator said in a statement on Monday, TASS reported.

“President of UOKiK Tomasz Chrostny has imposed a penalty of almost 213 mln zloty (around $57 mln) on Gazprom for failure to cooperate in the investigation conducted in relation to the construction of Nord Stream 2 gas pipeline,” the statement runs. Such an obligation is fixed in the European legislation, on which the Polish Act on Competition and Consumer Protection is based, UOKiK noted.

“The penalty imposed on Gazprom is related to the proceedings conducted with regard to the creation of a consortium financing the construction of Nord Stream 2 gas pipeline without a required consent of the President of UOKIK. The Authority has made allegations in this case against six companies: Gazprom from Russia, Engie Energy from Switzerland and four companies from the Netherlands: Uniper, OMV, Shell and Wintershall. In the course of the proceedings, the Authority requested documents that are of significance to the case from Gazprom as well, however, the company refused to provide information that is important to the pending proceedings,” the regulator said.

“Based on the existing provisions, at the beginning of the year, we requested Gazprom to provide us with contracts concluded by its subsidiary with other companies financing the construction of Nord Stream 2. Despite its legal obligation to cooperate with the Authority, the company failed to provide such information, even after the proceedings in relation to failure to cooperate, which should have been a warning for the company, were initiated in May,” according to the statement.

“Violation of the laws of Poland, a member-state of the European Union, will result in financial sanctions provided for in such laws. To my mind, it is an intentional act, the aim of which was to obstruct the ongoing proceedings. Therefore, I have decided to impose a penalty of almost 213 mln zloty on Gazprom. It is a maximum sanction provided for by law for failure to provide information requested by the Authority,” President of UOKiK Tomasz Chrostny was quoted as saying.

The Office of Competition and Consumer Protection initiated earlier an investigation against Gazprom and its five Nord Stream 2 partners – OMV, Wintershall, Shell, Uniper and Engie, following which it brought charges of violating Poland’s antitrust legislation due to the project’s financing against the Russian gas giant. The regulator suggests that Gazprom without preliminary approval entered into a financial transaction with those companies, which could lead to the restriction of competition.

The Nord Stream 2 pipeline is set to run from the Russian coast along the Baltic Sea bed to the German shore through the exclusive economic zones and territorial waters of five countries – Russia, Finland, Sweden, Denmark, and Germany, thus bypassing transit countries of Ukraine, Belarus, Poland and other Eastern European and Baltic states. Each of the pipeline’s two stretches will have a capacity of 27.5 bln cubic meters. Gazprom’s European partners in the project are Germany’s Wintershall and Uniper, Austria’s OMV, France’s Engie and the British-Dutch Shell.

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