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Russia loses bulk of WTO challenge to EU gas pipeline rules

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GENEVA: Russia largely failed in its bid to overturn the European Union’s gas market rules in a World Trade Organization ruling published on Friday.


Russia launched the dispute in 2014, claiming that the EU’s “Third Energy Package” and the EU’s energy policy overall unfairly restricted and discriminated against Russia’s gas export monopoly Gazprom.


Russia argued that the EU broke WTO rules by requiring the “unbundling” of gas transmission assets and production and supply assets, which effectively stopped Gazprom — long the major supplier of gas to Europe — from owning the pipelines through which it sent gas to the European market.


Russia said the EU had unfairly discriminated in favour of liquefied natural gas and upstream pipeline operators by exempting them from those unbundling requirements.


The panel of three WTO adjudicators ruled against Russia on those points.


However, they upheld Russia’s complaint about an unbundling exemption for Germany’s OPAL pipeline, granted on condition that Gazprom supplied no more than 50 per cent of the gas in the pipeline.


The 50 per cent cap could only be exceeded if 3 billion cubic metres of gas was released annually at a fixed price to competing suppliers on the Czech market.


The WTO panel also agreed that Croatia, Hungary and Lithuania had discriminated against Russia by requiring a security of energy supply assessment for foreign, but not domestic, pipeline operators.


The European Commission called the ruling an important positive outcome that secured the core elements of the Third Energy Package, a 2009 reform that sought to integrate the EU’s energy market while increasing competition.


— Reuters


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