Brussels, 19/06/2015 (Agence Europe) - On Friday 19 June, the EU rejected Russia's first request for WTO arbitration to rule on the Russian complaint against the rules of the EU's third legislative package for the liberalisation of the internal energy market (DS 476).
Adopted in 2009, the third energy package sets out common rules at EU level to regulate the production, transport and distribution of natural gas and electricity.
Russia believes that the third energy package - like the EU's gas policy and energy policy - unjustifiably restricts imports of natural gas originating in Russia and discriminates against Russian natural gas pipeline transport services and service suppliers. Russia also believes that its natural gas is not given the same treatment as that given to natural gas originating in third countries.
In its appeal, Russia says that the measures of the third package are “incompatible” with the EU's WTO obligations and commitments, and are “in breach” of these same obligations and commitments. The inconsistencies that Russia alleges refer to the general agreement on trade in services (GATS), to the agreement on subsidies and compensatory measures, and to the agreement establishing the WTO (see EUROPE 11071 and 11074).
The EU told the WTO's dispute settlement body (DSB) on Friday that it was confident that its third energy package was fully compatible with its WTO obligations. The EU also thought that Russia's DSB request enlarged the scope of the dispute brought to the WTO at the request for consultations introduced on 30 April 2014.
The DSB has agreed to return to this affair. Under WTO rules, a member cannot oppose another member's second request to set up a dispute settlement panel. The EU will not therefore be able to oppose a second request from Russia for WTO arbitration.
Since adoption of the EU's third energy package in 2009, Russia has refused to fall into line with its requirements on unbundling. The requirements would mean that Russian gas company Gazprom would need to modify the structure of its assets in Europe.
The dispute worsened in September 2012 with the European Commission's launch - following a complaint from Lithuania - of an investigation targeting Gazprom for abuse of dominant position and price manipulation in several Central and Eastern European countries that are very dependent on Russian gas supplies. The Commission sent its objections to Gazprom on 22 April in this affair (see EUROPE 11300). (Emmanuel Hagry)