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Russia sues EU over Third Energy Package

Russia has filed a lawsuit with the World Trade Organisation (WTO) against the European Union over the Third Energy Package, a Russian source close to the case told ITAR-TASS on Wednesday, April 30.

"This procedure is provided for in the rules of the Organisation," the source said, adding that "Russia sent a note to the EU Mission at the WTO and notified the WTO Secretariat thereof".

The Russian Ministry of Economic Development said earlier it was planning to file such a lawsuit before the end of the first quarter of 2014. In late 2013, Russia filed a lawsuit against the EU over energy adjustments.

Russia's complaints about the Third Energy Package also remain in force. "We do not remove this issue from the agenda. It's number two on the list. As regards the Third Energy Package, we are planning to start an investigation within the WTO framework in the first quarter of 2014," Deputy Minister of Economic Development Alexei Likhachev said in December.

Russian Prime Minister Dmitry Medvedev earlier disagreed with Europe's position on the Third Energy Package as it calls for a revision of existing agreements.

"As for antimonopoly structures, we are not against different procedures if they occur by law, but we think the position on the Third Energy Package is wrong," Medvedev said.

"Even if it pursues positive goals, it has a significant impact on existing ties and means a rejection of current agreements," Medvedev said, adding that Russia thinks thought it was a violation.

President Vladimir Putin said he was hopeful that a compromise on the EU Third Energy Package could be reached.

"I do hope very much that we will be able to find a solution to these complex problems and questions through dialogue of partners," he said.

At the same time, he said it would be unacceptable if the provisions of "the Third Energy Package" were applied retroactively to affect current contracts between Gazprom and consumers.

"All kinds of unilateral decisions are made - 'the Third Energy Package,' and it gets applied retroactively in an absolutely unprecedented way, which would seem unacceptable in the modern civilised world, and yet this happens," he said.

According to Putin, the Third Energy Package can cause damage.

However European Commission's Directorate-General for Energy said that it was designed to ensure a higher degree of competition in the market as EU countries must not depend on any one source of energy supplies.

It confirmed that the EU had no problems with Russian companies if they played by European rules and said that Russia should ratify the Energy Charter in order to reduce risks related to trade and investments in the energy sector.

"The sides are expected to reiterate their intention to develop mutually advantageous energy cooperation for creating an integrated energy complex in Europe, while pressing for strict compliance with existing bilateral and multilateral contractual obligations," Russian presidential aide Yuri Ushakov said.

According to the European Commission, the Third Energy Package should promote competition in the EU energy market and push energy prices down in Europe.

One of its most controversial provisions demands that all energy transit infrastructure be handed over to autonomous operators independent from energy generating and mineral producing companies.

Russian Permanent Representative to the European Union Vladimir Chizhov said that the enforcement of this provision has "basically led to nationalisation of pipelines in some East European countries."

As for the WTO, European Commissioner for Trade Karel De Gucht earlier accused Russia of failure to fulfill its obligations within the WTO. Among trade problems between Russia and the EU, he named specifically increased duties on imported motor vehicles and a ban on the import to Russia of certain kinds of cattle from EU countries that do not meet Russia's overstated veterinary requirements.

The European Union's Third Energy Package is a legislative package for an internal gas and electricity market in the European Union. Its purpose is to further open up the gas and electricity markets in the European Union. The package was proposed by the European Commission in September 2007, and adopted by the European Parliament and the Council of the European Union in July 2009. It entered into force on September 3, 2009.

Core elements of the third package include ownership unbundling, which stipulates the separation of companies' generation and sale operations from their transmission networks, and the establishment of a National Regulatory Authority (NRA) for each member state, and the Agency for the Cooperation of Energy Regulators which provides a forum for NRAs to work together.

[Source: Itar Tass, Geneva, 30Apr14]

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