Putin expands gas payment methods after US sanctions on Russia’s Gazprombank

Kremlin leader Vladimir Putin. Stock photo: Getty Images

Kremlin leader Vladimir Putin has signed a decree allowing additional payment options for Russian gas, bypassing Gazprombank, which is sanctioned by the United States.

Source: a document on the Russian legal information portal on Thursday, 5 December

Details: Putin’s decree amends his 31 March 2022 order, stipulating that payments for Russian gas are no longer tied to Gazprombank until sanctions against it are lifted.

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In addition, the decree effectively allows payments for Russian gas to be made through mutual debt cancellation. Previously, Russia had insisted on payments in roubles to bypass restrictions on working with dollars and euros.

At the same time, there is a possibility that Western sanctions could extend to other banks through which some EU countries make payments for Russian gas.

Of the EU states, only Hungary and Slovakia continue to receive Russian pipeline gas, with Austria having been on this list until recently. Serbia is another European consumer of Russian gas.

Background: 

• On 21 November, the US Department of the Treasury blacklisted Gazprombank, the last major Russian bank not yet under sanctions.
• The Hungarian government subsequently submitted a request to US authorities for an exemption from the sanctions on Gazprombank to allow continued payments for Russian gas supplies through the bank.

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