Kiev allowed to arrest Gazprom's property: there is nothing but gas

The Economic Court of Kiev has ruled that the fine of UAH 171 billion levied by the Antimonopoly Committee of Ukraine upon Gazprom can be recovered not only in funds but in property as well, Pavlo Petrenko, Minister of Justice of Ukraine, posts in his Facebook account.

"It is a victory! The Economic Court of Kiev approved the petition of the Antimonopoly Committee and the Executive Service of the Ministry of Justice and changed the way of execution of the court decision to recover a fine of 171 billion UAH from Gazprom", the minister wrote. He elaborated: "If until now it was possible to recover only Gazprom’s funds in banks, now the levies apply to all of the debtor's property. In accordance with the procedures, this decision will be published in a few days."

To remind, in January 2016, the Antimonopoly Committee of Ukraine (AMCU) said the Russian holding was to pay a fine of about 86 billion UAH ($3.4 billion) for allegedly abusing the monopoly position in the natural gas transit market. Gazprom is Ukraine's only customer for the transit of gas.

Since Gazprom refused to pay, on December 5, 2016, the Kiev Economic Court decided to recover the fine and penalties for UAH 171.8 billion (about $6.7 billion). The Russian holding was unable to challenge the decision in the Ukrainian courts.

The statement made by the head of the Ministry of Justice of Ukraine seems strange, since back in May, Pavlo Petrenko told Ukrainian journalists that the department was actively looking for Gazprom’s assets and property. That is, one can suggest that the Ukrainian authorities had an opportunity to arrest the property earlier.

"Perhaps the judicial decision was nuanced. However, the minister's statement does not change the situation and is more like a PR action than any real victory. Speaking of property, Gazprom had next to nothing in the past, and has no property in Ukraine now. And the only thing that one managed to do is to seize UAH 80 million of Gazprom dividends in Gastransit and Gazprom sbyt accounts, says Dmitry Marunich, co-chairman of the Energy Strategy Fund. According to him, from the property of the Russian holding there is an administrative building in Kiev that can now be arrested. "But in terms of value it cannot be compared to a skyscraper in New York," said Marunich.

According to open sources, in Ukraine, Gazprom owns 40% of Gastransit. This joint-stock company was established in 1997 by Naftogaz of Ukraine, Gazprom and Turkish Turusgaz, Transbalkan to increase the capacity of the Ananiev-Tiraspol-Izmail export gas main pipeline, through which the gas is supplied to Romania, Bulgaria and Turkey. In 2001, they built Tarutino compressor station and three pipeline loopings.

Gazprom also has a 40% stake in OAO YuzhNIIGiprogaz in Ukraine, but it is located in Donetsk, and Gazprom sbyt Ukraine Ltd.

"I will assume that the Ministry of Justice is preparing to apply to European countries with a request to recover the property of Gazprom in their territory. It is doubtful that it will turn out, but in Kiev they can think: "Anything may happen!", the expert noted.

However, in Ukraine, Gazprom has big assets. This is a transit gas. However, experts are not inclined to assume that Kiev will dare to arrest it, since there may be a huge scandal, and the arrest of gas will hit, first of all, European consumers.

In May, Russian Energy Minister Alexander Novak said that the vice president of the European Commission on Energy Issues Maros Sefcovic had promised him that Ukraine would not implement the court decision on the AMCU fine. "Mr. Sefcovic wrote a letter to us saying he has guarantees from Ukraine that there will be no actions to collect the fine and impose restraint on the property. We are not satisfied, because these are not legal but verbal guarantees. It became clear when the Ukrainian court initiated enforcement proceedings on this matter," Novak said in an interview to RIA Novosti.