It became known on Wednesday, October 7, that Poland's antimonopoly regulator UOKiK fined Russia's gas giant Gazprom an astronomical amount of $7.6 billion. Five European companies involved in the construction of the Nord Stream 2 gas pipeline were also fined. The fines that were imposed on them are a lot smaller and total $61 million.
What the Polish regulator wants
In addition, the regulator issued an order to terminate the contracts that were signed to finance the construction of Nord Stream 2 gas pipeline system.
"The financing of the joint venture, carried out by the participants of the gas market, rather than by financial institutions, testifies to the emergence of common economic interests between all these entities. Without the participation of these entities, Nord Stream 2 would not have been able to function and conduct a gas pipeline construction project within the European Union and, most likely, it would not have been created at all," UOKiK chairman Tomasz Chróstny said.
"None of the entrepreneurs has notified the Polish Antimonopoly Office about these actions, thereby disregarding Poland's effective laws, which are identical to the effective laws of the EU," he added.
According to the head of the Polish antimonopoly department, the high cost of the project will affect the cost of natural gas that would be supplied via the system. Consequently, it may affect Polish consumers too, even though Poland itself has nothing to do with the implementation of Nord Stream 2.
Gazprom said it would appeal the decision of UOKiK
Gazprom will certainly use its right to appeal the decision, since it did not violate the antimonopoly legislation of the Republic of Poland. When appealing against the decision of UOKiK, it is not subject to execution until the relevant court ruling comes into force," the company said in a statement.
European companies participating in the Nord Stream 2 project also expressed their disagreement with the decision of the Polish regulator.
However, Warsaw is confident that they have the capacity to collect fines from the above-mentioned companies.
"As in the case of the last fine against Gazprom (compensation worth 1.5 billion dollars in accordance with the decision made by the Stockholm Economic Court in favor of the Polish company PGNiG - ed.), which was a little smaller, but still it was a rather large amount, there were no problems with collecting it, because we have the tools to implement it," said Polish Deputy Foreign Minister Paweł Jabłoński.
Long-standing dispute and long-standing claims
Igor Yushkov, a leading analyst at the National Energy Security Fund, noted that the story began many years ago, when Gazprom was trying to create a joint venture with European companies to build the gas pipeline. The plan required permission from antitrust regulators in all countries where those companies operated, and permits were obtained from all of them, but Poland. In the end, the attempt to create a joint venture failed, the expert recalled.
"However, those five European companies gave Gazprom a loan for the construction of Nord Stream 2, which did not require any approvals," Igor Yushkov said.
Nevertheless, the Polish anti-monopoly authorities are not going to stop. At first, they fined French company Engie. When the French disputed the fine, the Poles realized that they had to go to court with some kind of argumentation, so they asked for papers from Gazprom. The latter responded that the Russian company had no obligation to provide documents, and the Polish regulator decided to fine Gazprom.
"Now the Poles have involved all participants into this judicial story, which is rather a stupid move to make, because all these cases will now be combined into one: the participants of Nord Stream 2 vs. the Polish antimonopoly authority," Igor Yushkov told Pravda.Ru.
In his opinion, the first instance, the Polish court, will side with the regulator.
"Then there will be a pan-European court and, of course, the participants will have chances to win, because they did not violate anything indeed: they had not created a joint venture. To build or not to build Nord Stream 2 is not a matter for Poland to resolve. The Poles have no authority to indicate what to build and where, because nothing passes in the Polish water area. In this regard, the participants of the Nord Stream-2 will most likely win the case," the expert believes.
The decision of the Polish regulator is not going to affect any financial results.
"The only thing that the Poles can do is to create a toxic image for the Russian project, so that other participants give up on it," Igor Yushkov believes.
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