Gazprom may face 10 bln euro fine in European Commission anti-dumping inquiry

The European Commission initiated the formal procedure to see whether the Russian gas supplier, Gazprom, was breaching European competition norms, particularly in Eastern and Central European countries - Poland, Latvia, Lithuania, Estonia, the Czech Republic, Slovakia, Bulgaria and Hungary.

It will scrutinize the situation in the countries that import from two-thirds to the whole of their gas from Gazprom. European norms stipulate a fine of up to 10% of the company annual turnover - more than 10 billion euros in the case of Gazrpom- for violations of the sort.

The European Commission will probe three main suspicions. First of all, Gazprom is suspected of abusing its dominant position on the gas markets of Central and East European countries with the division of markets and impediments to the free gas flow to Europe. Secondly, Gazprom is suspected of impeding diversification of energy supplies to the European Union. Thirdly, it is suspected of pushing high gas prices unfoundedly linked with crude prices on its clients.

The European Commission said it had informed Gazprom about the beginning of the anti-dumping inquiry. European norms do not set deadlines for such procedures.

At the same time, the European Commission said it did not mean to wage a trade war on Russia over gas delivery terms. This is a regular verification of a foreign company's compliance with European competition norms, a European Commission representative said. The European Commission will make a through and unbiased analysis. The start of the formal procedure does not mean the European Commission deems Gazprom guilty of the violations, he noted.

Yet the European Commission would have hardly started an inquiry into such a sensitive issue if it had not been sure of the validity of its suspicions.

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