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EU Goes After Gazprom, Bailout Looms Amid Slovenian Political Row

Plus, Russia charges Greenpeace activists with piracy, and Serbia threatens to quit Kosovo talks. by S. Adam Cardais and Alexander Silady 4 October 2013

1. Brussels preparing Gazprom antitrust charges

 

The European Union is preparing to charge Gazprom for unfair practices in Central and Eastern Europe in a case that could cost the gas giant up to $15 billion in fines, Reuters reports.

 

Joaquin AlmuniaJoaquin Almunia
Speaking in Vilnius 3 October, EU Competition Commissioner Joaquin Almunia said regulators are drafting a charge sheet against the Russian company for abusing its dominant position in eight EU countries: Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, and Slovakia. The comments follow a lengthy investigation and a series of raids in Gazprom offices in the region.

 

Almunia didn't offer a time line, but an informed source told Reuters the charges could come by year's end. Lithuanian President Dalia Grybauskaite said the investigation was "anticipated to end in spring 2014," according to Radio Free Europe. Gazprom declined to comment on the case.

 

In September 2012, the European Commission began investigating Gazprom for alleged anti-competitive practices in Central and Eastern Europe, where Russia controls the Soviet-era pipelines. Among other allegations, Brussels says Gazprom exploits its pipeline monopoly in neighbors like Lithuania, which pays much more for gas imports than Western European customers despite being right next door.

 

For Gazprom, the stakes are extraordinarily high because if the EU case is successful, the company would have to lower prices, undercutting profits, analysts says. Russian President Vladimir Putin insists Gazprom is outside the EU's jurisdiction, but Brussels says the company is fair game because it operates within the bloc.

 

2. Slovenian government, economy on the brink in ruling party fracas

 

Slovenia's efforts to avoid an international bailout took a hit this week when a dispute over leadership of the ruling party threatened to topple the government, Reuters reports.

 

Zoran JankovicZoran Jankovic
The fracas centers around Ljubljana Mayor Zoran Jankovic, who on 2 October announced plans to again seek leadership of the ruling Positive Slovenia party after resigning in February. Analysts say Jankovic would probably defeat his successor, current Prime Minister Alenka Bratusek, triggering a political crisis that would likely upend the four-party coalition.

 

That's partly because Bratusek says she will resign as prime minister if she loses the 19 October party vote. More importantly, the other coalition partners refuse to work with Jankovic, citing high-profile corruption allegations against him.

 

"We are not cooperating and will not cooperate with parties that are led by individuals who are burdened by corruption," Interior Minister Gregor Virant, leader of the third-largest coalition member, told a Slovenian daily cited by Reuters.

 

A government collapse would delay crisis measures designed to prevent an international bailout by shoring up Slovenia's ailing economy, currently saddled with billions of dollars in bad bank loans and recession. As a result, Slovenia might have no choice but to ask the EU and International Monetary Fund for help.

 

3. Environmental activists face 15 years in prison for Russian protest

 

Moscow has charged the entire 30-member crew of a Greenpeace ship with piracy for a protest in the Arctic in a decision the environmental group calls its worst crisis in over 20 years.

 

On 3 October, Russian prosecutors slapped 16 crew members with the charge, which carries a maximum 15-year prison sentence, RIA Novosti reports. The 14 other members were charged a day earlier, prompting an outcry from Greenpeace.

 

"This is now the most serious threat to Greenpeace's peaceful environmental activism since agents of the French secret service bombed the Rainbow Warrior" ship during a 1985 demonstration over France's nuclear testing in the Pacific, executive director Kumi Naidoo told Bloomberg.

 

On 19 September, Russian authorities detained the U.S. captain of the Greenpeace ship Arctic Sunrise, a Russian photographer, and 28 other crew members after storming and then seizing the ship. This came a day after two Greenpeace activists were detained after attempting to scale the offshore Prirazlomnaya oil rig to protest drilling in the environmentally sensitive Arctic.

 

The charges against the multinational crew come as something of a surprise. That's because President Vladimir Putin had said that while the protesters broke Russian law by coming too close to the rig, they had not committed piracy.

 

Greenpeace wants to draw attention to new offshore drilling in the Arctic by international energy majors that have partnered with Russian oil giant Rosneft to explore the hydrocarbon-rich area. The group insists that Prirazlomnaya, owned by Gazprom and already operational, is unsafe, and that its September protest was peaceful.

 

4. Serbia might quit Kosovo talks over election row

 

Ivica DacicIvica Dacic
Belgrade is threatening to walk away from EU-led talks to improve relations with Kosovo after Pristina placed a travel ban on Serbian officials during upcoming elections, Balkan Insight reports.

 

Serbian Prime Minister Ivica Dacic made the threat – albeit in oblique language – on 2 October, shortly after Kosovo Foreign Minister Enver Hodzaj said that "Not one Serbian official will be allowed in Kosovo" in the campaign season ahead of the 3 November local elections. Dacic suggested he should be able to travel to Kosovo to encourage the Serb minority to participate in the polls and complained to several Western embassies about the "irrational, unreasonable, and almost senseless" decision.

 

Echoing Dacic, Serbian President Tomislav Nikolic said Belgrade would "rethink its participation in the [EU-led] talks" if it cannot convince Pristina to lift the ban, B92 reports.

 

In March 2011, Brussels began an initiative aimed at improving relations between Serbia and Kosovo to put both on track to EU membership. After many setbacks, the talks yielded what some called a milestone agreement this April. It effectively granted the Kosovo Serb minority increased autonomy in exchange for Belgrade's recognition of Pristina's authority in majority-Serb areas.

 

The dialogue has continued in an effort to implement that agreement while also hammering out technical problems over issues like telecommunications. On 7 October, Dacic and Kosovo counterpart Hashim Thaci will meet with EU foreign policy chief Catherine Ashton in Brussels, where the November polls will be a priority agenda item, according to Balkan Insight.

 

5. Uzbekistan scandal sees out another TeliaSonera executive

 

A top executive at a Swedish telecommunications firm linked to a corruption scandal in Uzbekistan has lost his job, Telecoms.com reports.

 

Tero Kivisaari, TeliaSonera's president of business area mobility services, was asked to leave because his role in the company’s Uzbekistan investments “made it impossible for him to act with the internal and external authority necessary," president and chief executive Johan Dennelind said.

 

The burgeoning scandal over the company’s dealings in Uzbekistan led to the resignation of Dennelind’s predecessor, Lars Nyberg, in February. The governments of Sweden, Finland, and Norway are part stakeholders in TeliaSonera.

 

In November, the BBC reported on Swedish and Swiss investigations into claims that TeliaSonera had paid $300 million in order to secure a contract to provide 3G data services in Uzbekistan.

 

TeliaSonera had been doing business in Uzbekistan through a middleman company called Takilant allegedly linked to Uzbekistani President Islam Karimov’s eldest daughter, Gulnara. TeliaSonera said Takilant had handled the $300 million payment for the operating license, but the amount did not appear anywhere in the latter company's books, journalists with Swedish public television claimed.

 

In an interview with RFE in February, a member of the law firm TeliaSonera asked to look into the allegations said its probe could not confirm that bribery or money laundering took place, but pointed out TeliaSonera's apparent lack of due diligence.

 

S. Adam Cardais is a TOL contributing editor. Alexander Silady is a TOL editorial intern.

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