WTO says Russia seeks talks on EU energy regulations

GENEVA Thu May 1, 2014 1:10pm EDT

The World Trade Organization WTO logo is reflected in water on a sidewalk at the entrance of the WTO headquarters in Geneva April 9, 2013. REUTERS/Ruben Sprich

The World Trade Organization WTO logo is reflected in water on a sidewalk at the entrance of the WTO headquarters in Geneva April 9, 2013.

Credit: Reuters/Ruben Sprich

GENEVA (Reuters) - Russia has requested talks with the European Union on the EU's energy rules that challenge Gazprom's business model, in a possible first step towards filing a dispute at the World Trade Organization, WTO officials said on Thursday.

The EU introduced the legislative package in 2009 with the aim of opening up gas and electricity markets, but Russia has objected strongly to it even before the current crisis in its ties with the European Union.

The legislation is an obstacle, for instance, to the giant South Stream pipeline, which Russia is seeking to build to bypass gas transit nation Ukraine. The Commission says the project does not comply with its laws.

Russia's request to the WTO on Wednesday concerns several aspects, including a requirement on granting access to natural gas and electricity networks, which forces Russian firms, such as Gazprom to sell stakes and cede market share.

It also pertains to EU measures on the production, supply and transmission of natural gas and electricity and alleged discriminatory requirements for certificating third countries.

John Clancy, European Commission spokesman for trade, said the European Union's laws were sound.

"The EU is confident that the energy regulation, now challenged by Russia, is fully compatible with WTO rules and is ready to explain this in consultations with Russia," he said.

The Russian Federation said the EU measures were inconsistent with WTO agreements on services, as well as on subsidies and countervailing measures, WTO officials said.

WTO members have 30 days to begin talks to try to resolve a dispute. If these fail, after 60 days a country may ask the WTO's Dispute Settlement Body to establish a dispute panel.

The EU and United States have imposed visa bans and asset freezes on some Russians in protest at Moscow's annexation of Ukraine's Crimea region.

Russia joined the WTO less than two years ago and has become embroiled in trade disputes with the EU and Japan.

(Reporting by Stephanie Nebehay; additional reporting by Barbara Lewis in Brussels; editing by Jason Neely and William Hardy)

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