The Federal Network Agency explained that it was assuming the function of a shareholder in a fiduciary capacity for a transitional period and could thus ensure proper management. “We are aware of the responsibility for secure gas supply that this task entails,” explained President Klaus Müller. “Our goal will be to ensure that Gazprom Germania is managed in the interests of Germany and Europe. We want to take all necessary steps to further ensure security of supply. The business of Gazprom Germania and its subsidiaries is to be continued in this sense in a controlled manner.”
At the end of March, Gazprom Group had ended its stake in the German company Gazprom Germania GmbH and all its assets. Gazprom did not disclose the new ownership. Regulatory filings showed the transaction involved exiting Gazprom Export LLC, the owner of Gazprom Germania. In turn, a company called Joint Stock Company Palmary became shareholder of Gazprom Germania via Gazprom Export Business Services LLC. The new shareholders of Gazprom Germania proceeded to order the liquidation of the company. It is unclear from the order who is economically and legally behind these companies. The name suggests that it belongs to the Gazprom Group.
According to the Ministry, the change of shareholders is invalid because it was not notified to and approved by it. Companies in the critical infrastructure sector, such as Gazprom in the field of natural gas supply, are obliged to notify the Ministry of transactions involving investors from non-EU states in accordance with §§ 55 et seq. of the German Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung – AWV). Acquisitions of companies in the critical infrastructure sector are then subject to mandatory foreign investment control (FDI) and must be cleared prior to closing. The Ministry is now carrying out the corresponding FDI procedure and has appointed the Federal Network Agency as a trustee on a transitional basis. This shall ensure that “no fait accompli contrary to the law” is created.
To achieve this, the Ministry has issued a legal order on the basis of § 6 of the German Foreign Trade and Payments Act (Außenwirtschaftsgesetz – AWG). The provision allows for the restriction of foreign trade by means of an administrative act in case of a threat to national security or public order. The individual intervention can be used to react to an acute threat at short notice, sometimes within a few hours. It was only amended in late 2019 and was originally tailored to enable temporary national sanctions listings that can be implemented as quickly as possible on the basis of corresponding UN Security Council resolutions: The German legislator reacted with the amendment to the law as the Financial Action Task Force (FATF) demanded immediate implementation of UN financial sanctions in the areas of terrorism and counterproliferation. The provision serves in particular to close sanctions gaps according to Article 347 alt. 3 TFEU until corresponding UN sanctions are adopted by the EU. It was also used for temporary national export restrictions on medical protective equipment in the wake of the COVID-19 pandemic before the EU was able to enact its own measures.
Gazprom Germania owns other companies in the German gas industry. These include the gas trader Wingas, the gas storage operator Astora and a minority stake in the gas transport company Gascade. Among other activities, Gazprom is operating the largest natural gas storage in Western Europe via its German subsidiaries.
Authored by Falk Schoening and Stefan Kirwitzke.