Federal Ministry for Economic Affairs and Climate Action appoints Bundesnetzagentur as fiduciary for Gazprom Germania – Acquisition of Gazprom Germania GmbH by JSC Palmary provisionally invalid

The Federal Ministry for Economic Affairs and Climate Action (BMWK) has temporarily appointed the Bundesnetzagentur as fiduciary for the Gazprom Germania Group. The corresponding order will be published today in the Federal Gazette. The decision comes against a background of unclear legal relationships and follows the violation of the reporting obligation under the Foreign Trade and Payments Ordinance. Gazprom Germania GmbH operates critical infrastructure in Germany and is therefore of outstanding importance for the gas supply.

Federal Minister Robert Habeck said: “The order of fiduciary management serves to protect public security and order and to maintain the security of supply. This step is imperative. At present, the security of supply is ensured.”

The fiduciary management by the Bundesnetzagentur has been ordered until 30 September 2022 on the basis of the Foreign Trade and Payments Act. This concerns all voting rights deriving from shares in Gazprom Germania GmbH. The exercise of the voting rights of the shareholders of Gazprom Germania GmbH is not permitted. The voting rights deriving from such shares have thus now been transferred to the Bundesnetzagentur. In particular, the Bundesnetzagentur is authorised to remove members of the management and appoint new members and to issue instructions to the management. The right to manage and dispose of the assets of Gazprom Germania GmbH is restricted and is made subject to the approval of the Bundesnetzagentur.

The Federal Ministry for Economic Affairs and Climate Action was informed of the indirect acquisition of Gazprom Germania GmbH by JSC Palmary (Russia) and Gazprom export business services LLC (GPEBS, Russia). As Gazprom Germania GmbH operates critical infrastructure, any acquisition by a non-EU investor must be approved by the Ministry. It is not clear who is behind JSC Palmary (Russia) and Gazprom export business services LLC (GPEBS, Russia) in commercial and legal terms. In addition, the acquiring party has ordered the liquidation of Gazprom Germania, which, as long as the acquisition is not approved, is not in conformity with the law.

The Federal Ministry for Economic Affairs and Climate Action has not granted permission for the acquisition. Thus, any legal act connected with this and also the acquisition as such is provisionally invalid (Section 15(3) Foreign Trade and Payments Act). Palmary is thus not the new indirect owner of Gazprom Germania GbmH. The Federal Ministry for Economic Affairs and Climate Action is conducting an investment assessment procedure and has appointed the Bundesnetzagentur as fiduciary for a transitional period. This ensures that the right to undertake an assessment can be exercised effectively and that no fait accompli contrary to the law is created.

Federal Minister Robert Habeck said: “The Federal Government is doing what is necessary to uphold security of supply in Germany. This also includes not exposing energy infrastructures in Germany to arbitrary decisions by the Kremlin. The proper conduct of business in Germany must be ensured. This is also important for the supply to work in European partner countries. The unclear legal situation, violations of the reporting obligation and the announcement of the liquidation of Gazprom Germania are now forcing the Federal Government to take this step. We have not given permission for the acquisition. Instead, the Bundesnetzagentur, as a fiduciary, has assumed the function of a shareholder. It can take all necessary measures to further ensure security of supply.”

Gazprom Germania previously acted as a holding company for Gazprom's activities in Germany and other European countries, including in particular the operation of critical infrastructure. This includes energy trading as well as gas transport and the operation of gas storage facilities. The appointment of a fiduciary is therefore necessary to continue the business activities and thus ensure security of supply. The Bundesnetzagentur publishes a daily report on the security of supply situation.

The order has been published in the Federal Gazette. An English translation of the order can be viewed here.