Oil Stocks Stand-Off: European Commission is taking Romania to Court

The European Commission announced last thursday (25 January 2018) that it is initiating an infringement procedure against Romania in front of the Court of Justice. The Commission alleges that Romania failed to correctly implement and apply the Oil Stocks Directive (Council Directive 2009/119/EU). The current Romanian legislation prohibits the use of oil stocks as collaterals, i.e. assets offered to secure a loan. This prohibition could make it more difficult for economic operators to fulfil their obligation to hold stocks. According to the Commission, Romania has also incorrectly implemented the rules concerning the right of economic operators to delegate their obligation to hold stocks and the establishment of emergency procedures in the event of a major supply disruption. Romania says it already amended its laws, but needs more time.

The action is the latest in a long-standing dispute over oil stocks in Romania. On 20 November 2015, the Commission reminded Romania of its obligations under the Oil Stocks Directive, including the obligation to have emergency procedures and an emergency plan in the event of a major supply disruption, but also the obligation to provide a clear and effective framework for operators to be able to delegate their storage obligations. Since Romania did not address these concerns, the Commission on 18 November 2016 issued a formal request to Romania to comply with all aspects of the Oil Stocks Directive. The Commission feels that Romania did not comply with this formal request and is now taking action in front of the Court of Justice.

The EU rules on oil stocks impose an obligation on Member States to maintain minimum stocks of crude oil and/or petroleum products, which must be available at all times, and, therefore, gives security of supply of petroleum resources to the EU. Member States must have in place appropriate emergency procedures and contingency plans in order to deal with a major supply disruption, should it occur. Furthermore, Member States may impose obligations to hold oil and/or petroleum product stocks on companies within certain boundaries; for instance, companies on which such obligations are imposed must be able to delegate them across the EU subject to certain conditions and limitations. The Oil Stocks Directive was to be transposed by 31 December 2012. More information on the Commission`s action can be found here.

The Romanian Ministry of Energy, according to Romanian news reports,  reacted by explaining that the law transposing the Oil Stocks Directive was approved by the Government in May last year and is currently in the parliamentary procedure. `As soon as Parliament approves this law, we will inform the European Commission that we have completed transposition of the directive`, officials of the Ministry of Energy said. The Ministry expects that the infringement procedure will be dropped at that point.


Popular posts from this blog

Dutch Government Decides to Cease Gas Production From Groningen Gas Field - A Legal Perspective

Groundbreaking Climate Case: The Urgenda-Appeal Verdict (The Hague Court of Appeal Case No 200.178.245/01) Case Comment

Urgenda Foundation v The Netherlands (C/09/456689 / HA ZA 13-1396) - Case Comment