Final discussions between the legal teams representing the Oil Industry of Serbia (NIS) and the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury will take place tonight, as the deadline for sanctions approaches, said Dušan Bajatović, the director of Srbijagas. He also mentioned that a final meeting with OFAC is scheduled for tomorrow.
On January 10, the United States imposed sanctions on NIS due to its majority Russian ownership, with the sanctions set to take effect on March 27. To prevent these sanctions, NIS, with the support of the governments of Serbia and Hungary, requested a three-month delay on February 4.
Bajatović stated that there are two possible legal processes to avoid sanctions for NIS—delisting and licensing.
He explained that delisting is unrealistic because, for NIS to be removed from the sanctions list, such a decision must go through the U.S. Congress.
The second option, according to the director of Srbijagas, is the licensing process.
“There are examples of this in Europe. Gazprombank was granted permission to continue certain activities to ensure the supply of gas, as oil is fully sanctioned in the EU. Rosneft is another example. They provide oil covering 12% of Germany’s market, and they still haven’t changed their ownership structure,” Bajatović explained.
The process involves OFAC asking questions, and NIS responding, the Srbijagas director added.
He emphasized that the idea of shutting down NIS, which he heard from some economists, is a bad one, as it goes against Serbia’s interests, noting that NIS is a guarantee for stability and security.
Bajatović mentioned that a potential issue could arise if NIS goes bankrupt, as this would create procedural and financial problems, but there is a possibility of continuing payments in dinars.
He also pointed out that Serbia has enough oil reserves for 90 days and that NIS is sure to have derivatives for the Serbian market until May.
“When you add that up, we have 180 days without direct consequences. There won’t be any shortages,” Bajatović concluded.
