Italy, Russia working on payment system to bypass Russian sanctions

By Al Mayadeen English
Source: Agencies
15 Jul 2023 13:10

The new system allows the Russian buyer to pay the Italians in rubles, who then transfer the money to Italy from a [bank] account in a third country.

A seagull stands in front of an Italian flag flying at half-mast on the Altare della Patri-Vittorio Emanuele II monument in Rome, Tuesday, March 31, 2020. (AFP)

The President of the Italian-Russian Chamber of Commerce (IRCC), Ferdinando Pelazzo, told Sputnik on Saturday that the Chamber is working on creating a payment system that will allow Italian companies to sell their goods to Russian customers.

Pelazzo specified that the kinds of goods that will be sold to Russians are the ones that are not prohibited from being imported by sanctions.

"We want to create a system that will allow the Russian buyer to pay us in rubles, and we could then transfer this money to Italy from our [bank] account in a third country," Pelazzo said, noting that trade between the two countries experiences several challenges, including in the sale of goods that are not even subject to sanctions, nearly half of Italy's exports.

"Fifty-one percent of exports from Italy to Russia are under sanctions. But there are also 49% of non-prohibited goods: wine, shoes, fashion items," he added, stressing that several Italian firms are wanting to stay in the Russian market.

But if the situation continues to remain as such, he warned, it is most likely that they will eventually leave.

"It seems to me that now even those who have not left [the Russian market] are thinking whether to stay or leave. Nobody thinks to come to Russia. There are certain sectors that do not require investment, for example, fashion, they may be interested in staying," he said.

Impossible to decouple from Russian gas

On another note, the official raised that it is impossible for Italy to completely abandon Russian gas and that it would be far more profitable for Europe and Russia to return to the way things were.

"Russia continues to sell gas to Italy, although not in the same way as before. Russia is a fairly powerful gas exporter, so it is impossible to completely abandon Russian supplies," Pelazzo said.

"Blocks [sanctions] are temporary. They may change. It will be more profitable for Europe and Russia to return to cooperation," he added.

And as part of the ongoing gas and oil crisis Europe is going through due to the sanctions imposed on Russia in this regard, Italy's ENI confirmed last Tuesday the delivery of 3.1 billion cubic feet of liquified natural gas (LNG) from Algeria to the SNAM regasification terminal in Piombino, Italy.

The gas cargo was produced at the Sonatrach liquefaction plant in Betihoua, Algeria, according to ENI's statement.

ENI expects contracted volumes as it targets growth and expansion in its LNG sector to surpass 18 million tonnes in 2026, which is more than double the amount in 2022.

This was the first LNG delivery from Algeria to Italy, marking a significant tie-building strategy and a boost for the world gas economy, as European nations seek alternatives to Russian energy sources they themselves brought to a halt due to packages of sanctions targeting the country.