Case

On 27 July 2018, the Energy Community Secretariat sent an Opening Letter to the Republic of Serbia in accordance with the Rules of Procedure for Dispute Settlement. The Secretariat, takes the preliminary view that excluding interconnection point Horgoš from allocation of capacity is not compliant with the Energy Community acquis communautiare related to ensuring non-discriminatory third party access. The Republic of Serbia has been given the possibility until 8 October 2018 to comply of its own accord with the requirements of the Treaty, or to justify its position.
 

Reasoning

The Republic of Serbia is under an obligation to ensure unrestricted third party access regime and to apply open capacity-allocation procedure on a non-discriminatory basis.

The view that the Secretariat takes in the Opening Letter is that due to unjustified exclusion of the Horgoš entry point, i.e. a single cross-border entry point to the natural gas transmission system of the Republic of Serbia, from unrestricted third party access regime and from open capacity-allocation procedure as well as due to the failure to address discriminatory and anticompetitive market conduct of Srbijagas as regards allocation of cross-border transmission capacities, the Republic of Serbia is in breach of Article 32 of Directive 2009/73/EC and Article 16 of Regulation (EC) 715/2009 and, therefore, failed to fulfil its obligations under Articles 6, 10 and 11 of the Treaty.
 

Procedure

Given the importance of cross-border capacity allocation for the establishment of an internal natural gas market as pursued by the Energy Community Treaty, the Secretariat decided to initiate the present proceedings under Article 90 of the Treaty upon a complaint. The purpose of this initial step in the procedure is to give the Republic of Serbia the possibility to react to the allegation of non-compliance with Energy Community law, and enabling the Secretariat to establish the full factual and legal background of the case.

According to Articles 7 and 17 of the Rules of Procedure for Dispute Settlement, interested parties may be granted access to the case file and may submit written observations on the present case to the Secretariat during the preliminary procedure.

Steps taken

On 19 April 2019, the Secretariat sent a Reasoned Opinion to Serbia for failing to ensure third party access at Horgoš interconnection point between Serbia and Hungary to follow up on its Opening Letter of 27 July 2018.

Having taken into account the Government’s reply to the Opening Letter, the Secretariat maintains its findings therein. In the Reasoned Opinion, it reiterates its view that Serbia infringes its obligation to ensure non-discriminatory third party access to the natural gas transmission system.

Reasoning

Contrary to Serbia’s assertions, the Secretariat does not consider that restricted access to the Horgoš entry point was justified in accordance with Article 35(1) of Directive 2009/73/EC. Srbijagas’ exclusion of respective system entry point from objective and transparent capacity-allocation procedure does not satisfy any of the criteria for refusal of access stipulated in the Directive and the Energy Law.

Procedure

Serbia is requested to rectify the non-compliance with Energy Community law identified in the Reasoned Opinion within a time-limit of two months. Depending on the reply from Serbia, the Secretariat may submit the case to the Ministry Council for a decision on the non-compliance of Serbia with Energy Community law.

On 12 July 2019, the Secretariat submitted a Reasoned Request to the Ministerial Council in Case ECS-13/17, following the failure of the Republic of Serbia to rectify the breaches identified by the Secretariat.

Steps taken

After having considered the opinion of the Advisory Committee, which upheld the Reasoned Request, the 18th Ministerial council took a decision by written procedure regarding the failure of Serbia to comply with its obligations under the treaty. The Ministerial Council declared the existence of a breach by Serbia of Article 32 of Directive 2009/73/EC and Article 16 of Regulation (EC) 715/2009 and therefore of Articles 6, 10 and 11 of the Treaty.

In Article 1 of the Decision, the failure is described in detail. Article 2 of the Decision stipulates that Serbia shall take all appropriate measures to rectify the breach identified and ensure compliance with Energy Community law immediately.

Procedure

Serbia is asked to report regularly to the Secretariat and the Permanent High Level Group about the measures taken in 2021. The ministers invited the Secretariat to initiate the procedure under Article 92 of the Treaty if the breach is not rectified by 1 July 2021.