Ukraine’s National Agency for the Prevention of Corruption (NAPC) has added Belgian independent gas system operator Fluxys to its list of international sponsors of war.
According to the NACP press service, the decision was made based on the company’s failure to comply with the UN Guiding Principles on Business and Human Rights and its continued promotion of the export of climate-damaging Russian liquefied natural gas (LNG), which provides financial resources for Russia’s invasion of Ukraine.
“Despite the ongoing full-scale Russian invasion, the Belgian independent gas infrastructure operator Fluxys continues to provide Yamal LNG, a subsidiary of Novatek, with LNG storage and transshipment services at its terminal in Zeebrugge. These services allow for the export of additional Russian revenues for Novatek and tax revenues for the Kremlin regime, which is committing countless war crimes in Ukraine. Thanks to the facts provided by Ukrainian and Belgian civil society organizations, we have found sufficient grounds to add Fluxys to the list of international sponsors of the war,” said Agiya Zagrebelska, Head of the Department for Minimizing Corruption Risks in the NACP’s Sanctions Policy.
The Belgian operator Fluxys provides liquefied natural gas storage and transshipment facilities to Yamal LNG, a joint venture majority owned by the Russian gas company Novatek, which is directly involved in financing military aggression and war crimes in Ukraine. A detailed analysis conducted by the International Institute for Energy Economics and Financial Analysis (IEEFA) in 2022 showed that Fluxys and its shareholders profited by facilitating the export of Russian LNG to the markets of Asia, South America and the Middle East, especially in the winter months of 2021/2022, which exacerbated the European energy crisis and increased profits for Novatek.
“The reputational risks associated with being listed as a sponsor of war and potentially having its credit rating downgraded are not unique to Fluxys. By continuing its involvement in Russian LNG transactions, Fluxys may face the risk of being subject to secondary sanctions from the United States, especially since Novatek is reportedly directly contributing to Russia’s war of aggression, as investigations suggest that the company’s security guards were used to form special military units that took part in the fighting in Ukraine,” said Svitlana Romanko, founder and director of Razom We Stand.
In response to the unprovoked and illegal aggressive war of aggression, many companies ceased all business interaction with Russian partners after February 24, 2022, but Fluxys continued to cooperate with Yaman LNG and Novatek throughout 2022 and into 2023. Experts estimate that Russia expects to receive up to €800 million in tax revenues from exports, which is possible due to the transshipment of LNG in Zeebrugge in 2023. Only 7% of this gas goes to EU markets. Fluxys receives 50 million euros a year for this service under a long-term contract signed in 2015, a year after Russia annexed Crimea and started the war in Donbas.
Novatek, owned by Russian oligarchs Leonid Mikhelson and Gennady Timchenko, is the main supplier of Russian liquefied natural gas to international markets. Mikhelson and Timchenko are members of Russian President Vladimir Putin’s inner circle and, with the help of his regime, have seized stakes in Russian oil and gas projects from international companies. “Novatek is the largest private natural gas producer in Russia. In July 2014, Novatek was added to the sanctions lists of the United States and Canada. In 2016, the US imposed sanctions on several Novatek subsidiaries. On November 2, 2023, the United States imposed sanctions against the Artsyl LNG 2 project, which was intended to double Novatek’s export capacity.
In October, Razom We Stand, on behalf of 23 Ukrainian NGOs, sent an open letter to the Belgian federal government calling on it to take the initiative to impose a complete ban on the transshipment of Russian LNG in all EU harbors, including the Fluxy-operated LNG terminal in Zeebrugge. The Netherlands and the United Kingdom have already introduced such bans.
The main shareholders of Fluxys are Belgian municipalities (77.41%) and the Belgian federal government (3.44%). Both parties have pledged to keep the global temperature rise below 1.5℃ by supporting the Covenant of Mayors and the Paris Agreement, respectively. They also claim to highly respect international humanitarian law, which prohibits intentional attacks on civilians or critical civilian infrastructure. These commitments contradict the actual continuation of cooperation with the Russian company Novotec.
The National Agency for the Prevention of Corruption (NAPC) has added two tobacco market leaders Philip Morris International and Japan Tobacco International to the list of international sponsors of war because of their continued operations in Russia, the agency said.
“The NACP has added two tobacco market leaders Philip Morris International and Japan Tobacco International to the list of international sponsors of war,” the NACP said in a statement on its Telegram channel on Thursday.
According to the financial statements of Philip Morris’ Russian subsidiary, the company’s revenue in the first year of Russia’s full-scale invasion of Ukraine increased by 8% to RUB 140.3 billion, and net profit – to RUB 48.2 billion, which is 45% more than in 2021. “Having confidence in Russia’s economic potential, the company is implementing a large-scale long-term investment program,” the statement said.
“Japan Tobacco International (JTI) is the undisputed leader of the tobacco market in Russia (market share – 34.9%). The company itself has openly stated that the Russian market generated about USD 2 billion. USD in 2022 for the JT Group, or approximately 11% of its consolidated revenue for 2022,” the NACP cites data on the second company’s activities in Russia.
“JTI is the largest investor and leading taxpayer in the Russian tobacco industry. Over the past 20 years, JTI’s investments in the Russian economy have exceeded $4.6 billion. In 2020, the company’s tax payments accounted for 1.4% of the federal budget’s revenue,” the NACP said in a statement.
The NAPC emphasizes that despite the fact that “representatives of both companies have announced their plans to close their business in Russia, stop new investments and marketing activities in Russia, they still continue to manufacture and distribute products in Russia.”
