Frequently Asked Questions (FAQs) on REMIT transaction reporting
Please give us your clarification on the following issue.
Notwithstanding the below ACER’s explanation published in updated FAQ: QUESTION 1.1.12
Reference to Article 3 (1) of Commission Implementing Regulation (EU) No 1348/2014.
As for the framework agreements such as EFET General Agreement Concerning the Delivery and Acceptance of Electricity, could you please explain if they also should be reported even if an Individual Contract (in the meaning of the EFET General Agreement) wasn’t concluded? Example: The Parties concluded the EFET General Agreement but they didn’t conclude any Individual Contract (in the meaning of the EFET General Agreement). First Individual Contract was concluded three months after conclusion of the EFET General Agreement.
Our understanding is that such master agreement only sets out the rules for trading activities of the two counterparties of a contract, but does not set any obligation to the two parties. In our opinion, the conclusion of such a general agreement of the Delivery and Acceptance of Electricity, i.e. the agreement sets out the general terms for trading, but does not specify the price setting of volume optionality, e.g. the amount of electricity, time and place of delivery and price, is not a reportable contract. Furthermore, only the Individual contracts concluded under the terms of a General Agreement Concerning the Delivery and Acceptance of Electricity shall be reported to the Agency.
Could you please inform us if there is a need to report (backload) the EFET General Agreement in which counterparties agree on maximum yearly gas volume that can be delivered under this contract (not an obligation to any of the parties). Does the following wording make the framework contract non-standard, that have to be reported according to the REMIT:
“§ 4 Primary Obligations For Delivery and Acceptance of and Payment For Natural Gas
At the end of §4.1(a) insert: “The amount of Contract Quantities for relevant Total Supply Periods agreed under all Individual Contracts entered hereunder shall not exceed ______ (________) MWh per year.”
According to Ukrainian legislation, the approximate maximum gas volume is a fundamental condition of the contract, due to the Clause 1 of the Regulation on the form of the international agreements (contracts), N201 dd 06.09.2001: “The conditions that need to be defined in the international agreement (contract), if the Parties of such agreement (contract) do not agree on the different defining of the contract conditions and such arrangement does not release the contract of subject, object, purpose and other fundamental conditions, without confirming of which between the parties such contract can be considered as non-executed, or invalid due to the disregard of the provision on the contract form applying under the applicable Ukrainian law, are the follows:....4. The quantity and quality of goods”
Also for your information, such approximate maximum volume in all already executed EFET General Agreements is variable and is agreed based on the ability of the counterparty to supply. In addition, I would like to emphasize on the fact that this indication of the volume in the Election Sheet is not an obligation to the Seller to deliver and to the Buyer to off-take. This is just an approximate maximum limit, which was approved by Ministry of Economic Development and Trade.
We have several EFET GA executed before the April, 7th, which are all outstanding and in which the approximate maximum gas volume was specified. Thus, we would highly appreciate if you could give us your official opinion on this issue as soon as possible, so we would be ready to backload them in case of need till the July, 6th.
In the light of Question 1.1.11 we do not consider EFET General Agreement with defined maximum amount of delivery of gas per year reportable. The inclusion of the maximum volume in the contract is specific to the national law and does not make the EFET General Agreement a non-standard contract.