Energy News – 61st Issue-EU: Imposition of Fines for Violation of REMIT
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EU: Imposition of Fines for Violation of REMIT
In December 2018, two new fines were levied by the National Regulatory Authorities (NRAs) for violations of REMIT. As the competent authorities in the energy sector, NRAs are notably proceeding into investigations and imposition of fines under Regulation (EU) No 1227/2011 on Wholesale Energy Market Integrity and Transparency (REMIT) across Europe. The aforementioned
Regulation prohibits market manipulation, requires effective and timely public disclosure of inside information by market participants and obliges firms that professionally arrange transactions to report the suspicious ones.
In more detail, the Spanish NRA, Comisión Nacional de los Mercados y la Competencia (CNMC) fined Galp Gas Natural S.A. (Galp) and Multienergía Verde, S.L.U (Multienergía) for market manipulation, whereas Energitilsynet, the Danish NRA, imposed a fine to Energi Danmark A/S for 10 counts of market manipulation too. It is worth highlighting that these new instances of fine imposition followed the issuing of others imposed under REMIT across Europe in 2018. To be more specific in April 2018, the Spanish NRA, CNMC, fined five companies a total of EUR 10,200 for a breach of their obligation to register as market participants under REMIT. Additionally, in May 2018 the Hungarian NRA, Magyar Energetikai és KözmĦ-szabályozási Hivatal imposed a fine of approximately EUR 40,000 to an organised market place for the infringement of reporting obligations under REMIT and in October 2018, the disciplinary tribunal of the French Regulatory Commission fined VITOL S.A EUR 5 million for engaging in market manipulation on the French Southern virtual Gas Trading Point. As was previously mentioned, the fines followed the issuing of two new ones announced in December 2018, as reported by the Agency for Cooperation of Energy Regulators (ACER). In more detail, Spanish NRA, CNMC sanctioned Galp and Multienergía with a EUR 80,000 and EUR 120,000 fine (respectively) for market manipulation. According to the NRA from 12 to 20 January 2017 and on 17 January 2017, Multienergía and Galp respectively secured or attempted to secure the price of several natural gas wholesale products for delivery in Spain, traded at an artificial level in breach of article 5 of REMIT. As far as the second NRA fine is concerned Energitilsynet, the Danish NRA fined Energi Danmark A/S of approx. EUR 100,000 and the Danish State Prosecutor for Serious Economic and International Crime has also seized the income of EUR 47,000 obtained through the 10 counts of market manipulation. As was reported by Energitilsynet, Energi Danmark A/S breached the prohibition on market
manipulation pursuant to article 5 of REMIT by capacity hoarding, meaning that Energi Danmark A/S hoarded capacity on the electricity interconnectors by trading with itself thus managing to exclude third party traders and consequently hinder competition. This behaviour led to or could have potentially led to the creation of misleading or artificial prices on the intraday wholesale market for electricity.
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