The European Commission has formally requested Croatia to amend the law on privatisation of INA Energy Company, saying it was violating the principles of free movement of capital and the freedom of establishment.
The Commission claims that the law on privatisation of INA-Industrija Nafte d.d. from 2002 grants the Croatian state special powers in the company, including veto on sale of its shares and assets with a value exceeding certain respective thresholds. The consequences are such that other stakeholders are not able to influence the most important decisions in the company within proportions of their shareholdings.
The majority of 49.08% of INA is in the ownership of the Hungarian oil company MOL. The Croatian government kept its stake of 44.84%, while institutional and private investors hold 6.08% of the shares.
The veto powers “may discourage potential investors from making investments in INA,” said the Commission in its December infringements package memo, which also found other member states in breach of various EU’s directives.
The privatisation of the oil and gas company INA-Industrija Nafte d.d. has been resurfacing as a grudge point in the relations between authorities in Zagreb and the European Commission, even before the country joined the EU.
“The Croatian authorities undertook the commitment to align the INA law with EU law before its accession to the EU but it has not been modified yet,” said the EU’s executive body in the written reasoned opinion.
While the EU’s executive office acknowledges the importance of INA as the key energy company, it said security of the energy supply could not justify restrictions to the freedoms listed in the Treaty on the Functioning of the European Union.
“If Croatia fails to bring the INA law into line with EU law within two months, the Commission may decide to refer it to the Court of Justice of the EU,” concluded the European Commission.
“What is of the strategic importance to us is to keep a clear position in the arbitrage processes in order to protect the national interests and INA as strategically important oil company,” said Croatian Prime Minister Andrej Plenković to the media, confirming that the Government will continue discussion with the Commission on this subject.