MOL to Have Full Control over INA Oil Company?

Total Croatia News

ZAGREB, August 9, 2018 -The MOST party leader Božo Petrov expressed fear on Thursday that the government-sponsored draft law on the privatisation of the oil and gas group INA, which has been put to public consideration, would actually revoke Article 10 of the existing legislation, which would clear the way for MOL to completely take over the biggest Croatian company.

Petrov told a news conference that it was Article 10 that had to date prevented MOL from implementing its plan to have full control over INA and “dismantle” it. “All in all, the document which is now at the stage of public consideration and which is supposed to bring the INA law in line with EU rules, is poised to rescind the article and thus give an alibi to MOL to completely take over INA and eventually dismantle the company,” Petrov said.

In July, the European Commission decided to put on hold the referral of Croatia to the Court of Justice of the EU over its law on the privatisation of the INA oil company because the Croatian government has in the meantime published a new draft bill that could remove the reasons for the proceedings.

“The Commission had decided to refer Croatia to the Court of Justice on 13 July 2017, for failing to make the 2002 law on the privatisation of Industrija Nafte d.d. (‘INA law’) compliant with EU rules on the free movement of capital and the freedom of establishment,” the Commission reported on 19 July. “Since then, Croatian authorities have been discussing the necessary amendments with the Commission to bring the INA law in line with EU rules,” the EC said, adding that recently Croatia submitted a draft amending the law to address the Commission’s main concerns.

The EC found the said law disputable because it gave the Croatian state special powers in the company, including the right to veto its decisions regarding the sale of shares or property whose value exceeds a certain amount. Also, under the law, the state can oppose important decisions of the INA management, such as decisions concerning the change of the company’s line of business, awarding of licences and the change of its main office’s address.

Before that, the Croatian government underscored that the INA law was a complex issue that concerned energy security. “Amendment of the INA law is a very complex issue precisely because it concerns energy security, which is why we tie its adjustment to the process of resolving overall relations between INA stakeholders and the ongoing arbitration proceedings,” the government said then.

INA is the main Croatian energy company, partially owned by the Croatian government.

In November 2014, the European Commission decided to take action against Croatia for failure to amend such a law. After assessing the observations of the Croatian authorities in December 2016, the European Commission sent a reasoned opinion to Croatia to formally request the amendment of the INA law, on the ground that it violates the rules of the Treaty on the Functioning of the European Union (TFEU) on the freedom of establishment (Art. 49 of TFEU) and the free movement of capital (Art. 63 of TFEU).

A year ago, the cabinet of Prime Minister Andrej Plenković said that it was in contact with the European Commission in order to find a solution to the issue of the incompatibility of the 2002 law on the privatisation of the INA oil company with the European Union acquis communautaire, and the solution will be “in compliance with the requests stemming from the acquis and will also provide sufficient protection of Croatian national interests in the field of energy security and stability, without any need for lawsuits”.


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