EuroGas complains about Slovakia violating the EU Treaty

The US company EuroGas filed a complaint with the European Commission (EC) about Slovakia allegedly having violated several provisions of the Treaty on the European Union.

The US company EuroGas filed a complaint with the European Commission (EC) about Slovakia allegedly having violated several provisions of the Treaty on the European Union.

The reason for the complaint is police raid of several Slovak security forces on July 2, 2014 in which documents containing almost 16,000 pages, computers and software with sensitive data about its daughter company Rozmin were seized, the TASR newswire quoted the EuroGas complaint.

Rozmin lost in 2004 its license to mine talc in deposit in a lucrative deposit in Gemerská Poloma. EuroGas claims, according to the Plus 7 Dní weekly, that behind these actions is a corruption case it has evidence about. This is allegedly one of the reasons why the mother company filed a complaint against the Slovak Republic with the International Centre for Solving Investment Disputes (ICSID) of the World Bank in Washington on June 25. EuroGas sues Slovakia for damage compensation amounting to 3.2 billion USD (€2.3 billion) for marred revenues that the company could gain, if it started to mine talc as planned in 2007, as calculated by the KPMG auditing company.

EuroGas sees the police operation as connected to the ongoing arbitration proceeding. The company called the measures made by Slovakia “resembling the Soviet era” and unworthy of a EU-mmebr state, while also expressing hope that the EC will secure that Slovakia recalls its measures and returns all seized documents and media.

EuroGas got the mining license for talc in 1998, but in 2005, it was withdrawn. In June, the Austrian daily Die Presse commented that the case raise doubts about the transition period after the fall of communism. Finally a mail-box company part of the the Austrian Schmid-Holding (SIH) company acquired the license and has since then invested about 30 million euros in the deposit. Company head, Robert Schmid, stressed that the case has no direct connection to SIH, but can negatively impact its business.

The Slovak Supreme Court has twice ruled that it was unlawful to withdraw the mining license of EuroGas. The threat of suit made Slovakia show readiness to negotiate a compromise, and Finance Ministry state secretary Peter Pellegrini allegedly travelled to Vienna in April to meet secretly representatives of EuroGas; but no agreement was reached.

EuroGas has been threatening with arbitration since 2010, and in 2012, the EuroGas Inc., registered in the US, joined the suit, according to the TASR newswire. EuroGas cited the violation of rights stemming from the treaty between then Czechoslovak Federative Republic and the US from 1991 concerning protection of investments; however, the Slovak Finance Ministry last year denied any violation of the treaty.

The talc deposit in Gemerská Poloma was discovered by chance in 1985, and thanks to the raw material’s good quality and purity, it is considered one of the most important in the world.

(Source: TASR, Plus 7 Dní)
Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.

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