Specific REMIT clause in the contract is needed when company imports electricity or natural gas into the EU.
Importers of electricity or natural gas usually are REMIT market participants, while their overseas counterparties typically are not.
This situation effects in some regulatory complications, and, it seems, they can be equally common as serious.
To be brief: the importer may on some occasions be barred from trading, on the other hand it may be necessary for the importer to publish the information about a certain amount of energy not being imported as originally foreseen (information concerning importer’s own business).
This could happen, in particular, when planned or unplanned disturbances occur at the extra-EU counterparty and the deliveries are hampered.
The additional contract clause is needed then, under which the natural gas producer / electricity generator located outside the EU provides the EU importer with all the necessary information about foreign activities that may affect the importer (and force the importer to stop trading or to publish inside information).
Equally difficult case may arise when any company subject to the REMIT holds an inside information on the asset of another market participant, which, however, does not consider the information to be inside information, hence, there is a conflict as to this qualification between the parties.
Recommended course of action in this regard is that each firm fulfils its obligations to publish the part of the inside information that concerns their own business or facilities pursuant to Article 4(1) of REMIT.
Such obligations may be a surprise for some market participants, as, in principle, the 6th edition of the ACER Guidance on the application of REMIT reads: ‘’the obligation to disclose inside information does not apply to a person or a market participant who possesses inside information in respect of another market participant’s [or other entity’s] business or facilities, in so far as that owner of this inside information is not a parent or related undertaking”.
The trading ban mentioned above follows, in turn, from the fact that the importer can hold such inside information as one of the persons listed in Article 3(2) of REMIT (e.g. persons with access to the information through the exercise of their employment, profession or duties under Article 3(2)(c) of REMIT).
Provided that the inside information is not published by the extra-EU company (which is not a REMIT market participant with obligations under Article 4(1) of REMIT), he importer will not be allowed to trade using such inside information as this would cause a potential breach of Article 3 of REMIT (insider trading).