Agreements, which only set out general terms for trading, but do not specify the price setting of volume optionality, e.g. the amount of electricity, time and place of delivery and price (such as the General Agreements Concerning the Delivery and Acceptance of Electricity, EFET Master Agreements etc.), under the REMIT reporting framework are not reportable contracts.

 

Only the individual contracts concluded under the terms of the above general agreement are reportable to the ACER under REMIT (ACER's Frequently Asked Questions (FAQs) on REMIT transaction reporting, 3rd Edition, 16 February 2016, Question 1.1.11).

 

The inherent condition is that such master agreement only sets out the rules for trading activities of the two counterparties of a contract, but does not set any obligation to the two parties (note, however, the ACER's stance contained in the REMIT Q&A point III.3.11 regarding framework agreements - see boxes).

 

EFET General Agreement with defined maximum amount of delivery of gas per year are not reportable.

 

The inclusion of the maximum volume in the contract is specific to the national law and does not make the EFET General Agreement a non-standard contract.

 

 

 

Frequently Asked Questions (FAQs) on REMIT transaction reporting

Question 1.1.11

 

Reference to Article 3 (1) of Commission Implementing Regulation (EU) No 1348/2014.

 

As for the framework agreements such as EFET General Agreement Concerning the Delivery and Acceptance of Electricity, could you please explain if they also should be reported even if an Individual Contract (in the meaning of the EFET General Agreement) wasn't concluded?

 

Example: The Parties concluded the EFET General Agreement but they didn't conclude any Individual Contract (in the meaning of the EFET General Agreement). First Individual Contract was concluded three months after conclusion of the EFET General Agreement.

 

Answer

 

Our understanding is that such master agreement only sets out the rules for trading activities of the two counterparties of a contract, but does not set any obligation to the two parties.

 

In our opinion, the conclusion of such a general agreement of the Delivery and Acceptance of Electricity, i.e. the agreement sets out the general terms for trading, but does not specify the price setting of volume optionality, e.g. the amount of electricity, time and place of delivery and price, is not a reportable contract.

 

Furthermore, only the Individual contracts concluded under the terms of a General Agreement Concerning the Delivery and Acceptance of Electricity shall be reported to the Agency.

 

 

 

 

ACER's REMIT Q&A III.3.11

 

As for the framework agreements or OTC physical purchase orders, could you please clarify the scope of reporting? Do we need to report framework contracts as well as all OTC physical purchase orders?

 

Yes. The framework agreements are considered non-standard contracts and all contracts to OTC physical purchase orders have to be reported to the Agency in line with Article 3(1)(a) of Commission Implementing Regulation (EU) No 1348/2014.

 

 

 

 

 

Frequently Asked Questions (FAQs) on REMIT transaction reporting

 

Question 3.1.13

 

Reference to documents: Article 3 (1) of Commission Implementing Regulation (EU) No. 1348/2014 - Transaction Reporting User Manual (TRUM) – Annex II Examples of transaction reporting

 

In connection with practical example indicated below we would like to ask how such a trading situation should be reported? Please indicate what combination of trading scenarios included in Annex II must we choose?

 

Trading scenarios included in Annex II envisage two steps: reporting bilateral contract and execution. What kind of reporting scenarios should be chosen when trading activities include three (or more) sequence? Example indicated below:

 

1. Parties concluded General Agreement X (and they didn't conclude any Individual Contract), there is no specified price and volume; after a few months

 

2. Parties concluded Individual Contract with maximum quantity, but they didn't specify price; after a few months

 

3. Parties concluded Individual Contract with defined quantity and price

 

Answer

 

The FAQs document on transaction reporting (please see Question 1.1.11) and Annex II to the TRUM address this question. Master agreements are not reportable. If the first report is about the non-standard contract, then executions under the framework of that non-standard contract have to be reported.

 

 

 

 

Frequently Asked Questions (FAQs) on REMIT transaction reporting

 

 

Question 1.1.25

 

Please give us your clarification on the following issue.


Notwithstanding the below ACER’s explanation published in updated FAQ: QUESTION 1.1.12

 

Reference to Article 3 (1) of Commission Implementing Regulation (EU) No 1348/2014.

 

As for the framework agreements such as EFET General Agreement Concerning the Delivery and Acceptance of Electricity, could you please explain if they also should be reported even if an Individual Contract (in the meaning of the EFET General Agreement) wasn’t concluded? Example: The Parties concluded the EFET General Agreement but they didn’t conclude any Individual Contract (in the meaning of the EFET General Agreement). First Individual Contract was concluded three months after conclusion of the EFET General Agreement.


Our understanding is that such master agreement only sets out the rules for trading activities of the two counterparties of a contract, but does not set any obligation to the two parties. In our opinion, the conclusion of such a general agreement of the Delivery and Acceptance of Electricity, i.e. the agreement sets out the general terms for trading, but does not specify the price setting of volume optionality, e.g. the amount of electricity, time and place of delivery and price, is not a reportable contract. Furthermore, only the Individual contracts concluded under the terms of a General Agreement Concerning the Delivery and Acceptance of Electricity shall be reported to the Agency.


Could you please inform us if there is a need to report (backload) the EFET General Agreement in which counterparties agree on maximum yearly gas volume that can be delivered under this contract (not an obligation to any of the parties). Does the following wording make the framework contract non-standard, that have to be reported according to the REMIT:


Ҥ 4 Primary Obligations For Delivery and Acceptance of and Payment For Natural Gas
At the end of §4.1(a) insert: “The amount of Contract Quantities for relevant Total Supply Periods agreed under all Individual Contracts entered hereunder shall not exceed ______ (________) MWh per year.”


According to Ukrainian legislation, the approximate maximum gas volume is a fundamental condition of the contract, due to the Clause 1 of the Regulation on the form of the international agreements (contracts), N201 dd 06.09.2001: “The conditions that need to be defined in the international agreement (contract), if the Parties of such agreement (contract) do not agree on the different defining of the contract conditions and such arrangement does not release the contract of subject, object, purpose and other fundamental conditions, without confirming of which between the parties such contract can be considered as non-executed, or invalid due to the disregard of the provision on the contract form applying under the applicable Ukrainian law, are the follows:....4. The quantity and quality of goods”


Also for your information, such approximate maximum volume in all already executed EFET General Agreements is variable and is agreed based on the ability of the counterparty to supply. In addition, I would like to emphasize on the fact that this indication of the volume in the Election Sheet is not an obligation to the Seller to deliver and to the Buyer to off-take. This is just an approximate maximum limit, which was approved by Ministry of Economic Development and Trade.

 

We have several EFET GA executed before the April, 7th, which are all outstanding and in which the approximate maximum gas volume was specified. Thus, we would highly appreciate if you could give us your official opinion on this issue as soon as possible, so we would be ready to backload them in case of need till the July, 6th.

 

Answer

 

In the light of Question 1.1.11 we do not consider EFET General Agreement with defined maximum amount of delivery of gas per year reportable. The inclusion of the maximum volume in the contract is specific to the national law and does not make the EFET General Agreement a non-standard contract.

 

 

 

 

 

 

 

IMG 0744

    Documentation    

 

 

 

 

 

Frequently Asked Questions (FAQs) on REMIT transaction reporting, Questions 1.1.11, 3.1.13, 3.1.25, 3.1.28

 

Questions and Answers on REMIT, Question III.3.11

 

 

 

 

 

 

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