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Brussels, 29 January 2009

Ireland ordered to amend legislation that allows its oil stocks to be used as collateral

The European Commission today decided to send a reasoned opinion to Ireland on the grounds that its national legislation does not comply with the EU Directive on emergency oil stocks. Community law requires Member States to hold a minimum level of oil stocks. It also requires the stocks held to be fully at the disposal of Member States in the event of oil supply difficulties. Irish law allows stocks to be used as collateral, which means that they are not fully available to be mobilised as needed in an emergency, which breaches Community law.

The Commission has found that Irish legislation from 2007 allows strategic stocks to be pledged as security for loans granted to the holder of those stocks. However, stocks held pursuant to the Directive may not be used as collateral or encumbered by any charges whatsoever. A letter of formal notice on this subject was therefore sent to the Irish authorities in May 2008.

The availability of oil stocks is a key element of the existing Community legislation. The Commission sees it as vital for Member States to ensure that stocks are available and accessible at all times and to make sure that the stocks held are fully available to be mobilised as needed in an emergency.

Ireland will have two months to respond to the reasoned opinion. The Commission will then decide whether the matter should be referred to the Court of Justice.

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