Germany: Operation Of Critical Infrastructures And Public Security - Federal Government Places Rosneft Deutschland Under Trusteeship

The Federal Government, through the Federal Ministry of Economic Affairs and Climate Action (Bundesministerium für Wirtschaft und Klimaschutz, BMWK), today placed Rosneft Deutschland GmbH ("RDG") and RN Refining & Marketing GmbH ("RNRM") under the trusteeship of the Federal Network Agency (Bundesnetzagentur, BNetzA). This is the first time that the BMWK has used a new legal basis anchored in the German Energy Security Act (Energiesicherungsgesetz, EnSiG) to avert risks in connection with the operation of critical infrastructures in the energy sector.

On the basis of Sec. 17 EnSiG, the BMWK placed the German Rosneft subsidiaries RDG and RNRM under the trusteeship of the Federal Network Agency by order published in the Federal Gazette (Bundesanzeiger, BAnz) on 16 September 2022. The BMWK justifies ordering the trusteeship by stating that the maintenance of business operations of the refineries in question was in danger because of the companies' ownership situation. Key critical service providers such as suppliers, insurance companies, IT companies and banks, as well as customers, were no longer willing to cooperate with Rosneft - neither with refineries with Rosneft participation nor with the actual German Rosneft subsidiaries, RDG and RNRM.

Following the appointment of the Federal Network Agency as trustee over Gazprom Germania GmbH, the measure is a further example of intervention measures against operators of critical energy infrastructures to ensure secure supply in Germany. While the order against Gazprom Germania GmbH was issued under Sec. 6 of the German Foreign Trade and Payments Act (Außenwirtschaftsgesetz, AWG) as part of the BMWK's powers under the AWG to safeguard public security, the new provision in Sec. 17 EnSiG now comes into play for the first time. The basis for this is the German Act Amending the Energy Security Act of 1975 (Gesetz zur Änderung des Energiesicherungsgesetz von 1975, EnSiGuaÄndG), which was passed in the Bundestag on 12 May 2022, in response to the Russian aggression against Ukraine, and which now contains specific provisions on the trusteeship and expropriation of operators of critical infrastructure in Secs. 17 et seq. 

The new intervention measures are intended to enable a response to the interruption of energy supplies from Russia in order to ensure the secure supply of energy in Germany. Since the AWG provision applied in the case of Gazprom Germania GmbH only gives the BMWK corresponding powers of intervention in certain constellations (in connection with an acquisition), it became necessary to include specific provisions in the EnSiG. 

The trusteeship and expropriation measures are directed against operators of critical infrastructures within the meaning of Sec. 2 X of the German Act on the Federal Office for Information Security (Gesetz über das Bundesamt für Sicherheit in der Informationstechnik, BSI-Gesetz). Classification as a critical infrastructure is made according to the requirements of the so-called BSI Critical Infrastructure Ordinance (Verordnung zur Bestimmung Kritischer Infrastrukturen, BSI-KritisV). According to this, the energy sector encompasses electricity supply, gas supply, fuel and heating oil supply and district heating supply, insofar as the corresponding plants reach certain threshold values. In addition to the actual operating companies, all group parent companies and their affiliates are also covered by Secs. 17 et seqq. EnSiG. Pursuant to Sec. 18 (2) No. 3 EnSiG, shares in companies that are dependent on operators of critical infrastructures can also be the target of expropriation. 

The central prerequisite for ordering a trusteeship or, as a downstream measure, an expropriation, is the existence of a concrete risk that, without the security measure, the company in question will not fulfil its tasks aimed at a functioning community in the energy sector and that there is a threat that the security of supply will be impaired. The law does not contain any further criteria for determining the existence of a concrete risk, which means that the BMWK has a broad margin for discretion in this respect. At the same time, however, the requirement of a concrete risk - at least according to its wording - is narrower than the requirement of an impairment of public interests that suffices for measures under foreign trade law (Secs. 55 et seqq. of the German Foreign Trade and Payments Ordinance [Außenwirtschaftsverordnung, AWV]). 

By ordering the trusteeship, the following in particular can be achieved:

• the exercise of voting rights by the company's shareholders is ruled out,
• the voting rights arising from the company's shares are transferred to an agency of the Federal Government and this agency is authorised to remove members of the management and appoint new members as well as to issue instructions to the management, and
• the management's authority to manage and dispose of the company's assets is limited and any dispositions are subject to BMWK approval.

Companies affected by an order of trusteeship or expropriation can apply to the German Federal Administrative Court (Bundesverwaltungsgericht, BVerwG) for summary proceedings for injunctive relief. This court is exclusively responsible for injunctive relief in the first and, at the same time, last instance.

Since the order of trusteeship qualifies in terms of constitutional law as a so-called regulation defining the contents and limits of property, it must fundamentally be accepted by the affected companies without compensation. Only in special cases may financial compensation be necessary on grounds of proportionality, if the trusteeship causes an unreasonable burden. 

For operators of critical energy infrastructures and their affiliates, the new intervention options and the implementation practice of the BMWK mean that internal company measures need to be taken in good time to avert even the semblance of an impending impairment of supply security. In individual cases, it may also be advisable to contact the BMWK as early as possible and to coordinate possible voluntary concrete security measures in advance of a trusteeship order.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.