Czech BIS: Various entities sought to exploit looming shortage of energy commodities last year

The looming shortage of energy commodities last year attracted the attention of various private entities, which sought to exploit the situation to their advantage. Apparently attractive offers to supply fuels or natural gas often had dubious origins and may in some cases have served to advance the interests of Russian entities. The Security Information Service (BIS) said this in its 2022 annual report.

According to the BIS, Russia’s invasion of Ukraine last year brought into sharp focus the security threats associated with Western countries’ dependence on supplies of strategic commodities from countries hostile to liberal democracy. „Gradually eliminating this dependence will also require a certain willingness to sacrifice our own economic growth to some extent,“ the annual report says.

The BIS says it is essential for the Czech Republic to prepare for this situation, including by mapping its strategic vulnerabilities in relation to China and seeking alternatives for bilateral trade cooperation. „China’s capabilities will be several orders of magnitude greater than Russia’s, and any pressure the Czech Republic faces will also be greater,“ the counterintelligence service warns. It says this pressure will be primarily economic.

According to the BIS, energy prices posed an economic and social threat to the Czech Republic last year. For security reasons, the counterintelligence service says it is necessary to break free from dependence on supplies of commodities from Russia as soon as possible. „The situation will require a long-term transformation of the energy sectors of EU countries and will bring about changes across society,“ the BIS said. Dependence on Russia was significantly reduced last year, according to the BIS, although Russia had long used energy commodities to advance its geopolitical objectives.

According to the BIS, the need to adopt new legislation in the energy sector very quickly last year created opportunities for covert lobbying by private entities. „It gave them the opportunity to influence the creation of legislative conditions for the long term. Private entities often exploited their greater capacity compared with the state apparatus to advance their interests, or took advantage of privileged access to certain state representatives,“ the BIS says. These entities therefore sought unjustified advantages in the application of various compensation mechanisms.

According to the BIS, concerns that the already poor financial situation of some state-controlled companies would worsen proved justified. „In some cases, actual conditions did not match the approved business plans, and the management of some entities therefore sought to distort and manipulate their financial results for its own purposes in order to make the actual situation appear better,“ the BIS says. Inadequate reporting to the supervisory boards of state-controlled entities is a longstanding phenomenon, according to the counterintelligence service.