Sanctions over Nord Stream 2: This is how the US Congress wants to block the pipeline


Nord Stream 2 sanctions
The US Congress wants to block the pipeline

With sanctions against the companies involved, the USA is preventing the Nord Stream 2 Baltic Sea pipeline from being completed. Now the US Congress wants to tighten the measures. However, one does not want to proceed against the governments of the European allies.

In the dispute over the German-Russian Baltic Sea pipeline Nord Stream 2, the US Congress wants to rule out sanctions against the governments and authorities of European partner states such as Germany. However, the threatened punitive measures are to be expanded against companies involved in the project. This emerges from the draft law package on the US defense budget, on which Democrats and Republicans have agreed in both chambers in the US Congress.

Accordingly, sanctions against companies should only be allowed to be imposed after potentially affected governments of EU member states, Switzerland, Norway and Great Britain have been consulted. So far it was only known that both the House of Representatives and the Senate – the two chambers in the US Congress – wanted to tighten sanctions against the companies involved in the pipeline. In the two draft bills that have now been brought together for the defense budget package, there has so far been no mention of the need to consult European partners or that sanctions against governments or authorities in Europe are not permitted. After being passed by both chambers, US President Donald Trump has to sign the law for it to come into force.

Ships in sight

Construction work on Nord Stream 2 was halted almost a year ago after the US enacted a sanctions law (Peesa) against the special ships laying the pipes. The two Swiss laying vessels were then withdrawn. Russian President Vladimir Putin announced that he would complete the work independently – independently of foreign partners.

According to the sanctions, persons concerned may be banned from entering the USA. Any data subject or company property in the United States can be frozen. In October, the US State Department published new guidelines that the provision of certain services and facilities to the lay vessels could also be penalized.

The new US draft law (Peesca) now provides for a further tightening of the punitive measures. Accordingly, companies that provide ships for other activities in connection with laying work are also to be penalized. This could include digging trenches for the pipeline. Companies that insure affected ships or make their port facilities available to them are also threatened with sanctions. The same goes for companies that certify the pipeline so that it can go live.

It has now been added to the draft that the US Secretary of State must consult with the governments of these countries before imposing sanctions on companies from EU member states, Switzerland, Norway and Great Britain. In his report to Congress – which is the basis for the imposition of sanctions – the minister must state any concerns raised by these governments. It also states that sanctions are not applicable against the listed European governments and their entities.

No change from new US government

The US government had only made it clear last month that it wanted to stop the pipeline shortly before completion and increase the sanction pressure on the European companies involved. “This pipeline will not take place,” said a high-ranking US government representative at the time of the German press agency in Washington. The government has identified companies and people who face the first punitive measures. The new threats sparked outrage in German business and politics. The US government official said that supporters of Nord Stream 2 should not hope that there will be a change of government in Washington. He pointed out that both Peesa and Peesca receive bipartisan support and provide for mandatory sanctions. “That means that the sanctions will be implemented regardless of who sits in the Oval Office.”

In the future, 55 billion cubic meters of natural gas will be pumped from Russia to Germany every year through the two 1200-kilometer pipelines of Nord Stream 2 – bypassing Ukraine. The pipeline, which costs around 9.5 billion euros, is 94 percent ready. However, the USA has been running a storm against this for years and justify this with the excessive dependence of its European partners on Russian gas. They are supported by Eastern European countries such as Poland and the Baltic countries. Critics accuse the US, on the other hand, of only wanting to sell their liquid gas better in Europe. The fact that the leadership in the USA is rejected across all parties suggests that the strategic concerns are also being taken seriously.

In Nord Stream 2 AG, based in Zug, Switzerland, the Russian company Gazprom is formally the sole shareholder. In addition, there are the German groups Wintershall Dea – a joint venture between BASF and LetterOne – and Uniper (a spin-off from Eon) as well as the Dutch-British Shell, Engie (formerly GDF Suez) from France and OMV from Austria as “supporters”. Nord Stream supervisory board chairman is former chancellor Gerhard Schröder, at Nord Stream 2 he is chairman of the board of directors.

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