The US government wants to prevent Nord Stream 2 shortly before delivery. European companies are currently being warned of impending sanctions. Little should change under Joe Biden either.
The US government sees the German-Russian Baltic Sea pipeline Nord Stream 2 in the last meters before the end and is increasing the sanction pressure on the European companies involved. “This pipeline will not take place,” said a senior US government representative from the Washington Dpa news agency. “This is what a dying pipeline looks like.” The government has identified a number of companies and people facing initial sanctions under the Nord Stream 2 Sanctions Act.
Those affected are currently being contacted and informed of impending sanctions. “The US does not want to impose sanctions on European companies. We are making these calls to warn them and to give them time to get away,” said the government official. The handling of Nord Stream 2 activities is not subject to sanctions.
“Undoing your participation in Nord Stream 2”
“Rather than investing more money in the Nord Stream 2 pipeline and related activities, companies would do better to use force majeure clauses to reverse their stake in Nord Stream 2,” said the government official. He did not provide any information about which companies would be specifically contacted. He called Nord Stream 2 “a geopolitical project that Russia will use to blackmail European countries”.
The US states that Germany would be dependent on Moscow for the pipeline. The US Congress passed the “Law to Protect Europe’s Energy Security” (Peesa) last December with bipartisan support. Despite sharp criticism from Germany and Russia, US President Donald Trump enacted the law on December 20. The sanctions were aimed at the operating companies of the special ships that laid the pipelines for the pipeline.
Donald Trump, Acting US President: His administration has announced sanctions against European companies for Nord Stream 2. (Source: dpa)
Construction was initially halted by Peesa. The Swiss company Allseas, which had been laying pipes in the Baltic Sea with special ships, stopped work at the end of last year due to the threat of US sanctions. According to the operator consortium Nord Stream 2, 2,300 of the 2,460-kilometer gas pipeline had already been built from Russia to Germany at that time.
Interventions in European sovereignty?
The US government official said the cost of the delay meant that the consortium of operators faced the choice of “ either going to Moscow for a bailout or asking for additional money from creditors, and in recent months we have had commitments from current creditors. received that there will be no additional or new funding. ”A Nord Stream 2 spokesperson said that the shareholders, five financial investors and suppliers are involved in the project. The costs of delays and threats of sanctions are currently not quantifiable.
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) and the Dutch-British Shell, Engie (formerly GDF Suez) from France and OMV from Austria. The chairman of the supervisory board of Nord Stream is former chancellor Gerhard Schröder (SPD), at Nord Stream 2 he is chairman of the board of directors.
Uniper noted “with regret that the US continues to seek to undermine a major Nord Stream 2 infrastructure project that we believe is necessary for Europe’s energy security”. This is a clear interference in European sovereignty. Germany has confirmed its political support for Nord Stream 2 given its role in security of supply, Uniper said.
Putin wants to finish the project
Wintershall Dea said when asked, “We have not received any warnings from the US government.” The four European partners have committed to finance half of the estimated total cost of 9.5 billion euros in the long term. That is no less than 950 million euros for each company. “Wintershall Dea had paid out EUR 730 million in April 2020,” he said.
Vladimir Putin: The Russian president wants to finish work on Nord Stream 2 on his own. (Source: dpa)
After US sanctions were imposed, Russian President Vladimir Putin announced that he would complete the work independently of foreign partners. The operator consortium had also stressed that they wanted to complete the pipeline. The Russian laying vessel “Akademik Tscherski” would complete the project.
In October, the US State Department issued new guidelines, according to which the provision of certain services and facilities for the laying vessels could also be penalized. The US government official said an initial government report will be presented to Congress in the coming days or weeks. It would mention people and companies potentially breaking the law.
Confrontation between Berlin and Washington
So far, no sanctions have been imposed under Peesa. Several US senators wrote in August in a letter threatening the German Baltic port of Sassnitz-Mukran with sanctions. According to the website marinetraffic.com, the “Akademik Tscherski” is located there.
As part of the Defense Budget (NDAA) package for 2021, a law will be passed to tighten sanctions. According to this law (Peesca), companies that supply ships for other activities related to laying work must also be penalized. This includes digging trenches for the pipeline.
Companies that insure affected ships or make their port facilities available are also threatened with sanctions. The same goes for companies that certify the pipeline so that it can go live.
After the sanctions that have already been imposed, but also after the planned sanctions, data subjects may be denied entry to the US. Any data subject or company property in the United States can be frozen.
The US government official stressed that Nord Stream 2 supporters should not hope for a change of government in Washington. He pointed out that both Peesa and Peesca receive bipartisan support and provide for mandatory sanctions. “That means the sanctions will be enforced regardless of who is in the Oval Office.”
Sassnitz-Mukran: Pipelines for the Nord Stream 2 Baltic Sea gas pipeline are stored on the harbor site. (Source: dpa)
The action in Washington is facing headwinds from German politics. “The hard work and threats of sanctions from representatives of the US government are totally inappropriate in tone and in the matter,” said SPD deputy chairman Achim Post. “The energy supply of Germany and Europe is not decided in Washington or Moscow, but in Berlin and Brussels.” It is now important to seek an exchange with the new US administration as early as possible to avoid further escalation.
Biden sees a bad deal for Europe
The new US president will be sworn in on January 20. After the November 3 election, Democrat Joe Biden was declared the winner. Trump has so far refused to admit defeat. Trump is a bitter opponent of Nord Stream 2. Biden is also critical of the project. In his previous role as US Vice President under Barack Obama, Biden had called the pipeline “a fundamentally bad deal for Europe.”
Independent of Congress, the US government extended the Caatsa Sanctions Act (“Opponents of US Opponents through Sanctions”) to Nord Stream 2 last July. It allows the US President to sanction “in conjunction with allies of the United States” to impose on persons or companies investing in or contributing to the construction, modernization or repair of Russian pipelines. At the time, US Secretary of State Mike Pompeo spoke with a clear warning to companies assisting in projects that increased Russia’s “evil influence”.