Germany Fears U.S. Sanctions Against Nord Stream 2 May Affect German Administration

The German government fears that new U.S. sanctions against the Nord Stream 2 project, if introduced, may for the first time affect German public administration, related to the project in one way or another, as well as German companies, the Frankfurter Allgemeine Zeitung newspaper reported on Friday, with reference to a Ministry of Economy document intended for internal use, TASS reported.

According to the ministry, new sanctions may be imposed on “all firms” that will provide insurance services, modernization of the pipeline network, or for example, retrofitting pipe-laying vessels.

“The same applies to the provision of services such as monitoring, inspection, and certification, which are necessary for the operation of Nord Stream 2,” the newspaper quotes an excerpt from the document.

The Ministry of Economy believes that the bill proposed by U.S. senators threatens to “authorize the administrative and technical actions of public services in connection with the completion or operation of the pipeline.”

“The situation when sanctions are directed, including against departments of friendly governments or even against the governments themselves, would be a completely new development,” the German Ministry of Economy emphasizes in the document. In any case, according to his assessment,” it should be assumed that the new proposals on sanctions make potential targets of many more German and European companies.”

On June 4, US Senators Ted Cruise (Republican from Texas), Gene Shahin (Democrat from New Hampshire), Tom Cotton (Republican from Arkansas), Ron Johnson (Republican from Wisconsin) and John Barrasso (Republican from Wyoming) submitted to the US Senate a bill to expand sanctions on the Nord Stream 2 gas pipeline.

As TASS was told by the head of the Bundestag committee (German parliament) on economics and energy, Klaus Ernst, Germany, and the EU should consider a response to the U.S. plans to expand sanctions against Nord Stream 2. According to Ernst, “U.S. actions in this matter no longer need to be understood as an act of friendship, but they constitute interference in the sovereignty of Germany and the EU.”

The Nord Stream 2 project contemplates the construction of two gas pipeline strings with a total capacity of 55 bln cubic meters per year from Russia to Germany across the Baltic Sea. The gas pipeline is 93% complete to date. The halt in December 2019 had to do with the sanctions imposed upon the Switzerland-based Allseas, pipe-laying company.

“In anticipation of the enactment of the National Defense Authorization Act (NDAA), Allseas has suspended its Nord Stream 2 pipelay activities. Allseas will proceed, consistent with the legislation’s wind-down provision and expect guidance comprising of the necessary regulatory, technical, and environmental clarifications from the relevant U.S. authority,” the company said.

It was reported that sanctions against the Nord Stream 2 and TurkStream gas pipelines, included in the military budget for the 2020 fiscal year signed by U.S. President Donald Trump (began on October 1), came into force.

Russian presidential spokesman Dmitry Peskov said in December that U.S. sanctions against Nord Stream 2 violate international law and present a perfect example of unfair competition.

“Such actions [possible U.S. sanctions] are a direct violation of international law, they present an ideal example of unfair competition and spread their artificial dominance in European markets, imposing more expensive and uncompetitive products on European consumers – more expensive natural gas,” he told reporters.

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