New Sanctions Targeting Russia-Germany Gas Pipeline Included in Defense Policy Bill

Patrick Goodenough | July 1, 2020 | 4:25am EDT
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A worker on the Nord Stream 2 gas pipeline’s sector in northeastern Germany. (Photo by Tobias Schwarz/AFP via Getty Images)
A worker on the Nord Stream 2 gas pipeline’s sector in northeastern Germany. (Photo by Tobias Schwarz/AFP via Getty Images)

( – Bipartisan legislation designed to block completion of a controversial gas pipeline from Russia to Western Europe has been inserted into a new defense policy bill.

President Trump has repeatedly criticized the project in his interaction with NATO allies, particularly Germany.

The legislation added to the National Defense Authorization Act for fiscal year 2021 aims to strengthen and expand sanctions included in last year’s NDAA, which were credited for halting work on the Nord Stream 2 pipeline after Trump signed the FY 2020 measure into law last December.

Like last year’s provision, the new legislation is sponsored by Senate Foreign Relations Committee members Ted Cruz (R-Texas) and Jeanne Shaheen (D-N.H.)

“These bipartisan sanctions will help stop Putin’s pipeline project, which, if completed, would reward Russian expansionism & economic blackmail, hold our European allies’ energy security hostage to Russia undermine U.S. national security,” Cruz communications director Lauren Blair Aronson tweeted on Tuesday.

Nord Stream 2, a $11 billion project led Russia’s state-controlled gas giant Gazprom to pipe natural gas from Russia to Germany under the Baltic Sea, is projected to double the annual supply from an existing pipeline, Nord Stream 1, to 110 billion cubic meters.

The new 760-mile pipeline, originally due to go operational in the first half of 2020, is currently around 93 percent complete, according to Russian reports.

Critics of the project, both in the U.S. and in Europe, worry that it will benefit the Kremlin by increasing Europe’s energy dependence on a government with a track record of using its energy supplies as leverage in political disputes.

It will also enable Russia to bypass or reduce use of existing pipelines through Ukraine, which earns badly-needed transit fee revenue for supplies moving through its territory from Russia to Europe.

Trump has repeatedly raised the issue when criticizing some NATO allies over their defense spending obligations, asking why the U.S. should be expected to help defend Germany from Russia while Germany’s does lucrative energy deals with Russia.

He did so again when confirming plans last week to reduce U.S. troop numbers in Germany, and move some to Poland.

“What’s that all about?” Trump asked. “You're spending billions of dollars to Russia, then we're supposed to defend you from Russia?

Last year’s NDAA included provisions targeting for sanctions foreign vessels and company executives involved in building the Nord Stream 2 project.

After Trump signed it into law, construction work came to a halt. Cruz and colleagues had directly warned a European company whose vessels were laying the pipe on the Baltic seabed that if continued work for “even a single day” after the signing, it would expose itself to severe sanctions, including a block of its assets in the U.S. and visa denials for company executives.

Early this month Cruz and Shaheen introduced new legislation, clarifying that U.S. sanctions apply to all pipelaying activities, to those who provide insurance or port facilities to pipelaying vessels, and to those who will provide certification for the pipeline to begin operations.

“[Russian President Vladimir] Putin continues to try to circumvent those [earlier] sanctions, and so this new bill will once and for all clarify that those involved in any way with installing pipeline for the project will face crippling and immediate American sanctions,” Cruz said.

Shaheen said that despite some skepticism about the value of the original sanctions legislation, they were “tremendously effective at thwarting the completion of the Nord Stream 2 pipeline.”

“We must now continue that effort and ensure that Russia does not surreptitiously extend its malign influence throughout Europe,” she said.

A companion bill has been introduced in the House.

Russia’s foreign ministry in response said the threatened sanctions would directly hit the German economy, and that “a response to them, whether at the national or the pan-European level, is certainly a sovereign decision of Berlin and the European Union countries.”

For its part, the German foreign ministry said any new sanctions would “constitute a serious interference in European energy security and E.U. sovereignty.”

European Union foreign policy chief Josep Borrell said in response to questions from an E.U. lawmaker that a “mechanism” was being prepared to protect European companies involved in the project against U.S. sanctions.

Despite the E.U.’s stance, the European Parliament has voted twice in opposition to Nord Stream 2.

It did so in December 2018, in a 433-105 vote, describing the pipeline as “a political project that poses a threat to European energy security and efforts to diversify European energy supplies.”

Again last March, the parliament called for the project’s cancelation, in a 402-163 vote.

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