US threatens secondary sanctions relating to Nord Stream 2
US threatens secondary sanctions over the European Nord Stream 2 pipeline. Foreign parties involved in the construction could be subject to future US sanctions.
The Nord Stream 2 pipeline, currently under construction and led by Russian state company Gazprom, intends to ship Russian natural gas from Russia across the Baltic Sea to Germany and into the EU's internal market. The US views the pipeline as a Russian foreign policy tool and has long opposed its existence.
On 12 June 2019 at a White House press conference, President Trump threatened US sanctions to derail the construction of the Nord Stream 2. President Trump remarked at that Nord Stream 2 “really makes Germany a hostage of Russia if things ever happen that were bad” and directly stated that the Administration is "looking at" imposingsanctions to bring the pipeline to a halt. Previously, on 21 May 2019, US Energy Secretary Rick Perry was on his side cited by Reuters as saying: "The United States Senate is going to pass a bill, the House is going to approve it, and it’s going to go to the President and he’s going to sign it, that is going to put sanctions on Nord Stream 2."
On 14 May 2019, four Senators indeed introduced to the Senate a bill – Protecting Europe’s Energy Security Act of 2019 ("S. 1441") – that would impose sanctions on the provision of certain vessels used in the construction of Russian energy export pipelines, including Nord Stream 2. On 11 June 2019, two Congressmen introduced a same-named and highly similar bill – Protecting Europe's Energy Security Act of 2019 ("H.R. 3206") – to the House of Representatives.
In short, S. 1441 and H.R. 3206 would both entail secondary sanctions over the Nord Stream 2, meaning that foreign persons involved in the pipe-laying process could be subject to such future US sanctions.
If approved, the S. 1441 and the H.R. 3206 would, in their current versions, inter alia, require the US President to impose asset freezes and visa bans on any foreign person who knowingly sells, leases, or provides pipe-laying vessels for the construction of Nord Stream 2. Potential sanctions targets are thus, for example, European vessels laying the pipeline and executives from companies associated with such vessels.
The rationale is to prevent the Russian government from using the Nord Stream 2 as "a tool of coercion and political leverage" and from making "European countries dependent on Russia for energy supplies, so as to increase this political leverage", according to the H.R. 3206.
Note that both the S. 1441 and the H.R 3206 have yet to pass all legislative bodies necessary to be signed into US law. The legislative timeline is unclear and amendments may be made.
WR Sanctions Alerts provide you with updates on material developments in the country-specific sanctions programs implemented by the US, the UN, the UK, the EU and Norway. We will not provide updates on mere prolongations, without material changes, of existing sanctions programs, nor on any listings or de-listings of individuals/entities placed on implemented sanctions lists . Please note that the WR Sanctions Alerts are provided as general information and do not constitute legal advice.