US warns firms about sanctions for work on Russian pipelines

Updated 16 Jul 2020

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In this April 9, 2010 file photo, a Russian construction worker speaks on a mobile phone in Portovaya Bay some 170 kms  north-west from St. Petersburg, Russia, during a ceremony marking the start of Nord Stream pipeline construction. — AP
In this April 9, 2010 file photo, a Russian construction worker speaks on a mobile phone in Portovaya Bay some 170 kms north-west from St. Petersburg, Russia, during a ceremony marking the start of Nord Stream pipeline construction. — AP

WASHINGTON: The Trump administration on Wednesday hardened its efforts to prevent the completion of new German-Russian and Turkish-Russian natural gas pipelines by warning companies involved in the projects they’ll be subject to US penalties unless they halt their work.

The move will likely increase tensions in already fraught US-European ties as well as anger Russia.

Secretary of State Mike Pompeo announced the administration is ending grandfather clauses that had spared firms previously involved in the pipelines’ construction from sanctions authorised by the Countering America’s Adversaries Through Sanctions Act, a 2017 law aimed at punishing Russia, in particular, for interference in US elections and other matters.

The move opens the door for US economic and financial penalties to be imposed on any European or other foreign company over the Nord Stream 2 and TurkStream projects, including those that had been working on the pipelines before the passage of CAATSA and had been previously exempted from the penalties.

This action puts investments or other activities that are related to these Russian energy export pipelines at risk of US sanctions, Pompeo told reporters at a State Department news conference. Its a clear warning to companies. Aiding and abetting Russia’s malign influence projects will not be tolerated. Get out now or risk the consequences.

Pompeo took aim at the pipeline projects, calling them the Kremlin’s key tools to exploit and expand European dependence on Russian energy supplies that ultimately undermine transatlantic security.

He noted that the United States, which has ramped up its own energy production under President Donald Trump, is always ready to help our European friends meet their energy needs. The US has already begun exporting gas, and some coal, to central and eastern European nations like Belarus, Poland and Ukraine.

The Trump administration has lobbied Europe, particularly Germany, to abandon the pipelines, which it believes put Europe under greater influence from Russia, which has used its energy exports as political leverage. Wednesday’s step comes as Congress advances legislation that would mandate the imposition of sanctions that had been authorised by CAATSA.

Published in Dawn, July 16th, 2020