US warns firms about sanctions for work on Russian pipelines

Politics

FILE – In this April 9, 2010 file photo, a Russian construction worker speaks on a mobile phone in Portovaya Bay some 170 kms (106 miles) north-west from St. Petersburg, Russia, during a ceremony marking the start of Nord Stream pipeline construction. The Trump administration is hardening its efforts to prevent the completion of a new German-Russian natural-gas pipeline by warning all companies involved in the project they’ll be subject to U.S. sanctions. Secretary of State Mike Pompeo announced Wednesday the administration is ending grandfather clauses that had exempted firms previously involved in the pipeline’s construction from sanctions. The move opens the door for U.S. economic and financial penalties to be imposed on any European and other foreign company for work on Nord Stream 2. (AP Photo/Dmitry Lovetsky, file)

WASHINGTON (AP) — 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 U.S. penalties unless they halt their work. The move will likely increase tensions in already fraught U.S.-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 authorized by the Countering America’s Adversaries Through Sanctions Act, a 2017 law aimed at punishing Russia, in particular, for interference in U.S. elections and other matters.

The move opens the door for U.S. 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 U.S. sanctions,” Pompeo told reporters at a State Department news conference. “It’s 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 U.S. 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 authorized by CAATSA.

The Senate has already unanimously included mandatory Nord Stream 2 sanctions in its version of the new National Defense Authorization Act and the House is expected to follow suit. Sen. Ted Cruz, R-Texas, who co-authored the Senate measure with Sen. Jeanne Shaheen, D-N.H., said Wednesday’s announcement along with the pending legislation “should serve as a reminder that any person or company that facilitates in any way pipe-laying for Nord Stream 2 will face the full force of U.S. sanctions.”

Pompeo said he would raise the matter on a brief trip to Europe next week when he plans to visit Britain and Denmark. Denmark last year lifted environmental objections to a portion of the Nord Stream 2 pipeline, allowing for work to start on its completion.

The U.S. has been an outspoken opponent of the Nord Stream 2 pipeline, which would transport natural gas about 750 miles (1,200 kilometers) under the Baltic Sea from Russia to Germany. Along with eastern European countries that also oppose the project, the U.S. government argues that it will make Europe dangerously dependent on Russia.

Already the threat of U.S. sanctions has led one company that had not been covered by the grandfather clause to suspend its work on the pipeline. Late last year, the Swiss firm Allseas, which operated ships laying sections of the undersea pipeline, said it was halting work in anticipation of sanctions.

Nord Stream 2 is owned by Russia’s Gazprom, with investment from several European companies. The German government has said it regrets the threat of sanctions and considers them interference in the country’s domestic affairs. However, Chancellor Angela Merkel made it clear last week that Germany isn’t considering retaliation against the sanctions.

Russia has said it is, however, considering retaliatory measures. Pompeo spoke to Russian Foreign Minister Sergey Lavrov on Monday, and Trump spoke to Turkey’s president on Tuesday, but there was no indication that the pipelines had been discussed.

With TurkStream, Russian gas passes through the Black Sea to Turkey. Together, the two 578-mile (930-kilometer) TurkStream lines under the Black Sea, along with the Russian and Turkish onshore pipes, have the capacity to carry 31.5 billion cubic meters (1.1 trillion cubic feet) of natural gas annually. Wednesday’s sanctions threat applies to the second TurkStream line.

This story has been corrected to fix the last names of Sens. Ted Cruz and Jeanne Shaheen.

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