Trump Signs NDAA Into Law, Triggering Sanctions on Russia’s Nord Stream 2 Pipeline
December 21, 2019 02:01 GMT
WASHINGTON — President Donald Trump has signed into law the 2020 National Defense Authorization Act (NDAA), which contains a provision sanctioning Russia’s Nord Stream 2 pipeline.
Trump signed the legislation on December 20 at Joint Base Andrews in Maryland. The provision requires vessels laying the Russian pipeline to wind down their work “immediately” or face sanctions, including a freeze on U.S. assets for five years.
The $11-billion Nord Stream 2 project is just weeks away from completion and analysts have been divided on whether the imposition of sanctions at such a late stage will be able to halt the project.
Allseas Group, the Swiss-based company that is laying the last segments of the 1,230-kilometer pipeline, announced it has suspended its activities in anticipation of the enactment.
“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 US authority,” the company said in a statement.
Senators Ted Cruz (Republican-Texas) and Ron Johnson (Republican-Wisconsin), both members of the Senate Foreign Relations Committee, sent a letter to Allseas on December 19 warning it to stop its work on Nord Stream 2 immediately upon the NDAA becoming law or face sanctions.
Their letter followed a Bloomberg News report that Allseas could possibly finish laying the pipeline within the 30-day wind-down period stipulated by the legislation. Cruz and Johnson said that the month-long window is only valid if the company shows a “good faith effort” to halt operations.
“Rushing to finish the Nord Stream 2 project over that time would foreclose the possibility of that certification,” the letter said.
Cruz, the author of the sanctions legislation, said in September that he targeted the vessels because Russia doesn’t have the technology to lay deep-sea pipes. Allseas, which has worked extensively in the Gulf of Mexico, possesses some of the most advanced offshore, pipe-laying vessels in the world.
Russian Foreign Minister Sergei Lavrov said during a trip to Washington earlier this month that U.S. sanctions would not stop Moscow from completing the project. The U.S. has tried to block Russian energy pipeline projects in the past without any success.
Doubling Germany’s Imports
Nord Stream 2 has the capacity to deliver 55 billion cubic meters of gas annually to Germany, doubling the nation’s imports of Russian gas.
The United States has been opposed to the project, claiming it will deepen Europe’s dependence on Russian energy and give the Kremlin greater leverage over the nations of Eastern Europe while also boosting its coffers.
Nord Stream 2 would reroute Russian gas bound for Western Europe along the floor of the Baltic Sea.
The launch of Nord Stream 2 and TurkStream, which will carry gas from Russia to Southeastern Europe via an underwater pipeline to Turkey, would essentially end the Kremlin’s need to ship natural gas through Ukraine, depriving the country of as much as $3 billion in transit fees.
The U.S. and Europe have warned Russia against ending transit through Ukraine.
Russia has been seeking to reduce its dependence on Ukraine as a transit state for its natural gas exports amid tense relations with Kyiv over its political reorientation towards the West. Russia twice cut off gas to Ukraine amid disputes over pricing.
Just hours before Trump signed the NDAA, Russia and Ukraine announced they had finally reached a new gas transit agreement that will cover the next five years. The existing transit contract was set to expire on January 1, raising concerns of another gas cut off.
© UNIAN 2019