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New U.S. Sanctions Could Hit Russo-German Pipeline Project

White House reportedly working to defang Senate bill that would limit Trump’s powers to ease sanctions.

19 June 2017

A move by U.S. lawmakers to impose new sanctions on Russia and give U.S. authorities the power to fine European companies that do business with Russia could open a rift between Washington and key European ally Germany.

 

That is, if President Donald Trump eventually signs the law, which could curb his powers to ease sanctions.

 

As RFE/RL reports, the U.S. Senate voted by an overwhelming 98 to 2 margin 15 June for new sanctions on Russia and to enshrine into law sanctions earlier proclaimed by order of President Barack Obama (pictured). The sanctions were originally imposed in retaliation for Russia’s interventions in Ukraine and extended because of Moscow’s alleged attempts to influence the U.S. presidential election.

 

If passed by the House of Representatives and signed by Trump, the legislation would allow new sanctions on Russian industry and also target Russians responsible for conducting cyberattacks and supplying weapons to Syria’s government.

 

Germany and Austria complained, saying European companies doing business with Russia could be exposed to fines, EurActiv says, possibly including companies involved in the controversial Nord Stream 2 gas pipeline project.

 

Russia’s Gazprom is the lead partner in the proposed pipeline designed to send Russian gas directly to Germany under the North Sea. Its partners include French, Austrian, and German companies and Anglo-Dutch Shell Oil, Forbes contributor Kenneth Rapoza writes.

 

The bill declares that the Senate is "opposed" to Nord Stream 2 "given its detrimental impacts on the European Union's energy security, gas market development in Central and Eastern Europe, and energy reforms in Ukraine."

 

Gazprom is keen on the project, which would parallel the existing Nord Stream 1, as a way to bypass Ukraine, through which most European-bound Russian gas flows, EurActiv says.

 

The European Commission is trying to find common ground between countries favoring the pipeline and the mostly Central and Eastern European ones  suspicious of Russia’s growing role in the EU’s energy mix.

 

German Chancellor Angela Merkel said on Thursday that the Commission did not need to take a larger role in settling the dispute.

 

"I think some legal questions need to be clarified in relation to Nord Stream 2," Reuters reported Merkel as saying. "Otherwise it is an economic project and I don't think we need an extra mandate for it."

 

 

  • A high-ranking Gazprom official said the proposed new sanctions are really aimed at boosting U.S. exports of liquefied natural gas (LNG) to Europe.

 

  • The U.S., Norway and other LNG producers are potential suppliers to new LNG facilities in Lithuania and Poland.

 

  • The White House, concerned that the sanctions bill would tie its hand on relations with Moscow, plans to work with House Republicans to water down the Senate version, Politico writes.

Compiled by Ky Krauthamer

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