US envoy defends Nord Stream 2 sanctions as ‘pro-European’

US envoy defends Nord Stream 2 sanctions as ‘pro-European’

Pipeline contractor forced to down tools as Berlin accuses Washington of ‘interference’

The US ambassador to Berlin has defended US sanctions against the Nord Stream 2 pipeline designed to supply the EU with Russian gas as “extremely pro-European”, but Berlin condemned the legislation as “interference” in its internal affairs and Moscow threatened to “respond.”

Richard Grenell was speaking as Allseas, the Swiss company that is Nord Stream’s main contractor, said it had suspended work on laying the pipeline.

A vocal champion of Donald Trump’s policies, Mr Grenell said: “There are 15 countries, plus the European Commission, plus the European Parliament, that have all voiced concern about the project.”

He said he had been “hearing from European diplomats all day today thanking me for taking such action”, adding that the sanctions, which were signed into law by Mr Trump on Friday, were “an extremely pro-European position”. The US was “very pleased” that Allseas had decided to comply with the sanctions, he added.

Nord Stream 2 is a €9.5bn pipeline that would bring natural gas directly from Russia to Germany via the Baltic Sea. Mr Trump has frequently spoken out against the project, saying it would increase Germany’s reliance on Russian gas and so turn Europe’s largest economy into a “captive” of Russia.

The punitive measures threaten a further deterioration in relations between Berlin and Washington, already damaged by Mr Trump’s constant attacks on Germany’s trade surplus and its failure to meet Nato targets on defence spending.

German finance minister Olaf Scholz described the legislation as “serious interference in Germany and Europe’s internal affairs and our own sovereignty”. “We object to them in the strongest terms,” he told the German TV channel ARD.

Such measures were “incomprehensible and improper for friends that are also linked by our common membership of Nato”, he added.

Russian foreign minister Sergei Lavrov on Sunday warned that Russia would respond to the measures with steps that would not also harm the Russian economy, without elaborating.

Mr Grenell insisted that Mr Trump was merely pursuing a longstanding US goal, noting that the Obama administration had also been opposed to Nord Stream 2.

“The US policy is for European diversification and making sure that there are multiple sources [of energy],” he said. Washington wanted to prevent a situation arising where “one country or source has the ability to create undue leverage over Europe.”

Critics have said the line will allow Gazprom, Russia’s Kremlin-controlled gas export monopoly, to bypass Ukraine, potentially depriving Kyiv of billions of dollars in transit fees, and weakening the country in its long-running military and political confrontation with Russia.

However, that risk receded last week after Moscow and Kyiv concluded a landmark agreement that would ensure Russian gas continues to transit through Ukraine even after Nord Stream 2 is completed. Germany played a critical role in brokering the agreement and pressuring Russia to maintain Ukraine’s transit status.

The US sanctions, part of the National Defense Authorization Act for 2020, mandate Mr Trump to punish companies involved in providing “vessels for the installation of deep-sea pipeline for the Nord Stream 2 project”.

US senators Ted Cruz and Ron Johnson, two architects of the sanctions, had earlier written to Allseas chief executive Edward Heerema calling for an immediate halt to its work.

“We understand that Russia is paying Allseas a very substantial amount of money to complete the Nord Stream 2 pipeline,” they wrote. But they warned that continuing the work “for even a single day” would expose the contractor to “crushing and potentially fatal legal and economic sanctions”.

Mr Lavrov on Sunday vowed that the pipeline — and a similar project to pipe gas to Turkey also affected by the sanctions — would be launched regardless of the US decision.

“Europeans understand their commercial interest,” he said. “An interest from the standpoint of providing long-term energy security.”

The measures mean that Allseas executives, employees and shareholders could face asset freezes and be denied entrance into the US.

Allseas said that it had suspended its pipe-laying activities for Nord Stream 2 and would proceed, consistent with the [sanctions’] wind-down provision. It said it expected “guidance comprising of the necessary regulatory, technical and environmental clarifications from the relevant US authority”.

Meanwhile, Nord Stream 2 itself insisted the pipeline would be completed, despite the sanctions. Some 2100km of pipe has been laid, with only 300km remaining. It said bringing the venture to a successful conclusion was “essential for European supply security”.

A spokesperson for Angela Merkel, the German chancellor, said she “regretted” the US move. “They affect German and European companies and represent interference in our internal affairs,” Ulrike Demmer said.

Sanctions against Nord Stream 2, which Washington justified as a means of protecting Ukraine’s interests, were “particularly hard to understand” in the light of the gas transit deal between Ukraine and Russia, she said.

On the other hand, Ukrainian officials suggested that Gazprom would never have come to terms with Kyiv had it not been for the effect of US sanctions. The legislation “reinforce[d] the talks that we’ve held with Russia on transit of gas to Europe and play a key role in preventing any monopolies in the EU energy market”, Oleksiy Honcharuk, Ukraine’s prime minister, tweeted on Saturday.

Echoing Mr Grenell, he said Ukraine’s rejection of Nord Stream 2 was shared by “many other EU countries, that for the past four years opposed the construction of this politically-motivated project”.

The European Commission is currently analysing the potential impact of these measures on European companies. The Commission’s objective has always been to ensure that Nord Stream II operates in a transparent and non-discriminatory way with the appropriate degree of regulatory oversight, in line with key principles of international and EU energy law.

 

Additional reporting by Nastassia Astrasheuskaya and Henry Foy in Moscow and Roman Olearchyk in Kyiv

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