Ukraine hails, Russia condemns new US sanctions on Nord Stream 2

Outgoing US President Donald Trump has delivered his final blow  to Russia’s Nord Stream 2 natural gas pipeline to Germany, with newly announced sanctions paralyzing a pipe-laying vessel and companies involved in the controversial project.

“Nord Stream 2, if completed, would give Russia the means to completely bypass Ukraine, depriving Ukraine of vital revenues and opening it up to further Russian aggressive actions, while providing the means to use natural resources as a tool of political pressure and malign influence against western Europe,” said the US Department of State in its announcement.

The new measures come after the US Congress overrode President Trump’s veto of the National Defense Authorization Act (NDAA) on New Year’s Eve, requiring foreign entities to wind down involvement in the pipeline project by 31 January to avoid the full force of the sanctions.

The US authorities expect almost all of the dozens of small to large foreign contractors to jump the ship during January to avoid being punished by the tough sanctions. There have been reports of foreign firms quitting the project.

Ukraine’s Foreign Ministry welcomed new U.S. sanctions against the project, saying “we will continue working closely together with our strategic partner U.S. to protect the energy independence of Ukraine & entire Europe”.  Russia’s ambassador to the US  Anatoly Antonov accused Washington of violating international law and going “beyond the bounds of decency in an attempt to achieve its narrowly opportunistic goals”.  Kremlin spokesman Dmitry Peskov lamented what he described as “brutal and illegitimate US pressure” but vowed Russia will “continue the works for the completion of this project.”

Russian state gas company Gazprom acknowledged the risk to its shareholders on Tuesday that the project could be suspended or cancelled because of becoming “impossible or unfeasible” after tougher sanctions.

The almost-complete $11.5 billion, 1,225-km Nord Stream 2 project is seen by the US as a serious geopolitical risk unnecessarily increasing Europe’s reliance on Russia, sidelining traditional transit states of eastern Europe, and enriching Kremlin-controlled Gazprom, at a time when Moscow stands accused of undermining European security and stability.

The US$740.5 billion defense policy bill, among other important provisions, were internationally watched for its targeting of Russia for its recent malicious cyber activity and controversial gas pipeline to the western Europe.

Previous year’s NDAA already included sanctions against foreign vessels and company executives involved in the project. The measures were later credited for bringing work on the pipeline to a halt.

This time, the provisions go further, targeting companies that provide insurance cover, or services for testing, inspection and the certification necessary for completion of the project.

The European Commission also opposes the Nord Stream 2 project but says there are no legal grounds to prevent the private investment from going ahead.

The US also has other sets of sanctions in place for Russian companies and foreign companies involved in Russian energy exploration over Moscow’s illegal annexation of Crimea and direct involvement in violence and destabilizing actions in eastern Ukraine.