Trump veto delays Nord Stream 2 sanctions

New US measures designed to derail completion of the Nord Stream 2 pipeline from Russia to Germany will not go into effect until after 29 December as President Donald Trump vetoed the broader legislation of which the sanctions formed part.

The proposed sanctions would narrowly target companies building the offshore portion of the near-complete 55bn m³/yr Nord Stream 2, as well as entities that provide underwriting and insurance to pipe-laying vessels and facilitate ship retrofitting and upgrading. The sanctions also could apply to any entity that "provided services for the testing, inspection or certification" of the pipeline.

The penalties were part of a Defense Department spending authorization bill passed by Congress in early December that Trump vetoed today, citing grievances over the legal treatment of large US technology firms, renaming of US military installations that are currently named for Confederate generals and other complaints.

The majority-Democratic House of Representatives already scheduled a vote on 28 December to override the veto, and the Republican-controlled Senate will meet the following day to do so as well. Both chambers passed the defense bill with a veto-proof majority and their leaders say they expect to garner a sufficiently large majority again.

The portion related to Nord Stream 2 was not directly cited by Trump. The bill would grant the White House flexibility to waive sanctions on national security grounds, while also exempting European government entities from sanctions and requiring consultations with those governments before sanctions are applied.

The date when the sanctions go into effect — likely 29 December — would set off a 30 day period to wind down participation in the pipeline project. The Russian-flagged Fortuna pipe-laying barge restarted pipe-laying in German waters earlier this month and is to restart works in Danish waters from mid-January, with support from the Baltic Explorer and Murman, as well as other supply vessels.

While construction restarted on the Nord Stream 2 pipeline, the new bill will create an "immediate liability" for the participants and force them to leave the project, according to one of the authors of the sanctions bill, senator Ted Cruz (R-Texas).

The bill's focus on entities certifying the pipeline is one of the reasons the project is likely to be derailed, Cruz told a virtual audience last week at Washington-based think tank Atlantic Council.

"Under the terms of the permits that have been granted, third party certification is required," Cruz said. "And this is designed to be surgical to make clear this project will not be completed."

Around 16.5km on each of the project's two strings need to be installed in German waters, and a total of 127km in Danish waters before pipe-laying is complete.

Despite Cruz' remarks, the potential sanctions liability is not immediate and can be waived by the executive branch under the new law. But opponents of the Nord Stream 2 project hope that the State Department will take immediate action to enforce its previous guidance that threatened sanctions against foreign companies providing goods and services for pipe-laying vessels and against financial backers of the pipeline.

Implementing the legislation is likely to straddle the final weeks of Trump's term in office, which ends on 20 January, and the incoming administration led by president-elect Joe Biden.

The Biden team has vowed a tougher approach to Russia without talking about targeting Nord Stream 2 specifically — implementing sanctions against the project contradicts the president-elect's pledge to improve relations with the EU.

But political opinion in Washington is again turning against Russia, this time over an alleged cyberattack against computer networks run by the US government. Moscow denies involvement, and Trump said he doubted Russia was involved, contradicting statements by US secretary of state Mike Pompeo and attorney general Bill Barr.

"We cannot let this go unanswered," Biden said yesterday. "It certainly fits Russia's long history of reckless and disruptive cyber activities, but the Trump administration needs to make an official attribution."

By Haik Gugarats