The US government is drawing up additional sanctions to target insurance firms in the latest controversy for the Nord Stream 2 Baltic pipeline.
Photo: Gerd Fahrenhorst
Nord Stream 2 has less than 100km of pipeline remaining.
The project, which has seen production halted for almost a year, has been a source for souring tensions between the EU and US since its inception in 2015.
Three weeks ago, Washington revealed its intention to impose tougher tariffs on companies equipping the pipeline - which has less than 100km of pipeline left to be laid - in an attempt to hinder its completion.
The Trump administration began ramping up sanctions back in July, fearing that it will make Europe, and particularly Germany, too reliant on an unreliable foreign neighbour for its energy needs.
EU officials have been back-and-forth on the project, with rumours circulating back in September about Berlin potentially pulling the plug on the project entirely.
A recent Bundestag report ruled in favour of the US, saying their sanctions were not in breach of international law, despite rulings to the contrary by the European Commission.
US Senate and House officials agreed to target insurance and technical certification companies working on the project in a defence bill that must go through before the new year.
Detractors worry the new sanctions could cause further friction between the two parties, which has already been worsened by Washington's previous sanctions over the pipeline, as well as the ongoing fued between Airbus and Boeing.
The new bill has been specifically-engineered to target certifiers in a bid to prevent Russian state-owned energy provider Gazprom from completing the project.
The planned route for the pipeline is for it to extend for 2,460km alongside the existing Nord Stream Baltic pipeline.
Nord Stream 2 map
The initial map for the Nord Stream 2 pipeline.
The existing sanctions caused a major vessel to remove itself from the pipeline production, causing Gazprom to instigate the Akademik Cherskiy as an imprompu replacement. It is currently docked in the Russian enclave of Kaliningrad.
The new sanctions against certifiers may also affect other countries from making use of the pipeline.
The Danish government requires Det Norske Veritas to certify compliance from Nord Stream 2 before the nation will make use of it, according to Mitch Jennings, an analyst at the Moscow-based British firm Sova Capital.
In an interview with Bloomberg, Jennings said: “According to my understanding, if the pipeline certification is restricted, the launch of the pipeline may become very difficult.
"The new sanctions might require Nord Stream 2 AG to find a certification agency that is willing to be subject to sanctions.”
Fears are currently in place for a further escalation of events before Trump leaves office in January.
It is currently not known whether President-elect Joe Biden will reduce sanctions on companies involved in both Nord Stream 2 and lift sanctions on companies involved in the Boeing-Airbus feud.
The European Commission has enacted further sanctions against the US, which were delayed slightly by the recent presidential election.
The EC stood by its decision to impose sanctions on the US with no mutual settlements for the situation presenting themselves.
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