EC 'Satisfied' with US Sanctions Law
US president Donald Trump August 2 enacted the law on stricter sanctions on Russia, despite his objections to the way it limits his ability to change it afterwards. The vast majority that the act had won from both parties, however, meant he could not veto it.
It has been softened in some respects since the earlier versions were circulated, following objections from the president of the European Commission Jean-Claude Juncker, who said August 2 that he was satisfied, "in principle."
"I stated at the G7 summit in Taormina, Italy, and at the G20 summit in Hamburg, Germany, that if the Americans proceeded [with the adoption of new sanctions], we would be ready to react adequately in a matter of days. As a result, a significant proportion of the intended sanctions against Russia have been dropped. Moreover, the US Congress has now also committed to only apply sanctions after the country's allies are consulted. And I do believe we are still allies of the US," he said.
If the US sanctions specifically disadvantage EU companies trading with Russia in the energy sector the EU is prepared to take appropriate steps in response within days, he told a radio interview. "We must defend our economic interests vis-à-vis the US. And we will do that."
The EU is maintaining its own sanctions against Russia. However, in order to fully implement the Minsk Agreements, the G7 must unanimously agree on the sanctions, with close co-operation between the allies, he said. The US bill could have an unintended impact on EU interests relating to energy supply security. The sanctions would affect energy transport and the maintenance of pipeline systems in Russia which supply the Ukrainian gas transit system. The new US sanctions could also impact EU efforts to further diversify the energy sector, particularly in the Baltic, he said.
The law also covers sanctions on Iran, but this was of less concern to the EC than the possible effect of the law on Russia, which supplies about a third of the bloc's gas. Five European energy companies are investing almost €1bn ($1.2bn) each in Gazprom's Nord Stream 2 pipeline project, the second, 55bn m³/yr line that brings gas directly from Russia to Germany, under the Baltic Sea.
On August 1, BP CEO Bob Dudley said he had been reassured that the language of the sanctions bill had been changed to avoid "unintended consequences" such as targeting its Shah Deniz 2 development in Azerbaijan. Shell CEO Ben van Beurden had said last week that his company was committed to continuing with its co-financing of the Gazprom-led Nord Stream 2 gas pipeline project and had Dutch government approval to do so.
William Powell