Veto and certification: what's happening to Nord Stream 2

On January 2, the U.S. Senate voted to pass the FY2021 defense budget, overcoming a veto by U.S. President Donald Trump. The document was approved by more than two-thirds of the members of the Upper Chamber. The House of Representatives also supported the budget by more than two-thirds, Kommersant writes.

The draft defense budget envisages expanding sanctions against Nord Stream 2. The restrictions will include companies that facilitate the "sale, lease or provision of pipe-laying vessels for the construction" of gas pipelines, as well as firms that provide services, funds for the modernization or installation of equipment on vessels for laying gas pipelines.

Nord Stream 2 AG noted that the new sanctions would impact Western contractors and investors and directly affect more than 120 companies from more than 12 countries. The European Commission spoke out against the introduction of new restrictions.

Nevertheless, the US Congress left a loophole to bypass the sanctions against Nord Stream 2. Sanctions cannot be imposed against EU government agencies, RBC reports.

According to the bill, after its entry into force, the United States will be able to impose sanctions against:

  • foreign persons, companies and their managers who provide services for “underwriting [assessment of insurance risks], insurance or reinsurance of ships” laying pipes for Nord Stream 2;
  • providers of services and facilities for "technological modernization or installation of welding equipment, modification or retrofitting of ships, the connection of ships [in tandems]";
  • service providers for "testing, inspection or certification", without which the pipeline cannot be put into operation.

The most dangerous are potential sanctions against organizations that will have to issue a final certificate of conformity to the gas pipeline after its construction.

And so it happened. On January 2, the Norwegian company DNV GL, which was supposed to certify the Nord Stream 2 gas pipeline upon completion of its construction, refused to provide this service due to new US sanctions on Nord Stream 2.

 “DNV GL will cease all inspection activities of the Nord Stream 2 pipeline system in accordance with the sanctions and as long as these sanctions remain in effect. We are implementing a plan to phase out our support for project validation, ”the company said in a statement.

“Due to the current situation, DNV GL is unable to issue a certificate upon completion of the pipeline,” DNV GL said.

Tags: gas, Nord Stream 2, USA, the US Senate

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