January 15, 2021

Earlier this month on Jan. 1 the US Senate voted to override President Donald Trump’s veto of the fiscal year 2021 National Defense Authorization Act (NDAA). The NDAA, among other provisions, includes a fresh package of sanctions on actors involved in the construction of the Nord Stream 2, Kremlin’s darling child.

Nord Stream 2 is highly criticised because it has no economic rationale, undermines the stability of the European gas market and makes Europe more dependent on Russia’s gas.

In December 2018, the European Parliament voted “Yes” to condemn Nord Stream 2 as a political project posing a threat to European energy security, calling for cancellation of the controversial project. Despite this fact, German Chancellor Angela Merkel has kept defending the project, probably still hoping to hit pay dirt from this project.

As history has shown European initiatives to block the pipeline were vain efforts, but measures taken by the United States proved far more effective. In late 2019, US sanctions finally brought construction work on the pipeline to a halt.

Russia in its peculiar manner refused to give up, and spent 2020 trying to bypass US sanctions and complete works over the pipeline and fighting back.

In July 2020, the United States promised further measures. US Senator Ted Cruz, co-sponsor of the original sanctions package, promised to include a second set of deterrents in the 2020 NDAA.

A long way passed

The NDAA has passed a long way. The complications of the US political system and domestic political battles have become obstacles in this long journey. In fall 2020, a proposed set of additional Nord Stream 2 sanctions received overwhelming bipartisan support in Congress and was included in the NDAA for consideration in December. In mid-December, both the House and Senate gave final approval, but President Trump then vetoed it. The situation finally changed on January 1, 2021. The lawmakers have amassed the two-thirds majority needed in each chamber to overturn the president’s veto.

This time sanctions target companies that provide insurance cover, services for testing, inspection and certification necessary for completion of the project.

The targeted companies will have to wind down involvement in the pipeline project until 31 January to avoid the full force of the sanctions.

These ruinous US sanctions are a particularly rough blow for Putin because it may deep-six his “gas baby” that is almost completed. If a pipeline is 90 percent finished, that is not saying much. So it may well happen that Nord Stream 2 will be only Nord Dream 2 for Moscow.

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