October 21, 2020

US provides guidance related to sanctioned activities supporting Russian pipeline projects in Europe

On October 20, 2020, the US Department of State announced a commitment to impose sanctions pursuant to the Protecting Europe’s Energy Security Act of 2019 (PEESA), which provides the US with authority to address Russian pipeline projects that create European and US national security risks.  In support of these sanctions, the State Department has released public guidance in the form of Frequently Asked Questions to address the provisions of the Act and clarify the types of activities that will be sanctioned under the Act. 

In accordance with PEESA, the US has called on Russia to stop energy export pipeline projects geared towards certain European countries and intended to create a dependence on Russian energy.  Under PEESA Section 7503, the Secretary of State, in consultation with the Secretary of the Treasury, must submit a report to Congress identifying vessels that are engaged in pipe-laying at depths of 100 feet or more below sea level for Russia’s Nord Stream 2 pipeline project or TurkStream pipeline project; and identifying any foreign person or entity that has knowingly provided or facilitated the provision of vessels for use on these pipelines or similar construction projects.  

According to the State Department’s Frequently Asked Questions, sanctions will not apply to persons or entities that provide vessels intended for maintenance, the avoidance of environmental or other damage, or for the safety and care of the crew, in accordance with section 7503(e)(3) of PEESA.  Sanctions will also not apply to persons who perform repair or environmental remediation on the Nord Stream 2, TurkStream, or any similar or successor project, pursuant to section 7503(e)(4) of PEESA.  Furthermore, any person or entity that is identified, on or after October 20, 2020,  by the Secretary of State as providing sanctionable support under Section 7503, will not be sanctioned if the person/entity immediately engages in and completes within 30 days, a good-faith wind-down of such activities.

US State Department’s PEESA Guidance