U.S. warns German firms of potential sanctions over Russian pipeline

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BERLIN (Reuters) – The USA has warned German firms concerned within the Russian-led Nord Stream 2 fuel pipeline that they might face sanctions in the event that they stick to the challenge.

FILE PHOTO: U.S. Ambassador to Germany Richard Grenell arrives for a ceremony in Berlin, Germany, November 9, 2018. REUTERS/Fabrizio Bensch/File Picture

U.S. President Donald Trump has accused Germany of being a “captive” of Moscow due to its reliance on Russian power and urged it to halt work on the $11 billion fuel pipeline.

The pipeline, which might carry fuel straight to Germany below the Baltic Sea, has additionally been criticized in some quarters as a result of it could deprive Ukraine of profitable fuel transit charges, probably making Kiev extra weak sooner or later.

U.S. Ambassador Richard Grenell addressed the difficulty in a letter despatched to a number of firms, the U.S. Embassy mentioned on Sunday.

“The letter reminds that any firm working within the Russian power export pipeline sector is at risk below CAATSA of U.S. sanctions,” the embassy spokesman mentioned, including that different European states additionally opposed the deliberate pipeline.

Germany and European allies accuse Washington of utilizing its Countering America’s Adversaries Via Sanctions Act (CAATSA) to meddle of their overseas and power insurance policies.

Russian fuel large Gazprom (GAZP.MM) is implementing the challenge collectively with Western companions Uniper (UN01.DE), Wintershall (BASFn.DE), Engie (ENGIE.PA), OMV (OMVV.VI) and Shell (RDSa.AS).

The letter raised eyebrows inside Chancellor Angela Merkel’s authorities.

One German diplomat mentioned the ambassador’s method didn’t observe frequent diplomatic apply and that Berlin would deal with the difficulty in direct talks with officers in Washington.

‘UNACCEPTABLE THREATS’

Juergen Hardt, overseas coverage spokesman for Merkel’s conservatives in parliament, was scathing in his criticism of the U.S. transfer.

“That the U.S. ambassador is now turning to German firms with direct threats is a brand new and unacceptable one-sided tightening of the tone within the transatlantic relationship,” Hardt mentioned.

“If the U.S. president thinks he has to publicly present he’s getting robust on Russia in view of the various query marks relating to his relationship with Moscow, he mustn’t thereby impair the connection together with his most essential ally.”

There was no touch upon Sunday from the German firms concerned within the challenge. A Uniper spokesman declined to remark and Wintershall did reply instantly to a request for remark.

Germany and Russia have been at odds since Moscow annexed Crimea from Ukraine in 2014. Nonetheless, each have a standard curiosity within the Nord Stream 2 challenge, which is anticipated to double capability of the present Nord Stream 1 route.

German newspaper Bild am Sonntag, which was first to report information of the letter, mentioned that Grenell was attempting to blackmail German firms, drawing a pointy denial from the U.S. Embassy.

“The one factor that could possibly be thought of blackmail on this state of affairs could be the Kremlin having leverage over future fuel provides,” the embassy spokesman mentioned.

The letter was coordinated in Washington by a number of U.S. authorities companies and “shouldn’t be meant to be a menace however a transparent message of U.S. coverage”, the spokesman added.

German Overseas Minister Heiko Maas on Thursday mentioned that any U.S. sanctions towards Nord Stream 2 could be the flawed strategy to remedy the dispute and that questions of European power coverage needed to be determined in Europe, not in the US.

Extra reporting by Christina Amann and Tom Kaeckenhoff; Enhancing by Mark Heinrich and David Goodman