House and Senate pass NDAA bills that include expanded U.S. sanctions on Nord Stream 2 pipeline construction and State Department expands CAATSA Section 232 guidance on export energy pipelines
On July 23, 2020, the U.S. Senate passed its version of the National Defense Authorization Act for fiscal year 2021 (NDAA) which includes an amendment that expands sanctions in connection with the Nord Stream 2 and TurkStream pipeline projects. The amendment is based on a bill previously introduced by Senators Ted Cruz (R-TX) and Jeanne Shaheen (D-NH) entitled, the “Protecting Europe’s Energy Security Clarification Act of 2020”, which sought to clarify and expand existing U.S. sanctions under the Protecting Europe’s Energy Security Act of 2019.
Last year, the Protecting Europe’s Energy Security Act of 2019, enacted as part of the National Defense Authorization Act (NDAA) of 2020, implemented sanctions targeted at Allseas, the Swiss-Dutch company that had been laying the Nord Stream 2 pipeline. Shortly after the NDAA was enacted in December 2019, the company suspended its activities, leaving six percent or around 100 miles (160 km) of pipeline to be completed. Reports indicate that Russia has taken steps to continue construction of the pipeline, prompting Members of Congress to take further action. The House passed its version of the FY 2021 NDAA with a similar amendment introduced by Rep. Ruben Gallego (D-AZ) on July 21.