Today, the Department of State updated the public guidance for Section 232 of the Countering America’s Adversaries Through Sanctions Act (CAATSA), which allows for the imposition of sanctions on persons making certain investments or engaging in certain other activities with respect to Russian energy export pipelines. By updating the public guidance, the Department of State intends to clarify that our implementation of Section 232 will now include investments or other activities related to a broader scope of Russian energy export pipelines, including Nord Stream 2 and the second line of TurkStream. Persons making such investments or engaging in such activities, including but not limited to financing partners, as well as pipe-laying vessels and related engineering service providers engaging in the deployment of the pipelines, may be subject to sanctions pursuant to Section 232. The updated public guidance can be found at www.state.gov/caatsa-crieea-section-232-public-guidance.
The Department of State is making this update to the public guidance for Section 232 in order to address certain threats to U.S. national security and foreign policy interests, in particular Nord Stream 2. If completed, these projects would undermine European security and strengthen Russia’s ability to use its energy resources to coerce our European partners and allies. The projects would hinder the process of European energy diversification. These projects could also severely limit gas transit through Ukraine, depriving the Ukrainian government of significant transit revenues and reducing a large deterrent against further Russian aggression against Ukraine.
The Department of State is not imposing any sanctions under Section 232 of CAATSA at this time; however, if we determine that the imposition of sanctions under Section 232 is appropriate under this updated guidance, we will not hesitate to do so. We encourage companies to reassess their participation in Russian energy export pipelines subject to Section 232, and to take appropriate steps to mitigate their exposure to sanctions, pursuant to this updated guidance. We will also continue to coordinate with allies and partners in our efforts to implement Section 232 to avoid harming their energy security or endangering public health and safety.