Would classic liberals be hawkish or reserved?
Unilateral US sanctions against petro-states
Change in action
The US government used unilateral economic sanctions in the form of export and import restrictions for oil after the end of World War II, because the United States was dependent on imports and had to fear supply gaps and price volatility. At present, however, Washington is in the comfortable position of using economic sanctions to divert trade flows away from producers and significantly reduce their export volumes without having to face a global supply bottleneck or price increases. This does not require diplomatic means to forge a coalition of consumers and hold them together over a long period of time, nor does it have to resort to military means such as blockades at sea or sieges on land.18
The US sanctions policy benefits from the country’s leading position in promoting fossil fuels.
This change from a cautious to an offensive use of unilateral US sanctions against petro-states is largely made possible by the dominance of the dollar on the international financial markets.19 The strong use of the US currency is particularly evident in the portfolio of foreign central banks, which hold the dollar as a reserve, as well as in the international payment transactions of private economic actors, especially in the trading of oil. As a relic from the 20th century, this is still mainly invoiced in the US currency. The worldwide use of the dollar serves the US government as a sufficient connecting factor to extend its authority to natural and legal persons beyond its own national borders.20
The use of unilateral primary and secondary sanctions on the international oil market takes place at different starting points along the entire value chain: from exploration and extraction (upstream) about transportation (midstream) up to further processing and distribution to the end user (downstream).21 In addition to the national oil companies and their respective customers, their banks and (re) insurers also belong to the circle of potential targets. In addition, the Department of Commerce and the State Department in Washington can tighten export controls in order to withhold any military and civil-military goods, technologies and services that they may need from petro-states.
In addition to the dollar dominance, the US government benefits from the fact that the United States recently returned to the top position in the world in the extraction of fossil fuels. Between September 2008 and September 2019, domestic oil production more than tripled - from an average of 4 million to 12.5 million barrels per day.22 Market-driven subsidies distinguish the USA from the producing countries in the Near and Middle East. In 2019, the United States leads the world in production.23 At the same time, imports of foreign oil fell to a historically low level; in 2018 it was only 7.8 million barrels per day on average.24 The net imports of petroleum (imports minus exports of all crude oil and all petroleum products) fell to 2.2 million barrels per day or around 11 percent of total consumption - the lowest percentage since 1957.25
After Congress lifted the oil export ban in December 2015, US oil and gas exports rose sharply.26 In 2018, the United States exported around 2.2 million barrels of oil per day; At the end of the year exports exceeded imports for the first time since 1948/52.27 From the also increased export of liquefied natural gas (Liquefied Natural Gas, LNG) around a third went to Europe in the first half of 2019.28 With the export of US-American LNG - which Under Secretary of Energy Mark W. Menezes praised as "freedom gas", Assistant Secretary for Fossil Energy Steven Winberg as "freedom molecule"29 - European and Asian allies should not only be reliably supplied with energy, but should also be removed from their dependence on geopolitical opponents.
The change from a net importer to a net exporter of fossil fuels has created a new awareness in the United States of no longer having to fear scarcity, but of being able to draw from an abundance of energy. During the 2016 presidential campaign, Donald Trump promised to end reliance on foreign energy imports if he won.30 On the day he took office in January 2017, he presented his “America First Energy Plan”, which aimed to make the country independent of energy imports by promoting fossil fuels. In a speech in August 2019, President Trump finally announced the end of American dependence on foreign energy imports. The next task he then explained was the pursuit of "energy dominance"31 - an objective that was already laid out in the National Security Strategy that its administration published at the end of 2017.32
This goes hand in hand with the complete abandonment of efforts to sustainably reduce oil consumption, without which security of supply can hardly be maintained in the long term.33 Beyond the relentless rhetoric of »America First " This position reflects a long-standing consensus among US foreign policy elites that the country's powerful »energy arsenal« should be actively used to pursue foreign policy goals.34 In particular, petro-states have now come into focus.35
Islamic Republic of Iran
In early May 2018, President Trump announced that he would be fulfilling one of his key election promises and no longer fulfilling the obligations his predecessor Obama made under the nuclear deal with Iran (Joint Comprehensive Plan of Action, JCPOA) was received. The primary and nuclear-related secondary sanctions, which had been suspended since January 2016, subsequently came into force again - in two tranches in August and November 2018. The second tranche included measures aimed at the entire value chain in the energy sector, including the production, sale and transport of Iranian oil. As the primary instrument of a "strategy of maximum pressure", the unilateral US sanctions have imposed massive economic costs on the leadership in Tehran. This is intended to give the necessary emphasis to the twelve demands made by Foreign Minister Michael Pompeo for a fundamental change in Iran's nuclear, regional and domestic policy.36
Since the Islamic Revolution in 1979, the Iranian energy sector has been in the crosshairs of unilateral US sanctions for most of the time. The most effective mechanism for reducing Iranian oil exports was created by Congress in late 2011, when a bipartisan majority against the will of the Obama administration National Defense Authorization Act for Fiscal Year 2012 (NDAA 2012). Its Section 1245 (d) empowers the US Treasury Secretary to exclude foreign financial institutions from using the dollar. Specifically, domestic banks can be instructed to restrict or close their correspondent accounts with foreign financial institutions that carry out "significant financial transactions" with the participation of the Iranian Central Bank or another Iranian bank listed as SDN. Foreign central banks that process payments for the purchase of Iranian oil can also be excluded from the dollar. The passage came into force at the end of July 2012, shortly after the EU imposed a boycott on Iranian oil. European companies did not get caught in the dilemma of having to choose between the Iranian and the US market.
Concerned that paragraph 1245 of the NDAA could drive up the price on the international oil market in 2012, Congress obliged the administration to report every 60 days on the global supply of oil and the effects of a decline in Iranian oil exports. In order to dampen other unintended effects, the US State Department was able to grant Significant Reduction Exceptions (SRE) valid for 180 days to the home countries of foreign financial institutions. These exemptions allowed individual states to continue to import Iranian oil. The prerequisite for this, however, was a previous "significant" reduction in Iranian oil imports by around 18 percent of the price paid.
"Maximum pressure" - the US sanctions have imposed massive economic costs on Tehran.
Due to the EU embargo on Iranian oil that came into force at the beginning of July 2012, the US State Department granted the ten remaining European importers SREs every six months from September 2012 and until the JCPOA came into force in January 2016.37 After Japan had already received the first SRE in May 2012, China, India, Malaysia, Singapore, Sri Lanka, South Africa, South Korea, Taiwan and Turkey followed in December 2012. As a result of the import reductions in these countries, Iranian oil exports between February 2012 and November 2013 fell by almost half compared to the same period of the previous year to around 1.1 million barrels per day. The proceeds from the sale, which originally covered almost half of Iran's government spending, fell by a total of around $ 40 billion.38
Originally, Paragraph 1245 of the NDAA 2012 was less intended to reduce Iranian oil exports than to isolate the Iranian Central Bank. That changed, however, after it became clear what effect this instrument was having. A year later, Congress tightened Paragraph 1245 of the NDAA in 2012 when it passed the Iran Threat Reduction and Syria Human Rights Act of 2012 adopted. Paragraph 504 of this stipulates that from the beginning of February 2013 international financial institutions were only allowed to make payments invoiced in dollars from the oil business with Iran to an escrow account held in the home country of the respective bank involved. With the corresponding credit, the Iranian leadership could henceforth only acquire humanitarian or agricultural goods and services in the respective country and thus no longer repatriate any hard currency.
With the Iran Freedom and Counter-Proliferation Act of 2012, which Congress passed in early January 2013 as part of the Defense Ministry's Expenditure Approval Act (NDAA 2013), the US government also aimed at acquiring Iranian oil in addition to processing payments from the oil business with the participation of the Central Bank of Iran. Its paragraph 1244 also triggers secondary sanctions according to the ISA, among other things, if foreign companies trade with business partners from the Iranian shipping and energy sector. Secondary sanctions in the form of the loss of correspondence accounts are also threatened by international financial institutions if they process transactions involving the SDN-listed National Iranian Oil Company, National Iranian Tanker Company and Islamic Republic of Iran Shipping Lines.39
The Obama administration could not unilaterally withdraw the tightened paragraph 1245 of the NDAA in 2012 after the JCPOA came into force in January 2016, but only suspend it every 120 days with reference to the national security interest. Only in this way was it possible, without the involvement of Congress, to actually implement the commitments entered into under the JCPOA. This immediately eliminated the need to issue SREs to the respective home countries of the foreign buyers of Iranian oil. Under the Joint Plan of Action (JPOA), which was in effect as the predecessor of the JCPOA since November 2013, China, India, Japan, South Korea, Taiwan and Turkey were able to continue to import limited amounts totaling around one million barrels per day (which actually turned out a little higher). Since paragraph 1245 of the NDAA 2012 was not suspended at this point in time, the corresponding payments continued to flow into escrow accounts. The Iranian leadership was allowed to repatriate around $ 700,000 a month from it.40
The Trump administration also suspended paragraph 1245 of the NDAA several times in 2012 when it was still complying with the obligations under the JCPOA. This happened three times, in May and September 2017 and in January 2018. When Trump then announced in May 2018 that all nuclear-related US secondary sanctions would be reinstated, only eight of the more than 20 buyers of Iranian oil that had existed before 2011 were still there left. In contrast to the practice of the Obama administration, Iranian condensate has now also been recorded, which is a by-product of oil production and which until then was mainly imported from South Korea. After paragraph 1245 of the NDAA 2012 came into force again at the beginning of November 2018, the Trump administration once again issued SREs to China, India, Japan, South Korea, Turkey, Taiwan, Greece and Italy. At that time the last three countries had already ceased their imports.41 In April 2019, the US State Department informed the remaining four countries that it would not renew their SREs, which expired at the beginning of May 2019, in order to completely dry up Iranian oil exports.42
The then National Security Advisor, John Bolton, with his confrontational course of bringing Iranian oil exports to zero, prevailed against remaining resistance in the US State Department.43 Bolton also ensured that the sanctions were implemented across the board and that overt violations were punished.44 While Japan, India, and South Korea had ceased imports by that point, Syria and China - and, apparently, Turkey - continued to import Iranian oil. Some of the deliveries to Syria (around 100,000 barrels) are not subject to US sanctions because they are paid for in the form of promissory notes. However, another part is affected by US sanctions.
This included roughly the 2.1 million barrels of Iranian oil that were on the Grace 1 tanker. At the end of May 2019, the Panamanian flag was withdrawn due to irregularities. In early July, after Washington intervened, a British naval command landed the ship as it entered the Mediterranean Sea. The authorities of the British overseas territory Gibraltar had previously created the legal requirements to be able to seize the tanker in accordance with EU law. After a court order, the ship, which is now sailing under the Iranian flag and renamed Adrian Darya 1, was released in August 2019, despite a request from the US Department of Justice for a new trial.45 The Iranian embassy in London had previously given a written assurance that it would not head for any destination that would run counter to unilateral EU sanctions, such as refineries on the Syrian coast (which it did). Subsequently, representatives of the Trump administration threatened all banks and port operators who would henceforth come into economic contact with the ship with unilateral sanctions,46 and a federal court in Washington D.C. ordered its confiscation.47
The main focus was on China, whose government was the only remaining paying importer of Iranian oil to openly contravene US sanctions. Iranian exports there fell by around two thirds in 2019 compared to the previous year. Notwithstanding this, China received around 200,000 barrels of Iranian oil (worth $ 453 million) in June, according to official data from the state customs authority.48 A large part of it has since been stored in Chinese ports and is therefore legally neither acquired nor officially imported.49 Nonetheless, in July and September 2019, the US State Department first imposed secondary sanctions on Chinese companies and individuals involved in the continued importation of Iranian oil.50 In the meantime, the China National Petroleum Corporation had withdrawn from the Iranian gas field South Pars, as had previously done the French TOTAL due to the threat of US sanctions.51
Tehran did not live up to its threat to close the Strait of Hormuz after the Trump administration turned its back on the JCPOA and reinstated unilateral US sanctions.52 But as part of a calculated escalation strategy, the Iranian leadership began in May 2019 to put the Europeans under pressure by gradually suspending the commitments made under the JCPOA to limit their nuclear program. In addition, there were repeated acts of sabotage against passing oil tankers, oil production facilities and oil pipelines.The US government blamed the Iranian Revolutionary Guard for all of these incidents.
The unilateral US sanctions are driving the escalation spiral in the Persian Gulf.
Washington classified the Revolutionary Guards as a foreign terrorist organization in April 2019 and added the Iranian revolutionary leader's office to the SDN list in June. In addition to these measures, it was the reduction in Iranian oil exports that ultimately tipped the balance in the fact that the leadership in Tehran gave up the strategy of strategic patience it had pursued to date and embarked on an escalation course. According to the scientific service of the Iranian parliament, the National Development Fund, into which the income from the sale of oil flows and from which money had recently been repeatedly withdrawn for necessary expenses, had not received any new grants from the budget since February 2019.53 The Development Fund, like the Central Bank of Iran, was listed by Washington in September 2019 as a supporter of international terrorism. In doing so, the US government reacted to attacks against Saudi Arabian oil facilities, which it accused the Iranian leadership of.54 As a result, international banks will no longer only refrain from making payments for the purchase of Iranian oil for the foreseeable future, but will also refrain from handling purely humanitarian trade. The use of unilateral US sanctions is driving the spiral of escalation in the Persian Gulf, which can now hardly be controlled.
Bolivarian Republic of Venezuela
With a view to Venezuela, the Trump administration's policy is aimed at holding free and fair elections - a goal that President Nicolás Maduro opposes. In mid-2017, he convened a constituent assembly and placed his own supporters there. The body exists as a parallel parliament alongside the National Assembly, which has been controlled by the opposition since the end of 2015. The controversial re-election of President Maduro took place in May 2018; shortly before the start of his second term in office, the National Assembly denied him legitimacy in mid-January 2019. A little later, Juan Guaidó, the President of the National Assembly, was appointed as the country's interim president. This step was based on Article 233 of the Venezuelan Constitution, which regulates the representation of the President in the event of absenteeism. Since then, Guaidó and Maduro have been fighting for power.55
Guaidó was recognized by the United States and (by the end of 2019) a total of 54 other nations as the official representative of his country, including a majority of the EU member states including Germany. On the other hand, China, Iran, Cuba, Russia and Turkey, among others, hold on to Maduro as legitimate president. In addition to diplomatic support and humanitarian aid, the Trump administration is primarily focusing on the use of unilateral sanctions in this conflict. The aim is to dry up Venezuela's oil exports as the main source of income for President Maduro's government. As with the reduction of Iranian oil exports, the US government has been very aggressive in this case. In August 2017, President Trump had banned natural and legal US persons, the state oil company Petróleos de Venezuela, Sociedad Anónima (PdVSA) to provide capital in the form of loans ("debt" and "securities") with a term of more than 90 days. The same applied to the purchase of government bonds, the distribution of dividends and the granting of loans with a term of more than 30 days to the Maduro government or institutions and organizations controlled by it.56
In early November 2018, President Trump issued Executive Ordinance 13850, Blocking Property of Additional Persons Contributing to the Situation in Venezuela. It allows the US Treasury Secretary, in coordination with the Secretary of State, to add natural and legal persons to the SDN list who operate in the gold sector or other areas of the Venezuelan economy previously designated by the Treasury Department. In addition, the decree enables any natural or legal person worldwide to be listed as SDN who materially supports or does business with those persons who have been sanctioned under Executive Ordinance 13850.57 As a result, the assets under US jurisdiction will also be blocked for that person and natural and legal US persons will be prohibited from entering into business relationships with them under threat of punishment.
After the US Treasury Secretary named the Venezuelan oil sector accordingly at the end of January 2019,58 the departmental Office of Foreign Assets Control added Venezuela's national oil company PdVSA to the SDN list.59 Security advisor Bolton put their blocked assets at around 7 billion dollars, and the losses in income from oil sales for Caracas this year at around 11 billion dollars.60 Foreign Secretary Pompeo handed over control of the US subsidiary of PdVSA, the refinery and gas station operator Citgo Petroleum Corporation (CITGO), to Interim President Guaidó.61 PdVSA is now toxic, as it were, because every international business partner who transacts with the company can also be listed as an SDN. In March 2019, this hit a Moscow-based binational bank that had done business with PdVSA and that is under the control of the Venezuelan state development fund (Fondo De Desarrollo Nacional Fonden SA) as well as the two Russian banks Gazprombank and VTB.62
In March 2019, the National Assembly in Caracas banned the export of Venezuelan oil to Cuba. The island nation covers most of its energy needs with fossil fuels and obtains most of the imported oil from Venezuela. At the beginning of April 2019, OFAC began listing natural and legal persons as well as tankers involved in Venezuelan exports to Cuba as SDNs. The first to be affected was a Liberian company and a Greek shipping company - as the owner and operator of the tanker Despina Andrianna, which had transported Venezuelan oil to Cuba in February and March.63 OFAC has now identified almost 50 tankers as SDN. In addition, the US State Department put pressure on dealers and refiners to avoid Venezuelan oil in the future so as not to be targeted by these sanctions.64 It aimed in particular at companies from Russia, China and Spain who export refined mineral oil products to Venezuela, with which the oil extracted there is stretched so that it can then be transported away via pipelines. Eliminating these imports could damage ongoing wells and undermine the country's production capacity in the long term.
In addition to the gold and oil sectors, the US Treasury Department also named the Venezuelan financial sector in March 2019 under Executive Ordinance 13850.65 For the first time, the execution then hit the state development bank of the country as well as four other banks from Venezuela, Uruguay and Bolivia.66 In May 2013, the Iranian Venezuelan Bi-National Bank was listed as an SDN because of its cooperation with the Iranian Export Development Bank. The latter, in turn, was considered SDN from October 2008 because it was accused of supporting the proliferation of weapons of mass destruction by working with the Ministry of Defense of Iran, which was also listed a year earlier.67 Since September 2017, international financial institutions have been required to report the obfuscation of ownership structures, which is seen as an attempt to circumvent, to the responsible body in the US Treasury.68 In March 2019, President Trump banned US individuals and legal entities from using a cryptocurrency issued by the Venezuelan government from early January in order to reduce the points of contact with the dollar when processing payments.69 In mid-April, OFAC put the Venezuelan central bank on the SDN list.70 Beyond a state of war, Washington had never taken such a dramatic step before. In May 2019, the US Treasury Department named Venezuela's Defense and Security Sector under Executive Order 13850 in response to the arrest of Edgar Zambrano, Vice Chairman of the National Assembly, by members of the Vice President's secret police.71 Zambrano and six other MPs had previously withdrawn immunity from the Constituent Assembly, including Guaidó, who was acting as interim president.72
Based on his "strategy of maximum pressure" against Tehran, Trump issued Executive Ordinance 13884 at the beginning of August 2019, Blocking Property of the Government of Venezuela. This will freeze the assets under US jurisdiction of the government led by President Maduro, including local administrations, the central bank, and natural and legal persons who have a direct relationship with them.73 This does not apply to the National Assembly and the parallel government of interim President Guaidó. At the same time, any transaction that foreign individuals or companies carry out with the Maduros regime has the effect of blocking their assets under US jurisdiction. According to Bolton, security advisor at the time, this drastic step was primarily directed against the remaining buyers of Venezuelan oil, including China, India, Malaysia and Turkey, as well as against the Cuban and Russian military presence in the country.74 Oil production in Venezuela takes place through joint ventures between PdVSA and foreign companies such as the French TOTAL, the Norwegian Equinor and Spain's Repsol - they all now run the risk of being listed as SDN for this.75 The largest Turkish bank closed its accounts at Venezuela's central bank, which processed payments for oil purchases in Turkish lira.76
In addition to these US sanctions aimed at oil exports, in the case of Venezuela there have been penalties for more than a decade that are directed against denounced drug smuggling, corruption and, from Washington's point of view, insufficient cooperation in the fight against international terrorism or its direct support. In addition, with the adoption of the Venezuela Defense of Human Rights and Civil Society Act of 2014 in December 2014 laid the foundation stone for exerting direct influence on the policies of President Hugo Chávez's successor with the help of unilateral sanctions. US President Obama implemented these legal requirements in March 2015 with the enactment of Executive Ordinance 13692, Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Venezuela. Beyond the facts originally mandated by Congress - direct and indirect use of force, violation of human rights and corruption - Obama also used this decree to oppose the undermining of democratic processes and institutions in the country. Individuals accused of doing so in Venezuela will not be allowed to enter the United States and their assets under US jurisdiction will be blocked. At the same time, natural and legal US persons are prohibited from entering into business relationships with such persons if they are threatened with punishment.
At the end of July 2019, OFAC added several players to the SDN list on this basis: three sons-in-law from Maduro and three other people as well as 13 international companies from Turkey and the United Arab Emirates. Among other things, those listed are accused of corruption in connection with the state nutrition program CLAP.77 By the end of August 2019, the affected group comprised almost 100 people, the majority of whom were official government representatives such as President Maduro,78 the eight judges of the Supreme Court79 and high-ranking military,80 but also executives of state-owned companies.81 These congress-authorized sanctions continue to enjoy bipartisan backing and are to be extended for another two years until the end of December 2021.
So far, the US government's strategy of sanctions does not seem to be working in Venezuela.
The special commissioner for Venezuela at the US State Department, Elliott Abrams, publicly appealed to Maduro's supporters in early June 2019 to (re-) take their seats in the National Assembly as the only democratically legitimized institution, and at the same time announced further sanctions.82 According to Washington, these are primarily aimed at detaching Venezuelan elites in the military and administration from President Maduro. To make this clear, when such measures are imposed, it is regularly declared that they would be lifted immediately as soon as the desired change in behavior occurs.
The Trump administration's offensive action against Venezuela's main foreign exchange source has fueled inflation in the country. For 2018 it reached a rate of around 80,000 percent,83 which led the economy to the brink of collapse. Associated with this was a catastrophic humanitarian situation that drove more than 10 percent of the population to flee abroad in the past four years.84 It remains unclear whether the unilateral US sanctions are solely responsible for the misery or whether they have only contributed to it - given the domestic mismanagement.85 Regardless of the fatal economic collateral damage, the strategy pursued with the sanctions does not seem to be working so far. After a failed coup attempt at the beginning of May 2019, some of Maduro's previous supporters turned away from him. But interim president Guaidó has not yet succeeded in attracting a critical mass of supporters to his side; this is especially true of the military apparatus.86 After Maduro declared the mediation efforts of the Norwegian government to have failed in mid-August, which had taken place in Oslo and on the Caribbean island of Barbados since May, a peaceful way out of the stalemate remains uncertain.
Since the beginning of 2014, the US government has imposed extensive economic sanctions on Russia. It was a reaction to the annexation of the Black Sea Peninsula of Crimea by the Russian Federation, the Kremlin's ongoing destabilization policy in eastern Ukraine and its continued attempts to influence internal political opinion-forming and voting processes in the United States. Washington initially proceeded cautiously; With a few exceptions, the ongoing production of oil and natural gas in Russia and its export were generally exempt from US sanctions. The US trade volume with the Russian Federation was around 14 times lower than that of the European Union at the beginning of 2014. Around two thirds of their oil demand was covered by imports in 2017; almost a third of them came from Russia.87 The cautious use of unilateral US sanctions against one of the largest energy exporters was due, on the one hand, to consideration for Europe's dependency and, on the other, to concerns about a price increase on the international oil market.88
The foreign and trade ministries in Washington tightened export controls for dual-use and military goods as well as for technology and services vis-à-vis Russia. In addition, OFAC has only occasionally added natural and legal persons from Russia to the SDN list. Instead, new types of sanctions - so-called sectoral - were used, in which Russian companies did not rely on the SDN, but on the Sectoral Sanctions Identification (SSI) list can be set. This places a time limit on the provision of capital by natural and legal US persons. For listed Russian financial institutions, the term of newly taken out financing must not exceed 14 days (Directive 1), for Russian energy companies not more than 60 days (Directive 2) and for Russian armaments companies not more than 30 days (Directive 3). Finally, natural and legal US persons are prohibited from participating in the exploration and production of Russian oil in arctic waters, in the deep sea and in shale formations (Directive 4). In contrast to those listed as SDN, those on the SSI list can continue to freely dispose of their assets falling under US jurisdiction. In addition, US persons can enter into all other business relationships with them.
The sole aim of this approach is to drive up the costs of developing new Russian oil and gas reserves in the Arctic, deep sea and shale formations and to slow down the long-term growth of the Russian economy.89 Against this background, it should be understood why the economic impact of the US sanctions has so far remained limited.This made it possible for Moscow to dampen the rise in inflation caused by the drop in oil prices and the associated devaluation of the ruble from the end of 2014 by raising the key interest rate in September and December 2015 by the Russian central bank. But the reluctance to use unilateral US sanctions against the Russian energy sector has been in question since the beginning of 2019. Since then, the responsible committees in Congress have discussed several mostly non-partisan bills that would target the production and export of Russian oil with far more fatal consequences than before. This could also affect the previously spared state company Gazprom.
The draft law contains the most serious restrictions with regard to ongoing oil production Defending American Security from Kremlin Aggression Act of 2019 (DASKA). Its Paragraph 603 introduces, among other things, two facts that would result in the application of five of the total of twelve sanctions under Paragraph 239E (currently still Paragraph 235) of the CAATSA against foreign natural and legal persons. First, this applies to investments of $ 250 million or more in energy projects involving state-owned companies or the Russian government (paragraph 239A). Second, it includes the provision of goods and (financial) services valued at $ 1 million or more - or $ 5 million over a twelve month period - with which Russian oil reserves can be developed and exploited (paragraph 239B).
The Defending Elections from Threats by Establishing Redlines Act of 2019 (DETER) provides for punitive measures should the administration discover that the Kremlin or persons or organizations close to it have interfered in an American election. According to Paragraph 202 of the draft, the assets under US jurisdiction would be blocked in five large Russian (state) banks and their correspondent accounts held with US banks would be restricted or closed. In addition, the draft contains an investment ban for US persons in relation to the Russian energy sector as well as asset freezes for foreign persons who invest in the Russian energy sector or in Russian energy companies (both do not apply retrospectively). As a result, European financial institutions in particular would be forced to withdraw from the Russian financial sector.
Pressure instead of diplomacy is currently the motto of US Russia policy.
These drafts are likely to be toned down before they are passed. For example, the President should be given the opportunity to grant temporary and content-limited exemptions due to national security interests, so that the implementation can be structured flexibly. From individual legislative measures like that European Energy Security and Diversification Act of 2019 Apart from the provision of loans for the development of LNG projects in Eastern Europe, the legislative initiatives in Washington have a clear thrust: pressure instead of diplomacy is currently the motto of US policy on Russia. The European allies could soon be affected, as in the case of Iran.
The one adopted as part of the NDAA 2020 provided a first foretaste Protecting Europe’s Energy Security Act of 2019. With it, a bipartisan majority in the US Congress is targeting foreign companies against the will of President Trump, which provide special ships for laying pipes below sea level and in this way are involved in the construction of the two natural gas pipelines Nordstream 2 in the Baltic Sea and Turkstream in the Participate in the Black Sea. The law had finally been weakened; originally it was also supposed to target the European shareholders of Nordstream 2 - Uniper and Wintershall from Germany, Engie from France, OMV from Austria and the Dutch-British Shell. Not only their employees, but also their business partners would then have threatened that they would be denied entry to the United States and that their assets under US jurisdiction would be blocked. The original bill would also have authorized the President to exclude from the American market the insurers and reinsurers of those companies whose ships lay the pipes underwater. Specifically, this would be done by the fact that natural and legal US persons are not allowed to give them loans or investments and their business with goods, services and technology, which in Washington's view are under US jurisdiction, would be largely restricted. The entire Russian infrastructure for the export of natural gas and crude oil is thus increasingly moving into the crosshairs of US sanctions, including foreign companies building LNG terminals - although Washington is also pushing ahead with their expansion in order to promote US LNG exports.90
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