Thread by @v_madalina

As #NDAA on the House and Senate floors this week (!), the opportunity for a THREAD on #NordStream2 and #Turkstream has arisen

1️⃣ Modification of Guidance for Section 232 of CAATSA to allow sanctioning of NS2 and second line of Turkstream (#Balkanstream) aims 1/

>>to give entities involved in the two projects leeway to wind down their participation before theCongress sanctions (NDAA) would hit on
>>as paradoxically as it may seem, to reduce some of the impact and scope of Congress sanctions 👉potentially, to avoid retroactive 2/

application of sanctions. Regarding the scope, should wait until we see what sanctions, exactly, would be included in NDAA, and what other entities-from those providing underwriting or insurance to pipe-laying vessels, to those facilitating shop retrofitting-would be targeted 3/

Principal aspects pertaining the modified Guidance

➡️ Sanctions on investments or other activities activities made prior to July 15, 2020 will not be sanctioned. Investments & activities made after July 15 would basically not be sanctioned if the company/entity in cause 4/

"is taking reasonable steps to wind down the operations, contracts, or other agreements as soon as possible after July 15, 2020"

➡️ The term "investment" is interpreted broadly (see below) : "transaction that constitutes a commitment or contribution of funds or other assets 5/

a loan or other extension of credit to an entreprise"
➡️ Even investments or activities related to standard repair or maintenance of #NordStream2 & 2nd line of #Turkstream (#Balkanstream) could be target of sanctions

2️⃣ Exclusion of #NordStream2 (#Turkstream) from CAATSA's 6/

initial scope was largely the very result of the negotiations between Germany, respectively EU, and the US. The main reason that driven this option of US administration was to preserve Germany's engagement for coordination of sanctions against Russia.
But with EU sanctions on 7/

almost autopilot-and no real prospects to be lifted too soon-, the issue is not a matter of current concern for the American administration.
The hypothesis that Germany, or EU might attempt to lift the sanctions on Russia as a retaliation is simply out of the question 8/

3️⃣ As NS2 has stolen the limelight hitherto, it was given less attention to the issue of the entities involved in Balkanstream, and which might be affected by an eventual application of #CAATSA sanctions.
These are mainly Bulgartransgaz, the national gas transmission and 9/

gas storage operator, the Saudi company Arkad, and, very likely, the Russian company Infrastructure Development and Construction (IDC), registered in Belgrade.
IDC was the main contractor of the Serbian section of Turkstream (#Balkanstream) pipeline. Now is a subcontractor 10/

of more than 100km of Bulgarian section of the pipeline.
#Bulgartransgaz and Arkad have a contract of €1.1 billion and the Bulgarian company has recently sought to get loans of nearly € 550 million from banks in order to make advance payments to Arkad and, evidently, IDC 11/

* After final vote on NDAA, even more companies and entities involved in NS2 and second line of Turkstream (Balkanstream) would be potential target of sanctions.
What is important to be seen is
if & how the US administration would balance between the two bills, CAATSA & NDAA 12/

what sanctions regime (CAATSA or NDAA) would be prioritised in application, and what would be the reaction of the affected parties
#ONGT

Last but not least, today (July 22) Pompeo in official visit in Denmark, a country that some had seen (before granting to Gazprom the permit to use pipe-laying vessels with anchors) as main hope to slow down NordStream2 14/