US sanctions provisions are directly targeting ships involved in Russia’s energy export pipeline projects to Europe, the International Group of P&I Clubs has warned.
Vessels that breach sanctions through involvement in the Russia to Germany Nord Stream 2 and Russia to Turkey TurkStream development projects will lose protection and indemnity cover, the International Group said.
In a note issued through its 13 P&I club members, the group said: “All members are therefore strongly urged to assess and mitigate the risks of entering into contracts on the Nord Stream 2 or TurkStream construction projects and exercise the fullest possible due diligence to avoid exposure to sanctions or enforcement actions.”
The International Group said the two pieces of US legislation that should concern shipowners are the Countering America’s Adversaries Through Sanctions Act (CAATSA) and the Protecting Europe’s Energy Security Act (PEESA).
The International Group said: “Both acts have the potential to reach the activities of non-US shipowners and others in the marine industry, including insurers.”
A provision of CAATSA allows the US to apply sanctions on high-value investments or other transactions related to the construction of Russian energy export pipelines.
Under another section, any type of vessel used in connection with Nord Stream 2 or TurkStream, or services providers to those vessels, could expose non-US people or entities to sanctions.
PEESA applies sanctions against vessels engaged in pipe-laying related to Nord Stream 2 and TurkStream and to non-US citizens who have knowingly sold, leased or provided those vessels to either project.
Vessels and services involved in site preparation, trenching, surveying, placing rocks, stringing, bending, welding, coating, lowering of pipe, and backfilling could be targeted by the act. Amendments to PEESA are currently being drawn up that will toughen up its measures further.
The International Group said: “Members are reminded that there shall be no cover for any vessels involved in activities that are either unlawful or put the club at risk of breaching sanctions. In view of the direct sanctions threat posed to insurers by CAATSA and PEESA, there will be no club cover for any activity involving or related to the Nord Stream 2 or TurkStream construction projects.”
In December last year, Swiss offshore contractor Allseas said it would suspend its involvement with Nord Stream 2 because of US sanctions.
