International group IGP&I, which includes 13 clubs of marine insurance companies, has warned its members about the risks associated with working with vessels participating in the “Nord Stream – 2”. In case of the introduction of U.S. sanctions, we will not reinsure anyone, IGP&I said.
IGP&I group distributed among its member clubs a circular related to the risk of US sanctions to “Nord Stream – 2” and “Turkish Stream”. Members of this organization account for 90% of ocean transport insurance.
“We remind members that there should be no insurance for vessels whose activities are illegal or put the club at risk of violating sanctions. Given the direct threat of sanctions for insurers because of CAATSA and PEESA (current law and not yet adopted U.S. bill), there will be no reinsurance by the club for activities related to the construction projects “Nord Stream – 2” and “Turkish Stream”. Therefore, all members are urged to assess and reduce the risks of contracting for the construction projects “Nord Stream – 2” and “Turkish Stream”, as well as to exercise the greatest possible care to avoid sanctions,” – said in a statement of IGP&I group.
It was noted there that insurers must follow the developments related to the adoption of the PEESA law, taking into account the mandatory and enhanced nature of sanctions.
CAATSA – the current law “On countering the enemies of America through sanctions” from 2017. In July, the State Department clarified that it now applies to “Nord Stream – 2” and “Turkish Stream”. The law prohibits investing or providing services and materials for projects worth more than $ 1 million at a time or more than 5 million per year. The sanctions are introduced by the decision of the U.S. State Department. It was reported that they will not be introduced immediately after the decision, but the companies involved in the projects were strongly recommended to leave them and avoid possible penalties.
PEESA – bills to protect energy security in Europe. They are planned to be adopted in the U.S. defense budget for next year, and they extend sanctions against Nord Stream 2. In December last year, the senators thus already banned the provision of pipelayers to the project and the construction of the Baltic gas pipeline left the ships of the Swiss company Allseas. After Gazprom began assembling the Russian fleet in the Baltic Sea, the U.S. senators prepared two bills that extend the sanctions – extending the restrictions to all vessels involved in the project, including, for example, even the stone-layers that backfill the pipeline for its safe stability on the bottom. In addition, the bill threatens insurers, ports providing services to Nord Stream 2, and companies retrofitting and installing welding equipment. Also, obviously, the most important thing is that sanctions should apply to those who participate in the testing and certification of the gas pipeline, without which it can not earn.
This extremely dangerous document for the project appeared in the Congress in early June. Following it, nine senators have registered an alternative softer project that does not retroactively enter into force and does not impose sanctions on pipeline testing and certification companies. The Senate has not yet determined which option to include in the defense budget to be adopted in November and December.