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Ron Paul See other Ron Paul Articles Title: Russia to Welcome the Wedge in US-EU Relations, Courtesy of New Sanctions Bill New sanctions target Russia's energy sector. Long-term damage, however, will be done to U.S./EU relations. Russia and Gazprom are insulated from this and will welcome improving relations with Europe. By a veto-proof margin, the House passed Senate Bill S.722, which codifies and expands the sanctions regime against Russia. This bill is a major step backward not only in U.S./Russian relations, but U.S./EU relations as well. The fallout from this bill will be massive in the long run. But it won't be in the way everyone is talking about. The knee-jerk reaction is that Gazprom's (OTCPK:OGZPY) Nord Stream 2 pipeline is now in jeopardy again thanks to this bill. But the bill does not require sanctions on anyone doing business with Russia's oil and gas export sector. In fact, all it does is give the President the right to impose said sanctions. They are, however, not mandatory (emphasis mine): SEC. 232. Sanctions with respect to the development of pipelines in the Russian Federation. (A) In general. The President, in coordination with allies of the United States, may impose 5 or more of the sanctions described in section 235with respect to a person if the President determines that the person knowingly, on or after the date of the enactment of this Act, makes an investment described in subsection (B) or sells, leases, or provides to the Russian Federation, for the construction of Russian energy export pipelines, goods, services, technology, information, or support described in subsection (C) advertisement As has been widely reported, Germany is furious over this clear attempt by Congress to influence their internal policy. That is how German Chancellor Angela Merkel interpreted this bill. And while the language in the final House bill is softer than the Senate bill, it is still a contentious piece of legislation. The Nord Stream Connection The big question for investors is whether this bill will ultimately have any effect on Gazprom's Nord Stream 2 expansion project. There are five European companies invested in Nord Stream 2 as lenders to Gazprom for 50% of the project's projected costs. They are: Royal Dutch Shell (RDS.A) (NYSE:RDS.B), OMV AG (OTCPK:OMVJF), Wintershall, Uniper SE (OTC:UNPRF), and Engie SA (OTCPK:ENGIY). Originally, these companies and Gazprom were to form a joint venture with Gazprom holding 50% of the ownership, but that was struck down by Poland. Source: Seeking Alpha Post Comment Private Reply Ignore Thread
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