NORD STREAM 2: Russia Is Trying to Circumvent Sanctions Against the Project


In order to circumvent the sanctions, Russia is using several schemes:

1. Removing companies-owners from under the sanctions through the mechanism of temporary (for the period until the completion of works) change of ownership.

For example, in June 2020, GAZPROMFLOT LLC transferred the vessel Akademik Cherskiy to the ownership of Temryuk Trans Marin LLC, which at the end of 2020 transferred it to the ownership of Mortransservice LLC.

Also at the end of July 2020, GAZPROMFLOT LLC transferred the vessels Ostap Sheremeta and Ivan Sidorenko to Nobility JSC.

1. Creating alternative mechanisms to meet the conditions necessary for commissioning the pipeline, after its completion (certification and insurance).

One of such options is to carry out certification and insurance procedures themselves. The topic became urgent after Switzerland's Zurich Insurance Group left the Nord Stream 2 project.

For this purpose, on 11th January 2021, Constanta Insurance Company LLC was established (registered capital – 0.5 billion rubles, director – Yu. Ershova). January 13, the Bank of Russia issued it (unprecedentedly quickly) an operating license, and on March 5, the All-Russian Union of Insurers issued a permit to operate abroad. Thus, the basis was created for this company to be an insurer of Nord Stream 2.

3. Acquisition from European companies of equipment / services for the Nord Stream 2 project in small batches and with the involvement of intermediary companies

In September 2020, equipment for edging the pipes and electro-hydraulic power units were purchased for the pipe-layer Akademik Cherskiy from the Italian company Nuova Patavium. To avoid sanctions, a scheme was used to deliver products to Russia in several batches, worth no more than $ 200,000. After the entire set of equipment arrived, it was sent to the port of destination and installed on board the Akademik Cherskiy.

These facts are also confirmed by the materials of Deutsche Welle's journalistic investigation.

In addition, Poland has imposed sanctions on two German vessels, the Krebs Jet and the Krebs Geo, which participated in the implementation of the Nord Stream 2 project under the Polish flag (mostly delivering personnel to pipe-laying vessels and monitoring protected areas of the pipeline construction zone). The Gdansk Maritime Chamber deregistered these vessels. The procedure for deregistration them under the Polish flag has been initiated and vessels’ safety documents have been revoked.