US sanctions bring fresh trouble for Turkey

Turkey's President Tayyip Erdogan. (REUTERS)
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Updated 23 December 2019

US sanctions bring fresh trouble for Turkey

  • The Act includes action against firms involved in EU-Russia gas pipeline

ANKARA: The 2020 National Defense Authorization Act (NDAA), signed by US President Donald Trump on Friday, includes a measure to sanction companies involved in Russian natural gas pipelines to Europe.

The move will affect the nearly finished Nord Stream 2, which runs from Russia to Germany, and TurkStream, a Russian pipeline that traverses the Black Sea to Turkey.

Swiss-Dutch company Allseas announced on Saturday that it had suspended work on building a major natural gas pipeline from Russia to Germany in order to avoid US sanctions contained in the legislation.

 

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Experts said that although the bill includes both Nord Stream 2 and TurkStream, the former will be much more affected.

Madalina Sisu Vicari, an expert on geopolitics and Turkey, said that despite NDAA coming into force, the sanctions from the Protecting Europe’s Energy Security Act have not started, as the US has 60 days to identify “vessels that engaged in pipe-laying at depths of 100 feet or more below sea level for the construction of the Nord Stream 2 pipeline project, the TurkStream pipeline project.”

The bill calls on the Trump administration to identify companies working under the project within 60 days to activate the sanctions. If a company is identified, it would then be blacklisted by the US, unless the president decided the company was decreasing its operations. The president could also waive the sanctions over national security considerations.

HIGHLIGHT

The move will affect the nearly finished Nord Stream 2, which runs from Russia to Germany, and TurkStream, a Russian pipeline that traverses the Black Sea to Turkey.

“While it is indisputable that the only company that falls under the law’s provision is AllSeas, it is also evident that the sanctions, if implemented by Trump’s administration, will not affect TurkStream because the offshore section of TurkStream is finished,” Vicari told Arab News.

Gazprom announced the completion of the offshore section of TurkStream in the Black Sea on Nov. 19.

 

“The pipeline’s offshore section was finalized ahead of schedule — its completion had been planned for December — and one of main reasons might have been attempt to avoid the sanctions targeting TurkStream.

The NDAA sanctions will come too late for TurkStream,” Vicari said.

Russian Foreign Minister Sergei Lavrov recently announced that “neither Nord Stream 2 nor TurkStream will stop.”

TurkStream aims at bringing Russian gas to Turkey under the Black Sea in January 2020, with Western companies involved in the production phase and offshore pipe laying.

 


Syrian pound plummets as new US sanctions loom

Updated 06 June 2020

Syrian pound plummets as new US sanctions loom

  • Syria is in the thick of an economic crisis compounded by a coronavirus lockdown and a dollar liquidity crunch in neighboring Lebanon
  • The UN food agency said any further depreciation risked increasing the cost of imported basic food items

BEIRUT: Syria’s pound hit record lows on the black market Saturday trading at over 2,300 to the dollar, less than a third of its official value, traders said, ahead of new US sanctions.
Three traders in Damascus told AFP by phone that the dollar bought more than 2,300 Syrian pounds for the first time, though the official exchange rate remained fixed at around 700 pounds to the greenback.
After nine years of war, Syria is in the thick of an economic crisis compounded by a coronavirus lockdown and a dollar liquidity crunch in neighboring Lebanon.
Last month, the central bank warned it would clamp down on currency “manipulators.”
Analysts said concerns over the June 17 implementation of the US Caesar Act, which aims to sanction foreign persons who assist the Syrian government or help in post-war reconstruction, also contributed to the de fact devaluation.
Zaki Mehchy, a senior consulting fellow at Chatham House, said foreign companies — including from regime ally Russia — were already opting not to take any risks.
With money transactions requiring two to three weeks to implement, “today’s transactions will be paid after June 17,” he said.
Heiko Wimmen, Syria project director at the conflict tracker Crisis Group, said that with the act coming into force, “doing business with Syria will become even more difficult and risky.”
Both analysts said the fall from grace of top business tycoon Rami Makhlouf despite being a cousin of the president was also affecting confidence.
“The Makhlouf saga is spooking the rich,” Wimmen said.
After the Damascus government froze assets of the head of the country’s largest mobile phone operator and slapped a travel ban on him, the wealthy feel “nobody is safe,” he said.
They are thinking “you better get your assets and perhaps yourself out preparing for further shakedowns,” he said.
Mehchy said the impact of the pound’s decline and ensuing price hikes on Syrians would be “catastrophic.”
Most of Syria’s population lives in poverty, according to the United Nations, and food prices have doubled over the past year.
The UN food agency’s Jessica Lawson said any further depreciation risked increasing the cost of imported basic food items such as rice, pasta and lentils.
“These price increases risk pushing even more people into hunger, poverty and food insecurity as Syrians’ purchasing power continues to erode,” the World Food Programme spokeswoman said.
“Families may be forced to cut the quality and quantity of food they buy.”