On 27 December 2019, the Wall Street Journal (WSJ) reported that German politicians have called on Europe to adopt protective measures against U.S. sanctions after Congress threatened sanctions on companies involved in the construction of an oil pipeline from Russia to Germany – considered “Europe’s biggest energy-infrastructure project.”  The result of this threat was the loss of a Swiss company that was facilitating the pipe-laying, thus halting progress and jeopardizing this multi-billion-dollar project.

In 2019, U.S. sanctions expanded to wide-ranging levels affecting more than the entities these programs and restrictions were aimed to target. The U.S. and European Union have been at odds for much of this year on the extensive application of U.S. sanctions through the principle of extraterritorial reach.  An application that has resulted in “fines worth tens of billion dollars on European firms, especially banks, for past sanctions breaches,” according the WSJ.  European nations have been exploring alternatives to using the USD and/or conducting business transactions with sanctioned entities outside the purview of the U.S., but with little success to date.

According to the WSJ, while the pipeline still expects to be completed in 2020, the cost of construction has increased considerably.  As the world begins a New Year, the EU and U.S. tension over U.S. sanctions measures is likely to persist and may well worsen before it improves.  However, if the EU and U.S. can instead form a harmonious balance between sustaining effective sanctions measures and permitting benign yet lucrative projects to occur in high-risk areas, that balance could yield economic potential the world would welcome at the start of a new decade. 

So, cheers to a New Year (and decade) filled with peace, prosperity, and unprecedented diplomacy.