Germany Downplays Washington’s Sanctions For Sake Of Partnership With Russia

German businesses may be looking for ways to outflank U.S. sanctions against European companies in order to continue doing business with Russian partners. Executive Director of the German Committee on Eastern European Economic Relations, Michael Harms, questioned the prudence of Washington’s restrictions, when he said that sanctions are “senseless” and claimed they violate international law.

“U.S. sanctions introduced or prepared since April of last year are no longer reflect a clear political goal, and, therefore, (they) are politically senseless,” Harms said in an interview with OWC Verlag on April 9. “We consider the extraterritorial application of U.S. sanctions against European companies that cooperate with Russian companies as illegal under international law and politically senseless.”

In 2017, the Trump Administration released the Countering American Adversaries Through Sanctions Act, which threatens to impose sanctions on any country engaged in what the U.S. Treasury Department calls a “significant transaction” with Russian defense and intelligence sectors. 

Harms emphasized that European businesses are ready to look for ways to blunt any sanctions against Russia imposed by Trump. The committee has already developed a memorandum aimed at improving relations with Moscow, despite pressure from the White House.

“We want to show that we have common interests with Russia on many major global political and economic issues,” said Harms when answering a journalist's question about the reasons the committee is proposing a new agenda for European-Russian cooperation.

The document emphasizes the harmful effects of restrictive measures against Russia for German businesses, and urges Europe’s enterprises, associations and politicians to focus on common interests and implement common projects, while bypassing the U.S. sanctions.

“According to the calculations of the Russian-German Chamber of Commerce, only in the last fiscal year, German companies have missed due to U.S. anti-Russian sanctions up to one and a half billion euros,” Harms added.

Meanwhile, the American legislation faced strong criticism in Europe, including by German companies mainly in the aluminum and automobile sectors that have strong business connections with Russian partners. A number of German companies have been significantly limited because of the law and confronted with the problem of deciding whether to conduct business with Russia or with the United States.

“Germany’s industry purchased 40 percent of the aluminum it needed in Russia, but Americans want us to buy it at higher prices from them,” RIA Novosti quoted Jürgen Trittin, a German parliamentarian who is a member of the Committee on Foreign Affair, as saying on April 15. “Having lost access to cheap Russian metal, German companies may lose significant market share, and all because the German government is not able to protect its players from Washington.”

Last July, during a trip to Brussels for a NATO summit, Trump accused Berlin of being “totally captive to Russia” due to its growing dependence for energy resources. Since then, the Trump Administration has called on Europe to abandon the multi-billion Nord Stream-2 project with Russia in exchange for purchasing American liquefied natural gas (LNG).

Gazprom is constructing Nord Stream-2, which stretches from Russia to Europe and is being laid along the floor of the Baltic Sea. If completed the 1,200-kilometer (746 mi) pipeline will double Germany’s natural gas imports from Russia. Along Gazprom, Nord Stream 2 is being built by a consortium of western European energy companies: Austria’s OMV, France’s Engie, Germany’s Uniper and Wintershall, and the Anglo-Dutch firm Shell.