Germany’s sanction-breaking pipeline foundation to be wound up – Prime Minister

BERLIN, Feb 28 (Reuters) – A public foundation set up to help Gazprom complete the Nord Stream 2 pipeline despite US sanctions is set to be dissolved, said the prime minister of the German state that established it , on Monday.

The foundation was set up last year by the state of Mecklenburg-Western Pomerania, where the Baltic Sea pipeline lands. Continue reading

“I asked the board of trustees to interrupt the foundation’s work and, as far as legally possible, to start dissolving it,” Prime Minister Manuela Schwesig said on Twitter.

Established with a €20 million donation from Nord Stream 2 AG, which is 100% owned by Russia’s state-controlled Gazprom, and €200,000 from the state government, the foundation allegedly funded environmental protection efforts, such as offering to fund every kindergarten in the state buy tree.

But a separate, commercial arm of the foundation was free to buy and own assets needed to complete the pipeline, taking advantage of a loophole in US legislation that exempted companies owned by European states from the sanctions.

The commercial branch was run by a person appointed by Nord Stream 2 AG, whose identity is unknown, and its activities have been and remain a secret, although housed in a public foundation.

Nord Stream 2 AG, based in Zug, Switzerland, did not immediately respond to a request for comment on Schwesig’s announcement.

The pipeline has been heavily criticized from the start: by bringing gas directly from Russia to Germany, it would have locked Ukraine out of the lucrative gas transit trade and deprived Ukraine of leverage against its hostile larger neighbor, which ambushed it last week.

Critics said the pipeline is a political project aimed at weakening Ukraine, although supporters, including the German government, said it was a purely commercial venture.

Chancellor Olaf Scholz announced last week that the now completed pipeline would not be put into operation.

Schwesig, who said she will miss Tuesday’s state parliament debate on Russia’s invasion of Ukraine because she is recovering from an operation, defended her state against accusations that it was too close to Russian President Vladimir Putin.

“That’s nonsense,” she said. “I have never spoken to President Putin and never supported his actions against Ukraine,” he added, adding that there was no justification for Russia’s attack on Ukraine.

Reporting by Thomas Escritt Editing by Miranda Murray

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