Abstract
Following the example of a number of countries, the European Union recently introduced a regulation for a screening mechanism for foreign direct investments. Also preceding the formal EU-wide screening mechanism, major foreign investments, such as pipelines, could be screened by EU Member States, either formally or informally. The Nord Stream 2 (NSP2) pipeline project has been subject to a number of measures in the different phases of its investment that could be understood as informal screening processes. Such measures have been taken not only by the EU and its Member States but also by the United States in the form of extraterritorial sanction threats. In this chapter, experiences with these mechanisms are discussed with the aim of determining whether a common approach, as adopted in the EU, is necessary and desirable.
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Notes
- 1.
See on this: Kaech in: Ehlers et al. (2010), p. 89 et seq.
- 2.
See on this: Talus (2017a), European Commission (2017) Nord Stream 2 - Divide et Impera Again? Avoiding a Zero-Sum Game. https://ec.europa.eu/epsc/publications/other-publications/nord-stream-2-%E2%80%93-divide-et-impera-again_en. Accessed 06.1.2020.
- 3.
Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC, OJ L 211, 14.8.2009, pp. 94–136.
- 4.
Council of the European Union (27 September 2017), Opinion of the legal service, Recommendation for a Council decision authorizing the opening of negotiations on an agreement between the European Union and the Russian Federation on the operation of the Nord Stream 2 pipeline, Brussels, 12590/17, para. 25.
- 5.
Directive (EU) 2019/692 of the European Parliament and of the Council of 17 April 2019 amending Directive 2009/73/EC concerning common rules for the internal market in natural gas, OJ L 117, 3.5.2019, pp. 1–7.
- 6.
Euractiv (29 May 2019b) Exploring the limits of EU’s unbelievable behaviour on Nord Stream 2. Available at: https://www.euractiv.com/section/energy/opinion/exploring-the-limits-of-eus-unbelievable-behaviour-on-nord-stream-2/.
- 7.
See in this volume, Bent Ole Gram Mortensen, Existing EU Secondary Legislation on (Discriminatory) Treatment of Third Country Investments in the Energy Sector, section 3.
- 8.
Decision No 1364/2006/EC of the European Parliament and of the Council of 6 September 2006 laying down guidelines for trans-European energy networks and repealing Decision 96/391/EC and Decision No 1229/2003/EC, OJ L 262, 22.9.2006, p. 1-23, Annex I, NG.1.
- 9.
See on this: Yafimava (2019).
- 10.
Euractiv (18 September 2019a) ‘We need this dinosaur’: EU lifts veil on gas decarbonisation strategy. Available at: https://www.euractiv.com/section/climate-strategy-2050/news/new-gas-possibilities-in-focus-as-commission-prepares-decarbonisation-strategy/.
- 11.
Nord Stream 2 (10 April 2017) Greenhouse Intensity of Natural Gas Transport – Comparing the Nord Stream 2 Pipeline to LNG Import Alternatives. Available at: https://www.nord-stream2.com/media-info/commentary-analysis/greenhouse-intensity-of-natural-gas-transport-comparing-the-nord-stream-2-pipeline-to-lng-import-alternatives-8/.
- 12.
Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union, OJ L 79I, 21.3.2019, pp. 1–14.
- 13.
Under Article 2(1) of the United Nations Convention on the Law of the Seas (UNCLOS), the Sovereignty of a state extends beyond the land territory over what is defined as the Territorial Sea.
- 14.
Article 58 of the UNCLOS includes the right to lay pipelines in the Exclusive Economic Zone.
- 15.
Wintershall Nederland B.V., Shell Exploration and Production (LXXI) B.V., ENGIE SA, E.ON Global Commodities SE (now UNIPER SE), and PAO Gazprom.
- 16.
Act of 16 February 2007 on Competition and Consumer Protection. Available at: https://www.uokik.gov.pl/competition_protection.php.
- 17.
Office of Competition and Consumer Protection (2016) UOKiK issues objections to a concentration - Nord Stream 2. Available at: https://www.uokik.gov.pl/news.php?news_id=12477.
- 18.
Lang and Westphal (2016), p. 10.
- 19.
Nord Stream 2 AG (2016) Joint Press Release of ENGIE, Gazprom, OMV, Shell, Uniper, Wintershall and Nord Stream 2 AG. Available at: https://www.nord-stream2.com/media-info/news-events/joint-press-release-of-engie-gazprom-omv-shell-uniper-wintershall-and-nord-stream-2-ag-22/.
- 20.
Office of Competition and Consumer Protection (2018) UOKiK against Nord Stream 2. Available at: https://www.uokik.gov.pl/news.php?news_id=14323.
- 21.
Judgment of the General Court (First Chamber, Extended Composition) of 10 September 2019, Poland v Commission, Case T-883/16, ECLI:EU:T:2019:567, para. 62–64.
- 22.
Bekendtgørelse af lov om kontinentalsoklen og visse rørledningsanlæg på søterritoriet (consolidated Act on the Continental Shelf and Certain Pipeline Installations). Available at: https://www.retsinformation.dk/Forms/R0710.aspx?id=202937.
- 23.
OSW (6 December 2017) Nord Stream 2: Denmark’s playing for time. Available at: https://www.osw.waw.pl/en/publikacje/analyses/2017-12-06/nord-stream-2-denmarks-playing-time.
- 24.
Talus (2017b), pp. 380–381.
- 25.
Talus (2017c), pp. 30–42.
- 26.
- 27.
European Commission Press Release (9 June 2017), Commission seeks a mandate from Member States to negotiate with Russia an agreement on Nord Stream 2, IP/17/1571.
- 28.
Council of the European Union (27 September 2017) Opinion of the legal service, Recommendation for a Council decision authorizing the opening of negotiations on an agreement between the European Union and the Russian Federation on the operation of the Nord Stream 2 pipeline, Brussels, 12590/17.
- 29.
Council of the European Union (13 November 2017) Proposal for a Directive of the European Parliament and of the Council amending Directive 2009/73/EC concerning common rules for the internal market in natural gas, Brussels, 2017/0294 (COD).
- 30.
An interconnector is a structure that enables energy flows between networks of different countries.
- 31.
Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC, OJ L 211, 14.8.2009, pp. 94–136, article 2(17).
- 32.
Directive (EU) 2019/692 of the European Parliament and of the Council of 17 April 2019 amending Directive 2009/73/EC concerning common rules for the internal market in natural gas, OJ L 117, 3.5.2019, pp. 1–7, article 2(17).
- 33.
Ibid., article 36(1)(b).
- 34.
Ibid., article 49(a).
- 35.
Case T-526/19, Nord Stream 2 AG v Council and European Parliament.
- 36.
For admissibility under TFEU Article 263, it will have to be shown that the amendment is of direct and individual concern to the applicant. A measure will be of direct concern where it directly affects the legal situation of the applicant and where there is no genuine discretion for the Member State implementing it (Judgment of the General Court (Fourth Chamber, Extended Composition) of 25 October 2011, Microban International and Microban (Europe) v Commission, Case T-262/10, EU:T:2011:623). Individual concern arises, where while a measure is not addressed to the applicant, that measures affects the applicant relative to others, as if it were the addressee of the act (Judgment of the Court of 15 July 1963, Plaumann v Commission, Case C-25/62, EU:C:1963:17). These admissibility criteria are arguably met in the circumstances surrounding the Gas Directive amendment and its effect on the NSP2 pipeline.
- 37.
See for example: Ravluševičius (2011), pp. 1369–1388.
- 38.
The Nord Stream 2 AG has addressed several letters to the European Commission to consult on this matter. See: European Commission, Documents archive. http://trade.ec.europa.eu/doclib/cfm/doclib_section.cfm?sec=802.
- 39.
See: European Commission, Documents archive. https://trade.ec.europa.eu/doclib/html/158069.htm.
- 40.
U.S. Department of the Treasury (2017) Countering America’s Adversaries Through Sanctions Act (sec. 232). Available at: https://www.treasury.gov/resource-center/sanctions/Programs/Pages/caatsa.aspx.
- 41.
U.S. Department of the Treasury (2019) CAATSA/CRIEEA Section 232 Public Guidance. Available at: https://www.state.gov/caatsa-crieea-section-232-public-guidance/.
- 42.
U.S. Congress (2019) Protecting Europe’s Energy Security Act of 2019. Available at: https://www.govtrack.us/congress/bills/116/hr3206.
- 43.
U.S. Congress (2019) Energy Security Cooperation with Allied Partners in Europe Act of 2019. Available at: https://www.govtrack.us/congress/bills/116/s1830.
- 44.
Politico (2 August 2019) EU disunity on US’s anti-Nord Stream 2 push. Available at: https://www.politico.eu/article/eu-disunity-hampers-efforts-to-block-us-pipeline-sanctions/.
- 45.
UN Economic Commission for Europe (2007), pp. 8–9.
- 46.
See on this: Mitchell (2017), pp. 283–303.
- 47.
Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union, OJ L 79I, 21.3.2019, pp. 1–14, recital 1 and 5.
- 48.
Ibid., recital 6.
- 49.
Ibid., Art 4(1)(a) and (c).
- 50.
See for example: Ibid., Art. 4(1)(a) and (c).
- 51.
Consolidated Version of the Treaty on the Functioning of the European Union, OJ C 326, 26.10.2012, pp. 47–390, Art 194(2).
- 52.
- 53.
Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union, OJ L 79I, 21.3.2019, pp. 1–14, Art 6(9).
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Kaech, B., Wüstenberg, M. (2020). Building Pipelines: Experiences with Formal and Informal Screening Mechanisms. In: Hindelang, S., Moberg, A. (eds) YSEC Yearbook of Socio-Economic Constitutions 2020. YSEC Yearbook of Socio-Economic Constitutions, vol 2020. Springer, Cham. https://doi.org/10.1007/16495_2020_23
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