US Sectoral Sanctions

Export Pipeline Sanctions (cont'd) There is a de-facto wind-down period for persons having, not later than 30 days after the 20 Dec. 2019 enactment, engaged in good faith efforts to wind down operations that would otherwise subject the person to the sanctions this could be subject to different interpretations - but in any event Allseas immediately suspended work see also OFAC FAQ 815 of 20 Dec. 2019 in this regard (and State Dept. 27 Dec. 2019 Fact Sheet) Plus typical exception and waiver authorities, including for repair/maintenance / environmental remediation re pipelines, or safety of vessels and crew national security and national interest waivers And a "termination and sunset" provision - which would end the sanctions authority (and any sanctions already imposed) on the earlier of (i) 5 years from enactment or (ii) the date on which the President certifies to Congress that appropriate safeguards have been put in place to minimize Russia's ability to use the pipeline project as a tool of coercion / potential leverage (including by achieving unbundling of energy production/transmission in Europe), and to ensure that the project would not result in a >25% decrease in volume of Russian energy exports transiting through existing pipelines in other countries, particularly Ukraine, relative to the 2018 average monthly volumes (note that the reported Russia-Ukraine gas transit extension agreement for 2020-2024 might serve to satisfy this requirement - will need analysis over time) And see the closely related CAATSA section 232 (slide 53, and the recently updated/ stiffened State Dep't guidance thereon (slide 8) Morgan Lewis 83 63

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