THE SHELL LEAKS FILES — 24 OCTOBER 2026
SLF-2007-097
The Sakhalin Papers LXXXVII: The Port Under Threat — Washington’s Warning of Crushing Sanctions Against a German Harbour
On 5 August 2020, three American senators sent an extraordinary letter to the operators of Mukran Port on Germany’s Baltic coast. The warning extended beyond the port company to its directors, shareholders and employees. The senators threatened devastating financial consequences unless the port stopped supporting Nord Stream 2. The original correspondence, American sanctions legislation, German parliamentary records and contemporaneous reporting reveal an important distinction: the threat was genuine, but some of the powers invoked had not yet been enacted into law.
Archive reference: SLF-2007-097
Publication date: 24 October 2026
Collection: The Sakhalin Papers — Shell, Gazprom and Russia
Previous instalment: SLF-2007-096, The Sakhalin Papers LXXXVI, 23 October 2026
Principal sources: Original letter dated 5 August 2020 from US Senators Ted Cruz, Tom Cotton and Ron Johnson; Protecting Europe’s Energy Security Act of 2019; CAATSA Section 232; US Department of State sanctions guidance; Shell’s authenticated April 2017 financing announcement; contemporaneous Associated Press, Reuters and German reporting; German Bundestag parliamentary records; the German government’s response of October 2020; subsequent US sanctions announcements; and European judicial records concerning the separate regulatory dispute.
Evidence classification: Authenticated correspondence, enacted legislation, official government records, corporate disclosures, contemporaneous journalism, judicial context and separately identified editorial commentary.
INTRODUCTION: A LETTER FROM WASHINGTON TO A SMALL GERMAN PORT
On 5 August 2020, three members of the United States Senate signed a letter addressed to two executives of a German port company.
The recipients were Harm Sievers and Fridjof Ostenberg of Fährhafen Sassnitz GmbH.
The company operated Mukran Port on the Baltic Sea island of Rügen.
The signatories were Senators Ted Cruz of Texas, Tom Cotton of Arkansas and Ron Johnson of Wisconsin.
All three were Republicans.
Their letter concerned the port’s involvement in supporting construction of Nord Stream 2, the controversial natural-gas pipeline intended to connect Russia directly with Germany.
The senators alleged that the port was supplying goods, services and logistical assistance to Russian vessels expected to complete the project.
They demanded that this assistance cease.
The letter warned of “crushing legal and economic sanctions”.
It described potentially devastating consequences for the port’s ability to conduct business through the American financial system.
The warning extended to company directors, corporate officers, shareholders and employees.
It even raised the prospect of shareholder litigation involving billions of dollars.
The letter was not confidential.
On 5 August, Senator Cruz’s office published an official announcement reproducing its contents.
The accompanying press release presented the warning as part of a wider American effort to prevent Nord Stream 2 from being completed.
The document survives on the senator’s official website.
It is therefore possible to examine precisely what was threatened, who made the threats and which legal authorities were invoked.
That examination reveals something important.
The senators relied partly upon sanctions legislation already in force.
But they also referred to additional legislation that had passed the Senate and had not yet become law.
Moreover, the legislation actually in force contained qualifications and exceptions that were not apparent from the letter’s most dramatic language.
The episode illustrates how sanctions pressure can extend beyond the principal participants in an international energy project.
Shell was not the recipient of the letter.
Shell was one of the project’s five European financiers.
But the warning concerned the physical infrastructure and services upon which the project depended.
By August 2020, the dispute had spread far beyond the companies financing the pipeline.
It had reached a German harbour, its management and the people working there.
Primary evidence: Senator Ted Cruz — Original Letter and Press Release, 5 August 2020. Cruz Senate
1. WHY MUKRAN PORT MATTERED
Mukran Port occupies a strategically important position on Germany’s Baltic coast.
Situated near Sassnitz on the island of Rügen, it provides maritime and logistical facilities serving commercial shipping and industrial activities.
During construction of Nord Stream 2, the port became an important logistical base.
Large quantities of concrete-coated steel pipe were stored there.
Specialist vessels associated with the pipeline project also used the harbour.
The port’s significance increased dramatically after December 2019.
Until then, much of Nord Stream 2’s offshore construction had been undertaken using vessels operated by the Swiss-based contractor Allseas.
But Allseas suspended its pipe-laying activities following the introduction of American sanctions targeting certain vessels involved in the project.
This left Nord Stream 2 AG searching for alternative means of completing the remaining offshore sections.
Russian pipe-laying vessels consequently assumed greater importance.
Two vessels were particularly relevant.
One was Fortuna, a Russian-flagged pipe-laying barge.
The other was Akademik Cherskiy, a specialist pipe-laying vessel.
By May 2020, shipping data and contemporary reporting placed Akademik Cherskiy at or near Mukran.
Reuters reported on 18 May that the vessel had reached the German logistics hub after travelling from the Russian Far East.
S&P Global had already reported its arrival in the area on 11 May.
The significance was obvious.
If Russia could replace the services previously supplied by Allseas, construction might resume despite American sanctions.
Mukran was therefore not merely a harbour storing unused pipes.
It had become part of the logistical arrangements through which the remaining pipeline might be completed.
The American senators’ subsequent intervention was directed at that connection.
Contemporaneous evidence: Reuters, 18 May 2020 — Russian Pipe-Laying Vessel Reaches German Logistics Hub and S&P Global, 11 May 2020 — Akademik Cherskiy Approaches Mukran. MarineLink
2. THE SHELL CONNECTION: €950 MILLION IN PROJECT FINANCING
Shell’s relationship with Nord Stream 2 is established by its own corporate records.
On 24 April 2017, Royal Dutch Shell announced that it had signed financing agreements alongside ENGIE, OMV, Uniper and Wintershall.
Each company committed financing and guarantees worth up to approximately €950 million.
The overall estimated project cost was €9.5 billion.
Gazprom remained the sole shareholder of Nord Stream 2 AG.
Shell’s participation was therefore financial rather than an equity investment in the project company.
Its original announcement described a long-term funding facility of €285 million, alongside additional potential financing and guarantees of up to €665 million.
This is relevant to the Mukran Port episode because it establishes the relationship between the different participants.
Shell and the other European lenders were supporting the project financially.
Nord Stream 2 AG was responsible for developing and constructing the pipeline.
Mukran Port was providing services associated with construction.
The companies occupied different positions within the project.
They did not necessarily have identical contractual obligations or sanctions exposure.
Shell’s subsequent financial disclosures confirmed that its final Nord Stream 2 loan instalments were made during the second quarter of 2020.
Those instalments preceded the senators’ August letter.
There is no evidence in the documents examined that Shell instructed the senators, directed the port’s activities or controlled the decisions made by Fährhafen Sassnitz GmbH.
The connection is therefore commercial and historical.
The financiers and the port were supporting different aspects of the same Gazprom-owned infrastructure project.
Authenticated corporate sources: Shell — 2017 Corporate Press Releases, page 40 and Shell — Fourth Quarter 2022 Financial Results, Nord Stream 2 Disclosure. Shell
3. DECEMBER 2019: THE FIRST SANCTIONS LAW
The relevant American legislative framework began before the senators’ letter.
On 20 December 2019, President Donald Trump signed the National Defense Authorization Act for Fiscal Year 2020.
Title LXXV contained the Protecting Europe’s Energy Security Act of 2019, commonly known as PEESA.
The legislation targeted certain activities involving vessels used to construct Nord Stream 2 and TurkStream.
Section 7503 required the US Secretary of State, in consultation with the Secretary of the Treasury, to identify vessels engaged in qualifying pipe-laying activities and foreign persons knowingly providing those vessels or facilitating specified transactions.
The legislation contained mandatory sanctions consequences for persons identified under its provisions.
These included restrictions concerning entry into the United States and the blocking of relevant property.
But the statutory language was specific.
It addressed vessels engaged in pipe-laying at depths of at least 100 feet below sea level.
It also addressed identified foreign persons whose conduct satisfied the relevant legal requirements.
The statute did not simply declare that every employee of every company providing any service associated with Nord Stream 2 would automatically be sanctioned.
Nor did it eliminate the need for the appropriate authorities to make the required determinations.
The legislation also contained exceptions.
Certain supplies intended to protect the safety of crews or prevent environmental damage were expressly excluded.
There were provisions concerning qualifying wind-down activity and presidential waivers.
These details matter because the senators’ subsequent letter used considerably broader language.
Primary statutory record: Public Law 116-92, Title LXXV, Section 7503 — Protecting Europe’s Energy Security Act of 2019. See particularly Section 7503(a)–(f). GovInfo
4. JUNE 2020: CONGRESS PROPOSES EXPANDING THE SANCTIONS
The original legislation had disrupted construction.
But it had not permanently prevented Russia from seeking alternative vessels.
American legislators therefore proposed further measures.
On 4 June 2020, Senators Ted Cruz and Jeanne Shaheen announced legislation intended to clarify and expand the existing sanctions regime.
They were joined by Senators John Barrasso, Tom Cotton and Ron Johnson.
The proposed legislation targeted additional activities associated with pipe-laying vessels.
These included certain forms of insurance, servicing and logistical assistance.
The proposal specifically referred to port facilities and related services.
Its objective was to make it harder for Nord Stream 2 to obtain the commercial support necessary to complete construction.
The distinction between proposed and enacted legislation is particularly important.
The Senate subsequently incorporated the expanded provisions into its version of the Fiscal Year 2021 National Defense Authorization Act.
That version passed the Senate on 23 July 2020.
But passage of a bill by one chamber does not, by itself, make its provisions federal law.
Further legislative steps remained necessary.
The expanded provisions were not enacted until 1 January 2021, when the Fiscal Year 2021 National Defense Authorization Act became law.
Consequently, the expanded statutory language concerning port facilities had not yet become operative law when the senators wrote to Mukran on 5 August 2020.
This is an important historical qualification.
The senators could legitimately refer to legislation they supported and expected to become law.
They could also warn that existing legislation and administrative guidance might already create sanctions exposure.
But those were distinct propositions.
A proposed expansion of sanctions authority was not the same as authority already enacted.
Official sources: Senator Ted Cruz — Announcement of Expanded Sanctions Legislation, 4 June 2020 and US Department of State — PEESA as Amended, 9 April 2021. Cruz Senate
5. JULY 2020: A SECOND ROUTE TO SANCTIONS
The proposed expansion of PEESA was not the only source of American pressure.
On 15 July 2020, the State Department revised its guidance under Section 232 of CAATSA.
As examined in yesterday’s instalment, the revision removed important grandfathering language previously associated with contracts concluded before 2 August 2017.
The change broadened the intended application of Section 232 to Nord Stream 2 and certain related activities.
The State Department identified financing partners and providers of other forms of support among the categories potentially affected.
For the operators of Mukran Port, this created an additional area of uncertainty.
Even where a particular service was not clearly covered by the original PEESA provisions, American authorities might consider whether the activity fell within CAATSA Section 232.
But another legal distinction must be preserved.
Unlike the mandatory language used in parts of PEESA, Section 232 of CAATSA authorised discretionary sanctions.
The statutory provision states that the President may impose specified sanctions when the necessary conditions are satisfied.
It did not automatically require sanctions against every person providing services to Nord Stream 2.
The senators’ August letter invoked both sanctions frameworks.
A careful examination must therefore distinguish the separate legal authorities rather than treat them as interchangeable.
The possibility of sanctions was real. Their application was not automatic merely because three senators had issued a warning.
Statutory source: 22 USC §9526 — CAATSA Section 232. Legal Information Institute
6. 5 AUGUST 2020: THE LETTER ARRIVES
The original correspondence was addressed to Harm Sievers and Fridjof Ostenberg.
It identified Fährhafen Sassnitz GmbH as the operator of Mukran Port.
The senators alleged that the port was knowingly providing significant assistance to Nord Stream 2.
They specifically named Fortuna and Akademik Cherskiy.
The letter asserted that the harbour was storing pipeline sections and supplying services to vessels expected to undertake the remaining construction.
It then warned of potentially devastating sanctions consequences.
The senators stated that continued assistance could threaten the company’s commercial and financial future.
Their language extended beyond the company itself.
They warned of consequences affecting directors, officers, shareholders and employees.
The correspondence also discussed possible American visa restrictions, property blocking and restrictions on transactions involving the United States.
The senators urged the company to stop supporting the pipeline.
These statements establish the seriousness of the warning.
But they must be classified correctly.
The letter was an intervention by three legislators. It was not a sanctions designation issued by the Treasury Department or a judicial finding of unlawful conduct.
The senators were presenting their interpretation of the applicable and anticipated sanctions regimes.
The document proves what they threatened.
It does not prove that every consequence described was legally inevitable.
Original document: Senator Cruz’s Official Website — Full Text of the 5 August 2020 Letter. Cruz Senate
7. AN EXTRAORDINARY ADDITION: THE THREAT OF SHAREHOLDER LAWSUITS
One passage in the letter deserves particular attention.
The senators warned that continued participation could expose the company to shareholder litigation.
They suggested that such proceedings could involve billions of dollars and alleged breaches of fiduciary duty.
This was an unusually far-reaching claim.
The company was a German business operating a port in Germany.
Its corporate duties, contractual obligations and potential shareholder liabilities would depend upon the applicable legal framework and the specific circumstances.
An American senator’s warning does not establish that a German company has breached duties owed to its shareholders.
Nor does it establish that shareholders possess a viable claim for billions of dollars.
Such conclusions would require an appropriate legal basis and, if contested, determination by a competent court.
No such finding is established by the documents examined for this instalment.
The passage nevertheless illustrates the pressure being applied.
The senators were not restricting themselves to the possibility of official American sanctions.
They were also raising the prospect of private litigation against the port’s management.
This broadened the potential consequences being presented to the recipients.
The distinction between a predicted lawsuit and an actual legal proceeding is essential.
The letter threatened shareholder litigation. It did not establish that such litigation had been commenced or that a court had found wrongdoing.
The warning therefore belongs in the historical record as a documented threat, not an adjudicated legal consequence. Cruz Senate
8. THE MOST IMPORTANT LEGAL DISTINCTION: WERE ALL EMPLOYEES REALLY EXPOSED?
The original PEESA legislation provides an opportunity to test the senators’ language against the law as enacted in December 2019.
Section 7503(b) addresses immigration-related sanctions.
Its provisions apply to specified foreign persons identified under the legislation.
They also extend to certain corporate officers and principal shareholders holding controlling interests.
The relevant statutory categories are therefore identifiable.
They are not identical to a general reference to every shareholder and employee.
Section 7503(c) concerns blocking the property of identified persons.
Again, the statute requires the relevant identification and determination.
Section 7503(e) contains exceptions.
These include supplies intended for the safety and care of vessel crews, the protection of life and the prevention of significant environmental damage.
The original legislation therefore did not make all ordinary provisioning automatically sanctionable.
This does not establish that Mukran’s commercial services were necessarily exempt.
Certain activities might have fallen within the sanctions provisions.
Additional authorities could also have been relevant.
But the legal position depended upon the nature of the service, the identity of the person involved and the applicable statutory conditions.
The senators’ warning should therefore be understood as a broad presentation of potential consequences.
It was not a substitute for the statutory requirements.
The distinction is particularly important where employees are concerned.
A person working for a company potentially exposed to sanctions is not automatically subject to every sanction applicable to an identified foreign person.
The original law required a more precise analysis than the senators’ warning might have suggested.
Statutory evidence: Public Law 116-92, Section 7503(b)–(e). GovInfo
9. THE GERMAN OWNERSHIP COMPLICATION
Mukran’s position was politically sensitive for another reason.
Fährhafen Sassnitz GmbH was not simply an independently owned private business.
Contemporaneous reporting identified its owners as the town of Sassnitz and the German state of Mecklenburg-Western Pomerania.
The state held a minority interest, reported at approximately 10%.
The involvement of public shareholders made the American warning particularly contentious.
The port was situated within the parliamentary constituency of Chancellor Angela Merkel.
The dispute therefore touched several levels of German government.
Local authorities had an interest in the port’s commercial activities.
The state government had an ownership interest.
The federal government was responsible for German foreign relations.
Meanwhile, American legislators were attempting to influence the port’s conduct through the threat of sanctions.
This created a complex question concerning the extraterritorial effects of American law.
The United States maintained that Nord Stream 2 raised national-security concerns.
German authorities disputed Washington’s use of sanctions pressure against companies operating under German and European law.
These positions reflected a genuine transatlantic disagreement.
Neither position, standing alone, constitutes a judicial determination of the legality of the particular sanctions threatened.
Contemporaneous reporting: Associated Press, 6 August 2020 — US Senators Take Aim at German Port. The Washington Post
10. 6 AUGUST 2020: THE STORY BECOMES INTERNATIONAL NEWS
The senators’ letter quickly attracted international attention.
On 6 August 2020, Associated Press correspondent Frank Jordans reported the development from Berlin.
The report identified the senators, the recipient company and the Russian vessels involved.
It also placed the letter within the broader dispute over American sanctions against Nord Stream 2.
The Associated Press account recorded that officials at Fährhafen Sassnitz had declined to comment.
That is an important evidential detail.
The existence of the senators’ allegations was independently reported.
But the port company had not publicly confirmed the senators’ interpretation of its legal position.
German newspaper Handelsblatt also examined the correspondence.
Its report described the senators’ warning of serious financial consequences if the port continued assisting Nord Stream 2.
German news agency dpa and other publications reported strong reactions from political figures.
These reports establish that the correspondence was publicly known and controversial within Germany.
They also show that the dispute was no longer confined to specialist sanctions lawyers or energy executives.
The threatened consequences were now being debated as a matter of German sovereignty, commercial independence and relations with the United States.
Contemporaneous sources: Associated Press, 6 August 2020 and Handelsblatt — US Senators Threaten German Port, 6 August 2020. The Washington Post
11. 10 AUGUST 2020: BERLIN REJECTS THE WARNING
The German government’s reaction was explicit.
On 10 August 2020, government spokesman Steffen Seibert addressed the matter at a press conference in Berlin.
He reiterated the government’s opposition to extraterritorial American sanctions.
Germany’s Foreign Ministry also rejected the legal legitimacy of such measures as applied to German and European companies.
Contemporaneous reporting recorded that Foreign Minister Heiko Maas had raised the issue with US Secretary of State Mike Pompeo.
These responses were significant.
The German government was not simply questioning whether Nord Stream 2 was commercially desirable.
It was challenging the use of American sanctions threats against companies conducting activities in Germany.
The dispute concerned the reach of national sanctions legislation beyond the territory of the state imposing it.
For the United States, the relevant concern was the potential geopolitical influence Russia could obtain through additional gas infrastructure.
For Germany, the immediate concern was the application of American restrictions to German commercial activities.
Both perspectives formed part of the documented diplomatic controversy.
But they should be attributed to the governments advancing them.
The legal dispute over extraterritorial sanctions was not resolved merely because German officials rejected the American position.
Contemporaneous source: Anadolu Agency, 10 August 2020 — Berlin Rejects US Sanctions Threat Against Mukran Port. Anadolu Agency
12. SEPTEMBER 2020: THE GERMAN PARLIAMENT EXAMINES THE LETTER
One of the most valuable documents in this episode comes from the German Bundestag.
On 9 September 2020, the parliament published a notice concerning a formal parliamentary question submitted by members of Alliance 90/The Greens.
The parliamentary document was numbered 19/22027.
Its subject was the American sanctions threat against Fährhafen Sassnitz.
The members referred specifically to the letter from Senators Cruz, Cotton and Johnson.
They asked how the German government intended to respond.
Their questions concerned the legal implications of extraterritorial American sanctions and the possibility of coordinated action with European institutions.
This establishes that the incident had entered Germany’s formal parliamentary record.
It was no longer simply a dispute between American politicians and a port company.
It had become a matter requiring an official response from the federal government.
The parliamentary notice also records the senators’ references to the expanded sanctions provisions contained in the Senate’s July 2020 legislation.
Here, again, care is required.
The parliamentary record describes the senators’ position.
It does not convert the Senate-passed legislation into law as of August 2020.
Authenticated parliamentary source: German Bundestag — US Sanctions Threat Against Sassnitz Port, 9 September 2020. Deutscher Bundestag
13. 6 OCTOBER 2020: A REVEALING GERMAN GOVERNMENT RESPONSE
The German government’s formal answer is particularly important.
On 6 October 2020, the Bundestag published a summary of the government’s response.
The underlying document was numbered 19/22563.
The government confirmed that it was discussing the American sanctions threats with Washington.
It also stated that Germany was coordinating its approach with European partners, the European External Action Service and the European Commission.
Most significantly, the government expressed the expectation that the Sassnitz port company could continue operating despite the American threats.
This was an official government position.
It was not a court judgment guaranteeing immunity from future sanctions.
Nor did it establish that American authorities could never impose restrictions upon particular activities.
But it demonstrated that the German government was not accepting the senators’ warning as an inevitable determination of the port’s legal fate.
The response also distinguished between business activities lawful under European domestic arrangements and the potentially extraterritorial effects of American sanctions.
Germany reiterated its opposition to unilateral measures targeting German and European companies.
This provides an important documentary counterpoint to the senators’ letter.
Washington’s legislators warned that continued assistance could threaten the port’s survival.
Berlin maintained that the company should be able to continue its operations.
The competing positions are preserved in official records.
The correspondence establishes the threat. The Bundestag record establishes the German government’s refusal to accept its inevitability.
Primary parliamentary source: German Bundestag — Government Response to US Sanctions Threat, 6 October 2020. Deutscher Bundestag
14. OCTOBER 2020: WASHINGTON CLARIFIES THE RULES AGAIN
The sanctions story did not end with the senators’ August letter.
On 20 October 2020, the US Department of State issued further guidance concerning PEESA.
The guidance was subsequently published in the Federal Register on 5 November 2020.
It addressed how the Department interpreted the provision of vessels for pipeline construction.
The guidance adopted an expansive interpretation.
It explained that certain goods or services necessary or essential to the operation of qualifying pipe-laying vessels could fall within the sanctions framework.
These could include services or facilities supporting equipment upgrades.
The guidance was important because it provided more specific administrative interpretation of the existing legislation.
It also addressed wind-down arrangements.
The Department indicated that qualifying persons who immediately commenced and completed a good-faith wind-down within the prescribed period would not be sanctioned under the clarified interpretation.
This represented another development in the evolving sanctions environment.
But the timing matters.
The guidance became effective on 20 October 2020.
It was issued more than two months after the senators’ letter.
It should therefore not be treated as an administrative clarification already in force when they wrote on 5 August.
The same principle applies to the subsequent statutory amendments enacted in January 2021.
The historical sequence must be kept intact.
Primary document: Federal Register — PEESA Guidance Effective 20 October 2020, Published 5 November 2020. GovInfo
15. JANUARY 2021: THE PROPOSED EXPANSION FINALLY BECOMES LAW
The expanded sanctions provisions referred to by the senators ultimately became part of enacted federal law.
On 1 January 2021, the Fiscal Year 2021 National Defense Authorization Act became law.
Section 1242 amended PEESA.
The amendments broadened the categories of activities associated with qualifying pipe-laying vessels that could trigger sanctions.
These included certain forms of support, insurance, services and facilities.
The Department of State subsequently published guidance explaining the amended legislation.
This provides a useful retrospective comparison.
In August 2020, the senators were warning Mukran Port partly by reference to legislative changes that were still passing through Congress.
By January 2021, those amendments had been enacted.
But the later enactment does not mean the amendments possessed legal force on the earlier date.
Historical analysis must distinguish the law applicable at the time of a warning from legislation adopted subsequently.
For anyone investigating how the sanctions campaign developed, this is a central point.
American policy was becoming progressively more restrictive.
The statutory framework was changing.
Administrative interpretation was also expanding.
The threat to companies supplying services to Nord Stream 2 therefore evolved over time.
It was not a single, unchanging legal regime.
Official record: US Department of State — Protecting Europe’s Energy Security Act as Amended, 9 April 2021. U.S. Department of State
16. THE COURT RECORD: A SEPARATE DISPUTE MUST NOT BE CONFUSED WITH SANCTIONS
Nord Stream 2 also generated extensive litigation concerning European gas-market regulation.
Those proceedings are relevant to the wider documentary history, but they must be distinguished from the American sanctions dispute.
On 12 July 2022, the Court of Justice of the European Union delivered judgment in Case C-348/20 P, Nord Stream 2 AG v European Parliament and Council.
The case concerned the admissibility of the pipeline company’s challenge to EU gas-market legislation.
The Court set aside important aspects of an earlier decision that had prevented the company’s challenge from proceeding.
The judgment addressed access to judicial review and the application of European regulatory requirements.
It did not determine the legality of the American senators’ letter.
It did not decide whether Mukran Port had breached American sanctions legislation.
And it did not establish that any threatened sanctions against port employees were lawful.
The European proceedings concerned a separate legal dispute.
The distinction is important because the Nord Stream 2 project faced several simultaneous legal challenges.
Those challenges included European regulation, international investment arbitration and American sanctions.
A judicial finding in one proceeding cannot automatically be transferred to another.
Judicial source: Court of Justice of the European Union — Case C-348/20 P, Judgment of 12 July 2022. EUR-Lex
17. WERE THE THREATENED SANCTIONS ACTUALLY IMPOSED?
This is perhaps the most important question when assessing the senators’ warning retrospectively.
The August 2020 letter threatened substantial sanctions consequences for Fährhafen Sassnitz GmbH and associated individuals.
But a threatened sanction and an imposed sanction are different events.
The available official American records identify subsequent sanctions against persons and vessels associated with Nord Stream 2.
For example, on 20 August 2021, the State Department announced sanctions against additional Russian persons and vessels involved in the project.
On 23 February 2022, the United States imposed sanctions upon Nord Stream 2 AG and its chief executive, Matthias Warnig, following the termination of earlier waivers.
These were actual government actions.
They were not simply warnings by legislators.
However, the official sanctions announcements examined for this instalment do not establish that Fährhafen Sassnitz GmbH itself was designated under PEESA as a consequence of the August 2020 letter.
Nor do they establish that its employees were collectively subjected to the sanctions threatened by the senators.
This is a carefully limited conclusion.
It should not be interpreted as a comprehensive certification that no company associated with the harbour ever encountered sanctions-related restrictions or commercial difficulties.
A definitive determination would require an exhaustive examination of relevant designation records and any other applicable measures.
But the evidence currently examined supports an important distinction.
The threat against Mukran Port is documented. The specific sanctions consequences threatened against the port company and its employees are not established as having been imposed.
Official sources: US State Department — Nord Stream 2 Sanctions Announcement, 20 August 2021 and Federal Register — Nord Stream 2 Sanctions Actions, 2022. U.S. Department of State
18. THE CONSEQUENCES FOR SHELL’S INVESTMENT
Shell’s eventual financial loss provides the wider commercial context.
The company had committed substantial financing to Nord Stream 2 in April 2017.
Its final loan instalments were made during the second quarter of 2020.
The following months saw continued American sanctions pressure against the project’s construction and supporting services.
In February 2022, Russia’s full-scale invasion of Ukraine fundamentally changed the geopolitical environment.
Germany suspended Nord Stream 2’s certification process.
Shell announced its intention to end its involvement in the project and withdraw from its Russian ventures.
In its subsequent financial reporting, Shell confirmed a full write-down of its Nord Stream 2 loan.
The amount was $1.126 billion.
It would be incorrect to suggest that the August 2020 letter to Mukran Port directly caused that write-down.
The financial loss arose in the context of the much broader crisis affecting the project in 2022.
Nevertheless, the letter forms part of the earlier history of increasingly difficult conditions surrounding construction.
It demonstrates how American sanctions pressure was being applied to the companies and infrastructure needed to finish the pipeline.
For financiers, construction risk and repayment risk were connected.
A pipeline unable to reach commercial operation might be unable to generate the expected revenues.
The project’s financiers therefore had an interest in its completion, even though they did not directly control every contractor or service provider.
The Mukran episode illustrates that exposure.
Shell financed the project. Mukran supported its construction. American sanctions pressure targeted the activities needed to complete it.
Those facts are established.
The precise financial consequences of the senators’ letter for Shell are not.
Authenticated Shell disclosure: Shell plc — Fourth Quarter 2022 and Full-Year Results, Nord Stream 2 Section. GCS Shell
DOCUMENTARY FINDINGS
ESTABLISHED FACTS
On 5 August 2020, Senators Ted Cruz, Tom Cotton and Ron Johnson sent a letter to Fährhafen Sassnitz GmbH.
The letter was published on Senator Cruz’s official website.
It concerned the port company’s alleged support for Nord Stream 2 construction.
The senators specifically identified Fortuna and Akademik Cherskiy.
They warned of severe sanctions consequences affecting the company and associated individuals.
The correspondence also raised the possibility of shareholder litigation.
The original PEESA legislation had been enacted on 20 December 2019.
Additional legislation expanding sanctions coverage had been introduced in June 2020.
The Senate had passed its version of the expanded legislation by 23 July 2020.
The expanded provisions had not yet become law on 5 August 2020.
CAATSA Section 232 separately authorised discretionary sanctions for specified activities associated with Russian energy export pipelines.
The original PEESA legislation contained defined categories of potentially sanctioned persons, as well as exceptions and waiver provisions.
The German government publicly rejected the application of unilateral extraterritorial American sanctions against German and European companies.
The Bundestag formally examined the threatened sanctions.
In October 2020, the German government stated that it expected the Sassnitz port company to be able to continue operating.
Further American sanctions guidance became effective on 20 October 2020.
The expanded PEESA provisions were enacted on 1 January 2021.
Shell was one of five European companies that had financed Nord Stream 2.
Shell subsequently wrote down its $1.126 billion loan in the first quarter of 2022.
ALLEGATIONS AND CONTESTED POSITIONS
The senators alleged that Fährhafen Sassnitz GmbH was knowingly providing significant assistance to Nord Stream 2.
They maintained that continued activities could trigger severe American sanctions.
They also suggested that directors and other parties could face substantial shareholder litigation.
These were assertions and warnings contained in the original correspondence.
They were not findings made by a court.
The American government maintained that Nord Stream 2 presented a threat to European energy security and strengthened Russian geopolitical influence.
German authorities opposed Washington’s application of extraterritorial sanctions to German commercial activities.
The competing positions were publicly documented.
The legal validity of every threatened consequence cannot be established merely from the existence of those statements.
MATTERS NOT ESTABLISHED
The examined record does not establish that Fährhafen Sassnitz GmbH was designated for sanctions under PEESA as a result of the August 2020 letter.
It does not establish that all port employees became subject to American sanctions.
It does not establish that the proposed statutory amendments already possessed legal force when the letter was sent.
It does not establish that the threatened shareholder litigation was commenced or succeeded.
It does not establish that a court found the port company or its directors had breached fiduciary duties.
It does not establish that Shell directed the port’s activities or controlled the response to the senators.
It does not establish that Shell violated American sanctions legislation.
And it does not establish that the August 2020 warning caused Shell’s subsequent financial impairment.
These limitations are fundamental to the reliability of the historical record.
EDITORIAL COMMENTARY: WHEN FOREIGN POLICY REACHES THE HARBOUR GATE
The Mukran Port episode illustrates a problem that extends far beyond Nord Stream 2.
International sanctions are often discussed as measures directed against governments, major corporations or financial institutions.
Their practical effects can reach much smaller businesses.
A port operator may not determine the geopolitical strategy behind a pipeline.
It may not own the infrastructure being constructed.
It may have no control over the political decisions of the governments involved.
Nevertheless, its facilities can become important to the success or failure of an international project.
That was Mukran’s position in August 2020.
The harbour provided logistical support associated with a controversial pipeline.
American legislators regarded that support as an obstacle to their efforts to stop construction.
German officials regarded the threatened sanctions as an unacceptable extension of American authority into European commercial affairs.
The documentary record supports the existence of both positions.
It also demonstrates the importance of distinguishing legislation from political warnings.
Three senators could issue a forcefully worded letter.
They could cite existing law.
They could introduce legislation designed to expand sanctions.
They could exert political pressure upon the executive branch.
But they could not, merely by sending correspondence, establish that every threatened sanction had become legally inevitable.
The actual statutory provisions still mattered.
So did the date on which proposed amendments became law.
So did the specific conduct of the companies concerned.
And so did the distinction between discretionary sanctions authority and mandatory consequences following the required official determinations.
This is why the original letter is such a valuable archival document.
It preserves the language used to exert pressure.
The legislation provides a means of testing that language.
The German parliamentary records preserve the response.
And the later sanctions announcements allow threatened measures to be compared with actual government actions.
That is what a documentary archive should make possible.
The wider Nord Stream 2 history is often presented as a confrontation involving Washington, Berlin and Moscow.
But the supporting records reveal a much more complicated network of participants.
There were financiers such as Shell.
There were construction contractors such as Allseas.
There were pipe-laying vessels.
There were insurers, certification bodies and engineering companies.
And there were port operators providing the practical facilities upon which construction depended.
Each occupied a different position.
Each faced different commercial and legal risks.
The fact that these participants supported the same project did not make their obligations identical.
Nor did it mean that a warning directed at one could automatically be treated as a finding against another.
For Shell shareholders, the lesson concerns the extended reach of major infrastructure investments.
A financial commitment may expose investors to circumstances arising far beyond their own immediate operations.
Those circumstances can include regulatory decisions, international litigation, political pressure and sanctions affecting third-party contractors.
The eventual financial result may emerge years after the original investment decision.
But understanding that result requires examining the intervening events.
The senators’ letter to Mukran Port is one such event.
It deserves preservation because it documents the extent to which political pressure was being directed at the supporting infrastructure of Nord Stream 2.
It also demonstrates the limits of what can responsibly be concluded from such pressure.
The existence of a threat is a historical fact. The inevitability, legality and actual implementation of its threatened consequences are separate evidential questions.
The distinction remains essential when examining Shell’s involvement in Russia.
It allows the archive to acknowledge the seriousness of the American sanctions campaign without attributing unsupported wrongdoing to Shell or other companies.
And it permits the original documents to speak with greater authority than retrospective assumptions.
SOURCE RECORD AND DOCUMENTARY PROVENANCE
The following records provide the principal evidential foundation for this instalment.
1. US Senators Ted Cruz, Tom Cotton and Ron Johnson — 5 August 2020
Original correspondence addressed to Fährhafen Sassnitz GmbH, reproduced on Senator Cruz’s official website. This is the central primary document. It identifies the port company, vessels, threatened sanctions and requested cessation of services.
Original Senate Letter and Press Release
2. United States Congress — 20 December 2019
Public Law 116-92, Title LXXV, Protecting Europe’s Energy Security Act of 2019. Section 7503 establishes the original vessel-related sanctions provisions, reporting requirements, specified affected persons, exceptions and waivers.
Original Enacted Legislation — PEESA 2019
3. US Senators Ted Cruz and Jeanne Shaheen — 4 June 2020
Official announcement of proposed legislation expanding PEESA to cover additional pipe-laying activities and services, including certain port facilities.
Announcement of Expanded Sanctions Legislation
4. Royal Dutch Shell plc — 24 April 2017
Original corporate announcement confirming Shell’s Nord Stream 2 financing agreement alongside ENGIE, OMV, Uniper and Wintershall. The document appears on page 40 of Shell’s official 2017 press release collection.
Shell Corporate Press Releases 2017
5. Associated Press — 6 August 2020
Contemporaneous reporting by Frank Jordans describing the senators’ warning, Mukran Port’s role, the vessels involved and initial German reactions.
Associated Press — US Senators Take Aim at German Port
6. S&P Global — 11 May 2020
Contemporaneous reporting concerning Akademik Cherskiy’s arrival near Mukran and the storage of Nord Stream 2 pipe at the German logistics base.
S&P Global — Russian Pipe-Laying Vessel Approaches Mukran
7. German Federal Government — 10 August 2020
Contemporaneous reporting of government spokesman Steffen Seibert’s rejection of extraterritorial American sanctions and the Foreign Ministry’s position.
Berlin Rejects US Sanctions Threat Against Mukran Port
8. German Bundestag — 9 September 2020
Parliamentary record concerning questions submitted by Alliance 90/The Greens about the threatened sanctions against Fährhafen Sassnitz GmbH. Parliamentary document 19/22027.
Bundestag — US Sanctions Threat Against Sassnitz
9. German Bundestag — 6 October 2020
Official summary of the federal government’s response, document 19/22563. Confirms German diplomatic engagement and the government’s position that the port company should be able to continue operating.
Bundestag — German Government’s Formal Response
10. United States Department of State — Guidance Effective 20 October 2020
Federal Register notice published 5 November 2020 explaining the expanded interpretation of certain vessel-related activities under PEESA and providing additional guidance on wind-down arrangements.
Federal Register — October 2020 PEESA Clarification
11. United States Department of State — 9 April 2021
Official guidance concerning PEESA following the statutory amendments enacted on 1 January 2021.
US State Department — PEESA as Amended
12. Court of Justice of the European Union — 12 July 2022
Case C-348/20 P, Nord Stream 2 AG v European Parliament and Council. Included as judicial context concerning the separate European regulatory dispute. The judgment did not determine the legality of the American sanctions threatened against Mukran Port.
European Court Judgment — Case C-348/20 P
13. Shell plc — Financial Results Published 2 February 2023
Authenticated corporate disclosure confirming completion of Shell’s Nord Stream 2 loan instalments during the second quarter of 2020 and the full $1.126 billion write-down recognised during the first quarter of 2022.
Shell — Fourth Quarter 2022 and Full-Year Results
Documentary disclaimer: This instalment distinguishes authenticated correspondence, enacted legislation, government announcements, judicial records and corporate disclosures from political allegations, threatened penalties and editorial interpretation. The senators’ letter is evidence of the warnings issued, not proof that the recipients violated American law or that all threatened consequences were legally inevitable. The 2020 legislative proposals are distinguished from provisions enacted in January 2021. No finding is made that Fährhafen Sassnitz GmbH, its directors or employees committed sanctions violations, or that Shell directed the port’s conduct or violated applicable sanctions legislation. The separate European judicial proceedings discussed here did not determine the legality of the American sanctions threats. Factual corrections, additional authenticated records and responses from the parties concerned remain welcome.
The website’s general disclaimer also applies.
NEXT IN THE SHELL LEAKS FILES
SLF-2007-098 — The Sakhalin Papers LXXXVIII: The Thirty-Day Exit — Washington’s October 2020 Sanctions Clarification and the Companies Caught Between Two Legal Systems
The next instalment will examine what happened after the senators’ warning.
On 20 October 2020, the US Department of State issued new guidance under the Protecting Europe’s Energy Security Act.
The guidance broadened Washington’s interpretation of the services and facilities potentially covered by sanctions.
It also offered a limited opportunity for qualifying companies to withdraw from activities that might otherwise expose them to penalties.
The distinction between continuing commercial obligations and terminating them lawfully was becoming increasingly important.
For businesses supporting Nord Stream 2, the questions were difficult.
Could existing contracts be fulfilled safely?
Could services be discontinued without breaching contractual obligations?
What happened when American sanctions policy conflicted with commercial arrangements governed by European law?
And what protection, if any, was available to the companies, directors and employees caught between the competing legal systems?
The next investigation will examine the October 2020 Federal Register notice, the subsequent January 2021 amendments to PEESA, European government responses and contemporary corporate disclosures.
It will also return to the role of Mukran Port and the specialised vessels needed to complete the pipeline.
The objective will be to distinguish the legal requirements actually imposed from the broader political pressure surrounding them.
Because the August warning was not the end of the American campaign.
It was part of a sequence in which threatened sanctions, administrative guidance and enacted legislation progressively changed the risks facing the companies involved.
First came the warning.
Then came the revised guidance.
And finally, Congress expanded the law itself.
The Sakhalin Papers continue.
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