[Federal Register Volume 86, Number 70 (Wednesday, April 14, 2021)]
[Notices]
[Pages 19684-19686]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-07662]


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DEPARTMENT OF STATE

[Public Notice 11405]


Notice of Updated Department of State Public Guidance for the 
Protecting Europe's Energy Security Act (PEESA), as Amended

ACTION: Notice.

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SUMMARY: The Protecting Europe's Energy Security Act (PEESA) was 
amended by the FY21 National Defense Authorization Act (NDAA) on 
January 1, 2021. The Department of State is issuing updated, clarifying 
public guidance and Frequently Asked Questions (FAQs) for PEESA, as 
amended, on April 09, 2021, to provide public notice of the

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Administration's implementation of PEESA, as amended, and the range of 
activities captured under the amended legislation.

DATES: Applicable Date: The public guidance and associated FAQs for 
PEESA, as amended, is effective on April 9, 2021.

ADDRESSES: The Department of State will publish the PEESA, as amended, 
public guidance and associated FAQs, on its website, replacing the 
October 2020 PEESA public guidance (https://www.state.gov/protecting-europes-energy-security-act-peesa/).

FOR FURTHER INFORMATION CONTACT: 
    Email [email protected].

SUPPLEMENTARY INFORMATION:

Frequently Asked Questions on PEESA, as Amended by the National Defense 
Authorization Act for FY2021

    The Department of State is committed to fully implementing 
sanctions authorities in the Protecting Europe's Energy Security Act of 
2019 (``PEESA'' or ``the Act,'' Title LXXV, National Defense 
Authorization Act for Fiscal Year 2020, Pub. L. 116-92), as amended on 
January 1, 2021 by the National Defense Authorization Act for FY2021 
(FY2021 NDAA), Public Law 116-283. PEESA (Sec. 7503 of FY2020 NDAA), as 
amended (by FY2021 NDAA Sec. 1242). We continue to call on Russia to 
cease using its energy resources for coercive purposes. Russia uses its 
energy export pipelines to create national and regional dependencies on 
Russian energy supplies, leveraging these dependencies to expand its 
political, economic, and military influence, weaken European security, 
and undermine U.S. national security and foreign policy interests. 
These pipelines also reduce European energy diversification, and hence 
weaken European energy security.
    PEESA, as amended, provides the United States with the authority to 
advance U.S. national security and foreign policy objectives, in 
particular to address Russian pipeline projects that create risks to 
U.S. national security, threaten Europe's energy security, and 
consequently, endanger Europe's political and economic welfare.
    In accordance with PEESA Section 7503, as amended, the Secretary of 
State, in consultation with the Secretary of the Treasury, is to submit 
a report to Congress for the relevant period, identifying, among other 
things, (A) vessels that engaged in pipe-laying or pipe-laying 
activities at depths of 100 feet or more below sea level for the 
construction of the Nord Stream 2 pipeline project, the TurkStream 
pipeline project, or any project that is a successor to either such 
project; and (B) foreign persons that the Secretary of State, in 
consultation with the Secretary of the Treasury, determines have 
knowingly: (i) Sold, leased or provided, or facilitated selling, 
leasing, or providing those vessels for the construction of such a 
project; (ii) facilitated deceptive or structured transactions to 
provide those vessels for the construction of such a project; (iii) 
provided for those vessels underwriting services or insurance or 
reinsurance necessary or essential for the completion of such a 
project; (iv) provided services or facilities for technology upgrades 
or installation of welding equipment for, or retrofitting or tethering 
of, those vessels if the services or facilities are necessary or 
essential for the completion of such a project; or (v) provided 
services for the testing, inspection, or certification necessary or 
essential for the completion or operation of the Nord Stream 2 
pipeline.
    In addition, the FY2021 NDAA amendments to PEESA expanded the types 
of vessel activity subject to reporting requirements in Section 
7503(a)(1)(A) from solely ``pipe-laying'' to also include ``pipe-laying 
activities,'' which are defined in Section 7503(k)(5) as ``activities 
that facilitate pipe-laying, including site preparation, trenching, 
surveying, placing rocks, backfilling, stringing, bending, welding, 
coating, and lowering of pipe.'' Furthermore, pursuant to Section 
7503(c), sanctions are to be imposed on those foreign persons that are 
determined to meet the criteria pursuant to Section 7503(a)(1)(B)(i-v) 
of PEESA, as amended, and who are not certified for wind-down under the 
applicable wind-down period and are not subject to the exceptions under 
PEESA, as amended. The amendments made to PEESA by the FY2021 NDAA 
require consultation with the governments of Norway, Switzerland, the 
United Kingdom, and member countries of the EU before imposing any 
sanctions.
    Persons with additional questions are encouraged to contact the 
State Department at [email protected].

Frequently Asked Questions

Q: What conduct does Section 7503(a)(1)(B) of PEESA, as amended, cover?

    A: Section 7503(a)(1)(B)(i), as amended, requires that the report 
to Congress include foreign persons that the Secretary of State, in 
consultation with the Secretary of the Treasury, determines have 
knowingly ``sold, leased, or provided or facilitated selling, leasing, 
or providing those vessels [i.e., the vessels listed for having engaged 
in pipe-laying or pipe-laying activities at depths of 100 feet or more 
below sea level] for the construction of such a project.'' Such 
projects include Nord Stream 2, TurkStream, or any project that is a 
successor to either such project. Section 7503(a)(1)(B)(i) covers 
foreign persons who provide or finance the vessels and also covers 
certain forms of support provided to the vessels not already covered 
under Sections 7503(a)(1)(B)(ii-v).
    Additionally, Section 7503(a)(1)(B)(ii) covers foreign persons that 
the Secretary of State, in consultation with the Secretary of the 
Treasury, determines have knowingly facilitated deceptive or structured 
transactions to provide those vessels for the construction of such a 
project. Such projects include Nord Stream 2, TurkStream, or any 
project that is a successor to either such project.
    Further, Sections 7503(a)(1)(B)(iii)-(v) cover foreign persons that 
the Secretary of State, in consultation with the Secretary of the 
Treasury, determines have knowingly: Provided for those vessels 
underwriting services or insurance or reinsurance necessary or 
essential for the completion of any of the aforementioned projects; 
provided services or facilities for technology upgrades or installation 
of welding equipment for, or retrofitting or tethering of, those 
vessels if the services or facilities are necessary or essential for 
the completion of any of the aforementioned projects; or provided 
services for the testing, inspection, or certification necessary or 
essential for the completion or operation of the Nord Stream 2 
pipeline.

Q: Does PEESA provide for certain activities to be excepted from 
sanctions?

    A: PEESA, as amended, includes a number of exceptions specifying 
activities to which sanctions under PEESA shall not apply. For example, 
pursuant to Section 7503(e)(3) of PEESA, as amended, sanctions under 
this section shall not apply with respect to a person providing 
provisions to a vessel identified under Section 7503(a)(1)(A) if such 
provisions are intended for the safety and care of the crew aboard the 
vessel, the protection of human life aboard the vessel, or the 
maintenance of the vessel to avoid any environmental or other 
significant damage.
    Pursuant to Section 7503(e)(4) of PEESA, as amended, sanctions 
under this section shall not apply with respect to a person for 
engaging in activities necessary for or related to the repair or

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maintenance of, or environmental remediation with respect to, Nord 
Stream 2, TurkStream, or any project that is a successor to either such 
project.
    Pursuant to Section 7503(e)(6) of PEESA, as amended, sanctions 
under this section shall not apply with respect to the European Union; 
the government of Norway, Switzerland, the United Kingdom or any member 
country of the European Union; or any entity of the European Union or a 
government noted herein that is not operating as a business enterprise.

Q. How does the U.S. government plan to implement the wind-down 
specified in Section 1242(f) of the National Defense Authorization Act 
for Fiscal Year 2021 (NDAA)?

    A: Upon passage of the FY2021 NDAA on January 1, 2021, the 
amendments made to PEESA pursuant to Section 1242(f) of the FY2021 NDAA 
immediately became effective. In accordance with the wind-down 
provision in Section 1242(f) of the FY2021 NDAA, persons that were 
knowingly engaged in conduct subject to sanctions under the amendments 
to PEESA would have needed to cease construction-related activity or 
engage in good faith efforts to wind down sanctionable activity no 
later than 30 days after PEESA, as amended, became effective. That date 
was January 31, 2021. The wind-down provision in Section 1242(f) of the 
FY2021 NDAA is not applicable to activities that were already subject 
to sanctions under Section 7503 of PEESA prior to the amendments in the 
FY2021 NDAA. Following the conclusion of the wind-down period, the 
Secretary of State, in consultation with the Secretary of the Treasury, 
is required to impose sanctions on those foreign persons that are 
determined to meet the criteria pursuant to Section 7503(a)(1)(B)(i-v) 
of PEESA, as amended, and who are not otherwise subject to the 
exceptions under PEESA, as amended.

Virginia E. Palmer,
Acting Assistant Secretary, Bureau of Energy Resources, Department of 
State.
[FR Doc. 2021-07662 Filed 4-13-21; 8:45 am]
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