The White House is “working diligently” to appoint a permanent privacy referee at the State Department to keep in place a trans-Atlantic data transfer pact, a U.S. official said.

The U.S. is making progress toward permanently filling that role as promised, James M. Sullivan, deputy assistant secretary for services at the U.S. Department of Commerce, told reporters on a Dec. 20 call.

Below is a full rush transcript of the press conference by JAMES M. SULLIVAN , Deputy Assistant Secretary for Services at International Trade Administration, U.S. Department of Commerce.

DAS Sullivan: I’m the Deputy Assistant Secretary for Services in the International Trade Administration at the U.S. Commerce Department. Among other things I oversee the office and the team that administers the Privacy Shield Program. So on behalf of the Department and the International Trade Administration, I do appreciate this opportunity to discuss the successful and what we regard as a very positive second annual review of the EU-U.S. Privacy Shield.

As everyone already knows very well, yesterday the European Commission issued its report on that review and made very clear we think the Privacy Shield is a success and that it’s working well, and that U.S.-EU collaboration over the last year has really further enhanced the functioning of the Privacy Shield Program.

My boss, Secretary of Commerce Wilbur Ross, very much welcomed the report. He’s very proud of our work together to support Privacy Shield and advance the transatlantic economic relationship. Both he and we are extremely mindful that the Privacy Shield supports the cross-border information flows that allows both our citizens and our businesses to connect and that play such an increasingly critical role in our society and economy today.

With that said, I am going to give a very brief overview of the Commission’s report and the review and then I’m more than happy to take your questions.

Privacy Shield has now finished its second year and it really owes its continued success to the work of several stakeholders — the U.S. government and the European Union. In October at the Review we had more than 50 senior U.S. government officials from across our interagency and they joined representatives from the European Commission and the European Data Protection Board in Brussels for the review. Again, Secretary Ross was there with European Commissioner for Justice Věra Jourová. They opened the review together, alongside the Chairman of our Federal Trade Commission, Joseph Simons and the Chair of the European Data Protection Board Andrea Jelinek. Their opening remarks were then followed by two very intense days of detailed discussions that covered both the commercial aspects and the national security related elements of the Privacy Shield framework.

The review itself really focused on the functioning, the implementation, the administration, supervision and enforcement of the Privacy Shield Program. I think both sides agree that it afforded a very useful opportunity to discuss how the program and the framework are actually functioning in practice.

Just to elaborate a bit on the U.S. delegation and the 50 or so officials we had in Brussels. It includes senior officials of course from the Department of Commerce, from the State Department, the Justice Department, our office, the Director of National Intelligence, the Privacy and Civil Liberties Oversight Board commonly referred to as the PCLOB, the Federal Trade Commission which is our enforcement agency on these issues, and the Department of Transportation as well.

In the report, I think the Commission acknowledge extensively the very significant work that’s been undertaken by the U.S. government over the last year or so to enhance privacy and elaborated on the roles of each of these agencies. I think the report did a good job of describing how the program, Privacy Shield Program, has benefited from these efforts, in particular by the Commerce Department to enhance oversight and compliance of the program, to expand our education and outreach efforts on the framework so that stakeholders, companies, organizations and individuals really understand what Privacy Shield is. And our efforts, as well, to engage with our EU partners to address the recommendations generated out of the first annual review last year.

The report was very welcoming of the FTC’s enforcement efforts. There were eight Privacy Shield enforcement cases that were touched on, and I think they lauded the FTC’s proactive efforts to monitor compliance of Privacy Shield as well.

The report touched as well on the participation at the review of the Privacy Shield on this person, Manisha Singh at the State Department. And then finally, the report acknowledged the transparency efforts and initiatives undertaken by our intelligence community including the Privacy Enhancing Amendments to the Foreign Intelligence Surveillance Act, commonly known as FISA; the administration’s affirmation that PPD 28, Presidential Policy Directive 28 does still apply to non-U.S. citizens; the fact that the PCLOB, the Privacy and Civil Liberties Oversight Board has been restored to a quorum status and that they have publicly released their report on PPD 28; as well as several other U.S. legal developments that tend to bolster privacy and data protection measures.

So I think all in all the Commission’s report really does echo Secretary Ross’ comments at the review, but also in his OpEd a few days prior to the review that was in The Financial Times, the bottom line of which is Privacy Shield works.

To wrap up I just want to share a couple of quick figures. Since Privacy Shield started operating in August of 2016 over 4200 companies have now made legally enforceable commitments to comply with the principles in the Privacy Shield framework. And these companies, I do want to be clear, and organizations, are not just large multinationals. They range from startups and small businesses to Global 1000 and Fortune 500 enterprises in every sector. Again, we’re not just talking about the tech sector or large platforms. We’re talking about companies in the manufacturing sector, in the agricultural sector, in retail. And I want to note that the majority of Privacy Shield participants are in fact small and medium-sized enterprises. I think that’s a fact that’s often overlooked.

So because of the certification of the Privacy Shield Program, those companies that do participate get to receive personal data from the EU and then use that data for a variety of purposes ranging from increasing efficiencies and productivity to using data to fuel technological advances, reforms of social interaction, economic growth, and a number of other things.

Again, I’m getting a little long-winded so I’ll conclude by saying we were very gratified that this year’s review facilitated yet another productive dialogue with our partners in the European Union and we look forward to continuing to work together and support Privacy Shield.

Question: I’ve heard some complaints from companies and from other attorneys on a backlog on recertifications. What may be causing that? And what steps should be taken to address that? A quick second question is: do you have any comments on Facebook’s Privacy Shield certification, given all the issues and international investigations going on into the company?

DAS Sullivan: Let me start at a high level and I’m going to address what I can on your questions. We are fortunate to be joined by our Privacy Shield team lead, Caitlin Fennessy who can probably go into some greater detail on the administrative aspects as she manages the team that oversees the day-to-day administration of the program.

But in terms of, I want to emphasize and make clear that with GDPR’s implementation of the General Data Protection Regulation in May of this year there was, again, I’m sure everyone on this call knows very well, a lot of media attention on data protection and privacy issues, particularly in Europe. This generated a significant increase in the number of applicants for self-certification to the Privacy Shield program. In response to that we have beefed up our team. I do want to make clear that one of the first things I did when I came on board was create a separate Privacy Shield team, again, which Caitlin Fennessy now heads. And we have expanded that team to make sure that we’re doing everything we need to do to comply with the terms of the framework.

DAS Sullivan: Mr. Stoller, I guess the second part of your question regarding Facebook, again, you’re well aware, the Federal Trade Commission has initiated a non-public investigation into Facebook’s privacy practices and they made clear in their announcement that the FTC is firmly and fully committed to using all of its tools to protect the privacy of consumers, and foremost among these tools is enforcement actions against companies that fail to honor their privacy promises including as they pertain to Privacy Shield.

I alluded earlier to Secretary Ross’ OpEd, and I’ll just say we can’t get into much more detail on the Facebook situation since there is an ongoing investigation. And again, it’s FTC policy that those are not public, sharing details at this stage. But as Secretary Ross made clear in his OpEd and as the framework terms state, if there are participants that are persistently failing to comply with the promises they have made and the pledges they have made pursuant to the framework, then the Commerce Department will remove them from the program.

Question: Will the U.S. government be able to nominate a permanent ombudsman by the end of February following yesterday’s call by the European Commission? If not, what steps do you expect the EU to take in line with GDPR rules?

DAS Sullivan: Let me start at a high level. Obviously, the Privacy Shield ombudsperson was a central element, is a central element of the framework when it was negotiated. It’s one of many redress mechanisms that were added sort of to 2.0, building on Safe Harbor. And we discussed the ombudsperson at length at the annual review and how it functions. We also talked in great detail about the President’s recent decision to name a senior State Department official who was politically appointed, unanimously confirmed by the Senate, to serve as ombudsperson. Both sides, I want to make that clear, recognized the need for prompt progress on nominating what we see consistently characterized in Europe as a “permanent” Under Secretary. That’s a misnomer from our perspective. I do want to make clear that any acting official in the federal government is fully empowered. There is no distinction in terms of what they can or cannot do in terms of their roles and responsibilities. But that process of naming a new Under Secretary of State for Economic Growth, Energy, and the Environment is well underway. We are in close contact with the EU on this matter. We are very mindful of how important it is to our partners in the EU.

Again, I want to make clear that consistent with the President’s direction, I guess it was last fall, Assistant Secretary of State Manisha Singh who again has been unanimously confirmed by the Senate in late 2017, was designated to serve as the ombudsperson. She was at the review. She was an active participant. And she elaborated, along with several colleagues from the State Department on how the ombudsperson mechanism works.

So until a new Under Secretary is confirmed, she will have, again, the same authority to carry out the functions of the ombudsperson as her predecessor, Ambassador Judith Garber had as former Under Secretary in the last administration, Catherine Novelli had previously.

I do want to reiterate again in the United States this concept of a “permanent” official, no one, none of these individuals I just listed is “permanent” per se, and anyone serving as an ombudsperson including Manisha Singh currently, including Ambassador Garber previously and Catherine Novelli will always be independent, experienced and empowered exactly in accordance with the terms of the framework.

So again, the process to nominate and appoint an Under Secretary of State to serve as ombudsperson is underway, but that office, that resource, it’s fully staffed, it’s been up and running for two years, and to date no complaints have been received.

Question: The European Commission announced yesterday that 100 companies have been checked, 21 had issues that have now been solved. Can you elaborate on what are the most common issues, and what are the measures taken for them?

DAS Sullivan: I appreciate that question. Again, since we are joined by two members of our Privacy Shield team, they can probably give a more technically detailed answer than I, so I’m going to turn it over, if I could, to one of our key team members, Rochelle Osei-Tutu: Essentially in regards to that question that pertains to the procedures that we’ve implemented in year two of the program to make sure that organizations who are certified are continuing to fulfill the self-certification requirements over the life cycle of their certification.

In order to do that effectively, we have started to conduct random spot checks where we select participants to verify that you know, the points of contact that are responsible for handling complaints or access requests or other issues arising under Privacy Shield are in fact available to address those concerns or inquiries.

We also make sure that an organization’s public facing web site includes the privacy policy and that it is in fact accessible.

Another thing we check is to make sure that within the privacy policy that it meets all of the self — continues to meet all of the self-certification requirements. And finally, we also checked to make sure that those organizations that are selected are still in fact registered with the independent recourse mechanism, that they’ve identified when they certified to be able to address escalated complaints.

So in regards to the companies that we have checked, of course, based on those elements, we reach out to them if something’s missing or if they in some way changed their policy of if it’s no longer, the link to the web site is no longer accessible. So those are some examples of the things that we’ve identified.

And I think part of the benefit of this process is to show that we’re still in contact with the organizations that are participating and in doing so we remind them of what they committed themselves to do, and we want to make sure that the information they provide is in fact correct and up to date until they’re due to re-certify a year later.

Question: If the U.S. is worried at all that Commissioner Jourová’s team will pull the Privacy Shield as she said in the past that she might do? How worried is the United States about the legal uncertainty that thousands of companies who signed up to the Shield could be thrown into yet again if that happens?

DAS Sullivan: Thank you for that question. We are always mindful of the uncertainty that can be generated from time to time around Privacy Shield. Again, we’re at the Commerce Department so one of our priorities is to try to do our utmost to avoid that kind of uncertainty for businesses and other stakeholders. There are some challenges to Privacy Shield. There are some legal challenges. We obviously have faced some political challenges.

As I said earlier on the ombudsperson, we’ve had extensive discussions over the last year and in the previous year, I might add, about the ombudsperson situation. Again, we have not had any complaints submitted to date, but we have had many, many close conversations, meetings, discussions about the ombudsperson. And after the first annual review which took place in the fall of 2017, we took the additional step, and I say we, the U.S. government, specifically the State Department, of publishing a Privacy Shield ombudsperson mechanism, unclassified implementation procedures, so that should really make it as clear as possible to stakeholders and others how the mechanism works.

So we are working very diligently, the White House is working very diligently on nominating someone for the Under Secretary position. I think I’m very confident that this issue should be resolved in short order. Again, we’d like to put this particular issue behind us since, again, we’re sensitive to EU concerns about this, but at the end of the day that resource, the ombudsperson mechanism, has been fully resourced for two years. And it is ready to go. Everything is in place to process any requests that have been referred by EU individuals about U.S. government access to their data.

So it is there, it’s functioning. I am not terribly concerned that this will continue to drag on.

DAS Sullivan: Just again, that we are very gratified with the outcome of the second annual review. I think we’ve built on a lot of great progress over the last two years, and certainly I do want to recognize the Privacy Shield team here at the Commerce Department. We have some very talented individuals, some of whom were instrumental in negotiating the framework and worked on its predecessor, Safe Harbor. So we have a very deep bench here when it comes to privacy issues and cross-border data flows and data protection.

We are continuing to work very closely and developed strong relationships over the last two years with our counterparts in the EU. And we do want to relay, on that last point that we just talked about, the critical importance of certainty for stakeholders. We have thousands of companies and other organizations that now rely on this mechanism for transatlantic data transfers. And as I alluded to there are some legal challenges out there that could inject some additional uncertainty.

So we are working very diligently to do what we can to avoid that kind of uncertainty and make sure that the thousands of companies and the hundreds of thousands of employees and the nearly 1.1 trillion dollars in transatlantic trade continue to benefit from Privacy Shield.

Again, thank you all for joining us this afternoon.

Boston, MA (December 13, 2018) – American Realty Advisors (“ARA”), an institutional fund manager with more than $9.3 billion in assets under management, has entered into a joint-venture partnership with an affiliate of Norges Bank Real Estate Management (“Norges Bank”) to acquire 121 Seaport, a Class A office property located in the highly desirable Seaport submarket of Boston, MA.

 “Partnering with Norges Bank to acquire an asset of this caliber in a key urban market will allow us to drive increased cash-flow and returns for both Norges Bank stakeholders and ARA investors,” says Austin Maddux, Executive Vice President, Deputy Portfolio Manager at American Realty Advisors. “121 Seaport is a top-tier office asset with long-term leases in an irreplaceable location, which we view as a generational investment and the foundation for our new relationship and future joint efforts with Norges Bank.” 

The newly-constructed 17-story tower features 400,342 SF of rentable space, one-of-a-kind elliptical architecture with a distinctive angled glass façade, a three-story lobby with floor-to-ceiling windows, and abundant building amenities. 

In addition to its highly-efficient floor plan, 121 Seaport is LEED Platinum certified and constructed to the highest sustainability and resiliency standards. This significantly contributes to minimizing operating costs and environmental impacts. 

“This investment is well-aligned with our core strategy to target modern, sustainable office properties that are highly sought after by tenants and positioned to perform over time. Its flexible layout with a column-free design and highly sustainable attributes contribute to an 85% efficiency factor that enables companies to maximize their workspace and expand their employee base.” explains David Willett, Senior Director, Investment Group at ARA.

Strategically positioned along Harbor Way within Seaport Square, 121 Seaport is surrounded by 7.6 million square feet and 23 acres of mixed-use development, including Amazon’s brand-new flagship office, which is set to be completed in 2021, and will accommodate over 2,000 employees. One block from 121 Seaport is the $650 million One Seaport Square complex featuring over 800 apartment units with ample shopping, dining, and entertainment options. The Seaport Common is also a unique component to the property. Located directly between 121 Seaport and the Boston Harbor waterfront, Seaport Common is an urban green space and community gathering place, which regularly hosts farmer’s markets, fitness classes, and local art and entertainment events. The space also facilitates panoramic views of the harbor.  

Boston’s Seaport District is the city’s top destination for tech and innovation firms as well as established Fortune 500 companies that include BCG, PwC, GE, and MassMutual. Surrounded by over 70 colleges and universities in the area, the city has a highly educated workforce retaining over 40% of graduates. 121 Seaport also offers convenient access to Downtown Boston and the Logan International Airport through the Silver Line subway, just steps from the property. 

“Boston, and specifically the Seaport, is thriving and makes for a desirable investment market due to its strong concentration of med, ed, tech, and financial services industries. The region’s unemployment rate is consistently below the national average and has driven office rents to experience a 25% increase in the last five years followed by declining vacancy rates for Class A office space” adds Willett. 

Other notable amenities of the property include three outdoor terraces, a three-level below-grade parking garage with the ability to accommodate 325 vehicles, a 24/7 concierge, fitness center, and lower level retail including a day-care center set to open in early 2019. 

121 Seaport is located at 121 Seaport Boulevard, Boston, MA. The seller, Skanska USA was represented by Robert Griffin, Edward Maher, Matthew Pullen, and James Tribble at Newmark Knight Frank. 

European efforts to keep Russia shipping gas through Ukraine after the opening the Nord Stream 2 pipeline across the Baltic Sea are futile, the top U.S. energy diplomat said on Tuesday, saying Russia could not be trusted.

“There is a problem because you are expecting to trust Russia to maintain and not cut off that gas,” Fannon, the U.S. assistant secretary for energy resources at the State Department, told reporters in a teleconference.

“With the Kerch Strait closure and other incidents, it is hard for anyone to rely on and trust that,” he added. “We do not see the maintaining of gas transit volumes, however modest, as a real proposal.”

Fannon, who made the comment after a tour of eastern Europe, warned that if gas volumes via Ukraine fell it would over time degrade the pipeline infrastructure and harm the continent’s energy security.

Europe, which relies on Russia for over a third of its gas needs, currently gets most of its supplies delivered via Ukraine, which derives up to 3 percent of its gross domestic product from transit charges.

Below is a full rush transcript of the press conference by Assistant Secretary Francis R. Fannon , Bureau of Energy Resources.

Assistant Secretary Francis R. Fannon : I had some very great positive engagements in Budapest, Prague and Zagreb, and then throughout the other locations that you mentioned. In each of these we discussed the critical importance of our shared values in the transatlantic alliance in the context of energy security.

I think that given Russia’s aggression in recent weeks, this is a good time to spotlight our diplomacy in this area. The energy security of our European partners and allies is a longstanding strategic priority of the United States. The United States strongly condemns recent Russian aggression in the Sea of Azov. The Russian Federation’s closure of the Kerch Strait is a clear violation of international law. Russia’s actions have strengthened the international consensus that Nord Stream 2 is a direct affront to the transatlantic energy security relationship and our shared national security goals.

So, I’d like to talk to you a little bit about some of the diplomatic work that we’ve been engaging with with respect to partners in Europe, who really recognize the centrality of energy diversity and achieving energy security. More European countries than ever are recognizing the importance of diversification as fundamental to energy security, and that’s in part why the European Union, the Commission, moved forward with the projects of common interest model, which seeks to open markets and encourage new key energy infrastructure to facilitate integration and support diversity. These projects include the Greece-Bulgaria Interconnector Pipeline and the synchronization of the Baltic States’ electricity grid with continental Europe. The Krk Island LNG project in Croatia is another project of common interest. I’ve had some very positive discussions with Prime Minister Plenkovic in Zagreb, where we discussed this project and its potential to support energy security and diversification.

This terminal could import LNG from a wide range of suppliers and allow for diversification in the region as well and in particular for Hungary. Once key energy infrastructure projects like Krk are built it provides optionality and introduces real market competition.

Russia dies not want options. It does not want a real transparent market. The important thing is the impact on optionality, once infrastructure is built is not a notional concept. We have a proof of concept. Take, for example, Lithuania’s floating storage and regassification unit, the Independence. It was built as a strategic investment, yet the FSRU introduced market competition and lowered Lithuania’s gas prices.

Diversification includes all sources of energy. And when we talk about energy sources we include renewable energy and nuclear energy as well, though of course much of the discussion on this call is about gas.

Things worth noting, the United States is the world’s second largest renewable energy producer, and it’s important to weigh in on that as my engagements throughout Europe have all included robust discussions on renewable energies, as well as nuclear.

America’s calling to diversify sources and delivery routes of natural gas in particular predates our relatively new role as a natural gas exporter. U.S. steadfast support for the $40 billion plus Southern Gas Corridor has spanned multiple administrations and continues today, despite the fact there’s no direct American investment in the project.

The United States will continue to support European energy diversification, including alternative sources of energy such as LNG.

I should also note that there are new sources of gas coming on-line all the time. In the Eastern Mediterranean where I was a few weeks prior, significant new volumes and integration in the region are allowing for new gas supplies to find their way on world markets and potentially certainly to Europe.

Regardless of where a country ultimately sources its gas, American-driven competition increases choices and reduces prices for European consumers regardless of the producer.

In contrast, Nord Stream 2 and expanded Turkish Stream Pipeline seek to deepen dependency on Russian gas rather than strengthen security. They’re not commercial projects. They are political tools.

Unlike the United States, Russia’s energy companies are an extension of the state and the Russian state uses energy for coercive geopolitical aims. Through Nord Stream 2 Russia seeks to increase its leverage over the West while severing Ukraine from Europe.

The U.S. and Europe share Western values. We look at commerce as mutually beneficial and reciprocal. But doing business with Nord Stream 2 is just not consistent with those shared transatlantic values. Nord Stream 2 threatens to directly undermine Ukraine’s security.

Earlier this month when Secretary Pompeo hosted Ukrainian Foreign Minister Klimkin, he reiterated how we will “keep working together to stop the Nord Stream 2 project that undermines Ukraine’s economic and strategic security and risks further compromising the sovereignty of European nations who depend on Russian gas.”

U.S. opposition to Nord Stream 2 is rooted in our abiding concern that the pipeline presents broad geostrategic threats to our transatlantic energy security, a point that we’ve consistently conveyed to leaders across the continent. The Secretary reminds us that: “We do not want our European friends to fall prey to the kind of political and economic manipulation Russia has attempted in Ukraine since it cast off its Soviet shackles.”

Question: I just want to look specifically about what you’ve been seeing in the Kerch Sea, and can you relate how that impacts on European energy security at this time as regards to the Nord Stream 2 Pipeline, please?

Assistant Secretary Francis R. Fannon: Thank you for the question. I opened my comments with reference to this. What I think it speaks directly to, is that even under clear international law, clear consensus, it calls to question the entire notion of the relative reliability of Russia as a responsible actor and as a part of this international community.

We spoke about shared values, shared transatlantic values. And this is another illustration that Russia does not just share those values, but they reject them entirely.

I think we have to consider these hostilities as we consider, as countries consider entering into relative partnership with such an actor.

Question: Can I just follow up quickly, just in terms of for Ukraine itself. At the moment they rely on a certain amount of revenue that they get from Russian as supplies bypassing the country. Long term, that doesn’t seem particularly sustainable, based on the arguments you’re making around the intentions of Russia. What suggestions do you have for the long-term future of Ukraine and energy security?

Assistant Secretary Francis R. Fannon: We mentioned earlier, Kathy mentioned that I spent some time in Kyiv and I both engage with officials there as well as in Washington and Brussels. The issue in our support for Ukraine and EU’s support for Ukraine is steadfast. I think the point about gas transit it an important one. It’s an important source of revenue. But also it’s a physical linkage to the West proper. Yes, it’s a pipeline, and it’s a means of transit revenues, but it’s also much more than that. As we see Russia seeking to effectively carve up Ukraine, the pipeline has an even greater significance. Which is why we’re very concerned about Nord Stream 2 and Multi-Line Turkish Stream which would divert gas transit away from Ukraine and effectively starve Ukraine from being able to not just collect the transit revenues but maintain that critical linkage to the West.

In terms of Ukraine’s, the relative sustainability of Ukraine, it’s an important question. It’s something we at the State Department have been focused on for a considerable amount of time in terms of enabling Ukraine, supporting the ongoing reform efforts. And other countries, I should note, have supported that in terms of in particular Slovakia, Poland, Hungary, they’ve all engaged in meaningful agreements with Ukraine for reverse flow to help Ukraine be free of having to contract with Russia gas. Obviously, Ukraine knows better than most that Russia is not a reliable supplier.

In terms of ourselves, the department, we’ve been providing technical support and assistance to NAFTAGAS and its subsidiaries to strengthen corporate governance and align operations with international best practice. We’re very pleased that NAFTAGAS has moved forward with a framework for unbundling which is a requirement under EU law, and we very much are supportive of these reform efforts.

NAFTAGAS and Ukraine has done quite a bit. We’re encouraged by the momentum, but the work certainly isn’t over. And we will continue in our steadfast support as they continue on to these reform efforts.

Question: We hear that you are very critical of Russia and its position as an energy supplier. We know the U.S. President has the power to sanction companies involved in Nord Stream 2. So why hasn’t the U.S. President sanctioned companies in Nord Stream 2? And are the companies providing the pipe-laying services for Nord Stream 2 Pipeline, are they the companies most at risk? Because Russia can afford to finance the pipeline itself but it can’t lay the pipes itself.

Assistant Secretary Francis R. Fannon: Thank you. As you rightly point, the U.S. government has the ability to sanction Russia energy export pipelines under Section 232 of the Counter-Americas Adversaries Through Sanctions Act. We also have a longstanding policy to not comment on potential future sanctions, future sanction actions.

But we have been very clear, and I will reiterate it now, that firms working the Russian energy export pipeline sector are engaging in a line of business that carries sanctions risk. We continue to review potential sanctions actions and encourage governments or companies to contact us if they have questions about this process.

I think what we seek to do, and we continue to do at all levels, is encourage all parties to stop the project. Germany can certainly remove their political support from the project. Support the update of the gas directive. That policy has been languishing for over a year and a half. That would be a positive step in advancing energy security. And then have a review on national and energy security grounds under EU law.

These are things we are encouraging and we’ve had some very fruitful discussions and we continue to engage to this day.

Question: Denmark has sort of a special position in this given that the government can make a rejection of the pipeline through Danish territorial waters. If the Danish government decides to do that, reject the application, I mean if the government decides to approve the project, will it affect the U.S. administration’s view upon Denmark in that case?

And another question is that Germany has underlined the importance of Ukraine still being a transit country after the establishment of the pipeline. Do you think such a guarantee, in case it should be established, would have any effect? And what do you think about this idea?

Assistant Secretary Francis R. Fannon: We have, thank you. With respect to our position in Denmark, the U.S. has encouraged Denmark to not approve, continue to reject the routing. So our position is quite clear on that.

In terms of maintaining some gas transit through Ukraine, in part we think, I guess I see that in two ways. One, it’s a question of mass. Assuming the total volumes that are transiting Ukraine versus the volumes that would be transited via Nord Stream 2 and Multi-Line Turkish Stream, there would be some delta left over. So I suspect that that is in part how they would be able to maintain some gas transit through Ukraine.

But there’s a problem with that. One, the volumes are relatively insignificant. Insignificant such that it would over time degrade the integrity of the pipeline because sufficient pressure would not be maintained.

But more broadly there’s a problem because you’re expecting to trust Russia to maintain and not cut off that gas. And I think, as I started my comments with the Kerch Strait closure and other incidents, it’s hard for anyone to rely on and trust that. And in fact Mr. Putin, when this idea was raised, said that, and I’m paraphrasing now, that they would consider it only if it makes commercial sense to Russia.

So we do not see the maintaining of gas transit volumes, however modest, as a real proposal.

Question: Ukraine considers Nord Stream 2 a purely political project and a real threat to security to both Ukraine and Europe. Not everyone in Europe shares this view. What are the incentives you are going to use to persuade European leaders to block the pipeline deal?

Assistant Secretary Francis R. Fannon: We have a full, whole-of-government diplomatic approach on this, and I think our friends in Ukraine and throughout the continent have seen that and will continue to see it. We’re engaging bilaterally, we’re engaging through multilateral fora, and we’re engaging in foras like this, publicly.

One of the things that I think is important for our European friends to consider also is these projects are long-term in nature like Nord Stream 2, and what they effectively do is lock in kind of an old way of doing business, and they’re ignoring this near-term energy abundance that we’re seeing.

We’re really at a turning point in that energy abundance, not just in the United States, but globally. Of course in the United States we’ve seen that and we’re proud of our record. In a decade, we’ve nearly doubled our gas production from 570 bcm in 2008 to 900 today.

But in the U.S. we are still nascent in this journey. We only have two LNG export facilities. We expect to double that export capacity in the next five years. We anticipate doubling recovery rates of gas and oil along the same time horizon within some of our key, most prolific basins. Our industry continues to innovate new and more flexible contracting models. U.S. production and market innovations will drive down prices globally.

At the same time we’re seeing new and sizeable finds in locations which didn’t exist as gas supply just ten years ago. Places like the Eastern Mediterranean, which I mentioned earlier. Mozambique has huge gas that will be coming on-line. Qatar and Australia are both increasing their capacities.

And on the nuclear side, we expect to see new, safe nuclear in the form of small modular reactors to be commercially available in the relatively near term.

So what we see here is a new form of energy abundance that can be a real win/win for all of us, which is all the more reason why it’s incumbent for European partners to consider the long-term relationship and energy dependency on Russia. And by locking that in, they’re losing the opportunity that stands before us to have free, transparent, very real markets, to improve energy diversification and energy security.

Question: The Portuguese government was very keen on using that port to import American LNG and to make it an entry point into Central Europe by having a pipeline crossing Spain and into France. France was not very keen on that idea, however, and it seems to have fallen off the radar. Can you tell us what’s happening there?

Assistant Secretary Francis R. Fannon: Thanks. We certainly support Midcat and continue to call on it as an important project that supports the broader energy diversification in Portugal, given its proximity, geographic benefit, it makes all the sense that they should be an important import location.

In terms of the specifics on the political questions at issue, as you mentioned France, I leave that to the discussion within the European political context.

Question: I would like to ask how the United States will support Ukrainian energy diversity, and I would like to ask your opinion about outlook of the central-eastern European countries on the Nord Stream 2 Gas Pipeline, especially Czech Republic and Hungary.

Assistant Secretary Francis R. Fannon: Thank you. With respect to Ukraine, we have longstanding support for Ukraine in really helping to improve their governance structure to bring their state companies in to international best practice standards. And in particular I mentioned the unbundling of NAFTAGAS. That’s a critical step and we’re very pleased to support that. Of course it’s a big firm. It takes some time. But we have a framework agreement in place. They do, they have an MOU which will initiate unbundling in January of 2020.

Assistant Secretary Francis R. Fannon: Thank you very much.

We have shared transatlantic values. We have a shared view of energy security through diversification. A project that’s intended to support a free Europe should not be a project that divides it.

We have to stand together, and we very much support the continued energy diversification and energy security goals that advance our shared transatlantic values.