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Reagan sanctions aimed at crippling Soviet pipeline

By
DONALD A. DAVIS

WASHINGTON -- President Reagan, impatient with the lingering of military rule in Poland, is increasing pressure on the Soviet Union by invoking new sanctions aimed at crippling the Soviet natural gas pipeline to Western Europe.

Reagan originally put economic and technological sanctions in place in the closing days of December. Now, six months later, he has decided to apply an extra squeeze that will increase the cost and delay construction of the pipleline for up to three years, officials said.

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'The objective of the United States in imposing the sanctions has been and continues to be to advance reconciliation in Poland,' the president said in a statement Friday.

'Since December 30, 1981, little has changed concerning the situation in Poland; there has been no movement that would enable us to undertake positive reciprocal measures.'

Specifically, the sanctions affect only about 20 companies. But the expansion heads off the possibility that products developed by those firms could be built in other countries and sold to Moscow.

The new decision, announced after a National Security Council meeting, bans the sale to the Soviet Union of oil and gas equipment produced by foreign subsidiaries of U.S. companies and equipment built abroad under licenses from U.S. companies.

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It comes on the heels of Reagan's push at the Versailles summit this month to tighten European credit for Soviet loans on the troubled project. An administration official who attended the NSC meeting said the president's order could delay completion of the pipeline 'one to three years' and 'increase the cost' to Moscow of building it.

'The longer the pipeline is delayed, the higher the cost,' he said.

The White House is fighting the pipeline because it might add to Moscow's leverage on Western Europe if those nations become dependent on Soviet oil.

When Reagan announced the original sanctions Dec. 29, he said other measures could be taken if conditions in Poland did not improve.

'Six months have passed and little has changed,' the administration official said. 'There was no choice but to take further steps.'

The timing illustrated the president's determination, since he made the decision on the same day reports were published that executives of two American firms with big in building pipelines -- Caterpillar Tractor Co. and General Electric -- had written him asking for an easing of the ban.

The sanctions blocked Caterpillar from selling $90 million worth of pipe-laying equipment to the Soviet Union and GE from providing turbine rotors.

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The new controls will directly block the export to the Soviet Union of compressors manufactured by a French-owned company under a U.S. license granted by GE.

The administration has criticized 'unrealistically favorable' credit terms offered by Western European nations for building the pipeline.

But the West Germans have told Washington the project will be built with or without American approval.

Reagan laid down his initial economic and technological sanctions against Warsaw two days before Christmas and on Dec. 29 announced the sanctions against Moscow. He said the Kremlin has a 'heavy and direct responsibility' for the suppression in Poland.

A Senate subcommittee on international finance heard testimony earlier Friday that the sales would help the Soviets militarily and that the Soviets are using concentration camp labor, probably from Vietnam, to construct the pipeline.

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