The Biden administration is set to impose sanctions on the Swiss-based company overseeing the construction of the "Nord Stream 2" gas pipeline extending from Russia to Germany, but will immediately revoke them, according to multiple sources familiar with the decision. In a report to Congress released on Wednesday, the State Department stated that "Nord Stream 2 AG" is engaged in activities sanctioned under U.S. law; however, the Biden administration decided to waive the sanctions for national security reasons, as per those who spoke on the condition of anonymity.
**Presidential Waivers**
Separately, German Foreign Minister Heiko Maas said U.S. Secretary of State Antony Blinken informed him that the report lists sanctions against several entities, but it also includes "presidential waivers" for "Nord Stream 2 AG" and its CEO Matthias Warnig, according to the Associated Press. The Biden administration is looking to pressure Germany to halt the nearly completed pipeline, while dismissing the possibility of revoking the waiver and imposing sanctions. However, recent moves will not satisfy members of both parties in Congress who want to stop the pipeline, arguing that it makes European countries more dependent on Russia and rewards Russian President Vladimir Putin at the expense of national security concerns.
**Republican Objection**
Republican Senators Ron Johnson, John Barrasso, and Ted Cruz stated in a statement that if these reports are accurate, the Biden administration's decision to waive sanctions sends an unfortunate message that the United States is not ready to fulfill its Congressional mandate to use punitive sanctions to stop the pipeline. The statement asserts that such weakness only encourages Putin’s aggression and does not impose a significant cost for his "malicious" activities, claiming that "with decisions like these, the Biden administration is merely encouraging him (Putin)."
Axios had revealed the administration's plans earlier.
**Russian Welcome**
Reports of the sanctions being revoked were welcomed in Russia, as shares of Gazprom PJSC rose by up to 2.8% before trimming gains amid broad weakness in the Russian market. Analysts at BCS Global Markets noted that the U.S. position being softened regarding "Nord Stream 2" is positive for the stock price. The "Nord Stream 2" pipeline has become a major source of contention between the United States and its European allies, especially Germany, during former President Trump’s administration. President Biden has largely adopted Trump's stance that the project undermines European security by closely tying the continent to Moscow. However, Biden has also warned against sanctioning allies like Germany over this issue as part of a broader effort to repair how the U.S. conducts diplomacy and address some disputes with other countries that arose from Trump’s "America First" foreign policy.
**Congressional Pressure**
The U.S. administration has faced pressure from lawmakers on both sides to block Gazprom’s project following a congressional report in February, which indicated that only one vessel ("Fortuna," flying the Russian flag) was under sanctions. Proponents of action in Congress argue that U.S. law requires sanctions against any foreign entity that has assisted in the construction of the pipeline. They also emphasize that while the U.S. may seek to ease tensions with Germany, it risks isolating other allies such as Ukraine, Poland, and the Baltic States. The 1,230-kilometer (764-mile) pipeline will help Germany secure relatively low-cost gas supplies amid declining European production and is part of Gazprom’s decades-long efforts to diversify export options to Europe as the region moves away from nuclear and coal energy.
