US waives sanctions on Nord Stream 2 firm, chief executive

The US is waiving sanctions on the company overseeing construction of the controversial Nord Stream 2 gas pipeline.

The State Department sent a report to Congress on Wednesday stating that waiving punitive measures against Swiss-based Nord Stream 2 AG and its German chief executive Matthias Warnig as well as four of the company’s corporate officers were important for US “national interests”, DPA news agency reported.

The report, obtained by DPA, said the reason for the waiver was that sanctions would “negatively impact US relations with Germany, the EU and other European allies and partners”.

While the company in charge of the pipeline won’t be sanctioned, other entities involved would be.

The report went on to say that punitive measures would be imposed against four Russian ships laying pipes on the basis of US sanctions laws against the Nord Stream 2 pipeline and the Russian-Turkish TurkStream project.

The US also imposed sanctions on four Russian institutions.

While Nord Stream 2 AG and Warnig also violated sanctions laws, US Secretary of State Antony Blinken decided to forgo penalties, which should create room for diplomatic-level talks with Germany to address the risks to Ukrainian and European energy security imposed by the pipeline, the report said.

Blinken said in a public statement Wednesday that Washington’s opposition to the pipeline is “unwavering” and the US will continue to oppose the completion of the project.

“Though we may not always agree, our alliances remain strong,” he said, adding that strengthening transatlantic relationships remain a matter of national security.

“Today’s actions demonstrate the Administration’s commitment to energy security in Europe, consistent with the President’s pledge to rebuild relationships with our allies and partners in Europe,” Blinken said.

The undersea pipeline connecting Russia and Germany has for years come under fierce criticism from Washington and some Eastern European countries, which believe it will make Europe more dependent on Russian energy supplies.

The German government has refused to halt the project, however, arguing that it is a commercial venture.

Germany and Russia had earlier reacted positively to reports that a waiver was coming.

German Foreign Minister Heiko Maas called the move “a constructive step” and said the pipeline was the only major issue over which the US and Germany had “fundamental differences.”

He said it was now necessary to see that “this project does not further burden our excellent cooperation in any way.”

Russian Deputy Foreign Minister Sergei Ryabkov said a waiver would signal “a touch of normalcy in US policy is emerging,” according to the Interfax agency.

Several US Republican lawmakers criticized the decision after the initial report, saying US President Joe Biden was playing into Russian President Vladimir Putin’s hands.

US news website Axios, citing unnamed sources, on Tuesday reported that the Biden administration would soon waive sanctions on the entity in charge of the nearly completed Nord Stream 2 AG, of which Russia’s Gazprom is the majority shareholder.

Nord Stream 2, which will deliver Russian gas into the European Union via a terminal in Germany, is 95-per cent finished.

Therefore, the only way to stop the project would have been to take direct action against Germany, one of Washington’s closest allies. According to Axios this was a step Biden was unwilling to take.

Supporters of the pipeline in Europe say US criticism of the project is guided less by security concerns than by concern over lost sales in Europe for American liquefied natural gas.

When finished, the pipeline is designed to deliver 55 billion cubic metres of gas per year from Russia to Germany. This could enable Russia to bypass the current route through Ukraine.