Biden administration to waive sanctions for head of Nord Stream 2 pipeline

The new move from the Biden administration is likely to draw criticism from lawmakers who have argued that several pipe-laying vessels and entities, including Nord Stream 2 AG and its CEO, could be subject to sanctions under the Protecting Europe’s Energy Security Act of 2019, known as PEESA.

The State Department’s report will call for four companies and four ships that are supporting the pipeline construction to be put on the sanctions list, sources said.

News of the waiver was first reported by Axios.

A State Department spokesperson did not comment on the waivers for Warnig or his company, which is owned by Russian gas company Gazprom.

“The Biden Administration has been clear that the Nord Stream 2 pipeline is a Russian geopolitical project that threatens European energy security and that of Ukraine and eastern flank NATO Allies and partners,” the spokesperson said. “We continue to examine entities involved in potentially sanctionable activity and have made it clear that companies risk sanctions if they are involved in Nord Stream 2.”

Sanctions against firms building or financing the pipeline, which would deliver natural gas from Russia to Germany, has bipartisan support in Congress. But the Biden administration is keen to maintain a good relationship with the German government, which has supported the project.

Republican lawmakers in particular had pushed the Biden administration to use financial punishments to stop the pipeline.

“If the Putin regime is allowed to finish this pipeline, it will be because the Biden Administration chose to let it happen,” Rep. Michael McCaul (R-Texas) said via a statement from his office. “I want to be clear: this pipeline is not a simple commercial project that could frustrate our relationship with Berlin. It is a Russian malign influence project that threatens to deepen Europe’s energy dependence on Moscow, render Ukraine more vulnerable to Russian aggression and provide billions of dollars to Putin’s coffers.“

Sanctions against the ship companies building the pipeline could still delay the completion of Nord Stream 2, which is more than 90 percent complete, the sources said. Opponents of the pipeline are also looking to the German Green Party, which has opposed the pipeline, to win seats in parliamentary elections scheduled for September.