REUTERS

The Joe Biden Administration has waived sanctions on Nord Stream 2 AG, the corporate entity in charge of the construction of Russia's Nord Stream 2 natural gas pipeline into Germany, and its CEO Matthias Warnig, dubbed by media as an ally of Russian President Vladimir Putin.

This was announced in a press statement by U.S. Secretary of State Antony Blinken.

According to Blinken, the Department of State on May 19, 2021, submitted a report to Congress pursuant to the Protecting Europe's Energy Security Act (PEESA), as amended, listing four vessels, five entities, and one individual involved in construction of the Nord Stream 2 pipeline, including Nord Stream 2 AG and the company's CEO Matthias Warnig. Persons identified in the report are subject to sanctions pursuant to PEESA unless waived. 

Read alsoU.S. State Department: Administration committing to using all tools to stop Nord Stream 2

As a result of such sanctions on the entities listed in the PEESA report, the four vessels listed in the report and nine additional vessels owned or controlled by the Federal State Budgetary Institution Marine Rescue Service that are involved in the Nord Stream 2 pipeline's construction, will also be subject to sanctions.

"Furthermore, I have determined that it is in the national interest of the United States to waive the application of sanctions on Nord Stream 2 AG, its CEO Matthias Warnig, and Nord Stream 2 AG's corporate officers," Blinken said.

Treasury's Office of Foreign Assets Control (OFAC) also anticipates issuing guidance allowing for the continuation of various transactions and activities involving the Marine Rescue Service that are unrelated to Nord Stream 2 construction – including on a range of search and rescue, environmental, and other missions.

"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. We will continue to oppose the completion of this project, which would weaken European energy security and that of Ukraine and Eastern flank NATO and EU countries. Our opposition to the Nord Stream 2 pipeline is unwavering. Though we may not always agree, our alliances remain strong, and our position is in line with our commitment to strengthen our Transatlantic relationships as a matter of national security," he said.

Nord Stream 2: Background

  • The Nord Stream 2 project envisages the construction and operation of two gas pipeline branches with a total throughput capacity of 55 billion cubic meters of natural gas per year from the coast of Russia through the Baltic Sea to Germany. It should connect Russia's Ust-Lug and Germany's Greifswald.
  • This new pipeline bypassing Ukraine is to be built next to the existing Nord Stream 1 pipeline. The construction of the pipeline was expected to be completed before the end of 2019. The pipeline will be 1,220 km long.
  • Russia's natural gas giant Gazprom is the founder of Nord Stream 2 AG.
  • The project is being financed by European companies – France's ENGIE, Austria's OMV, Royal Dutch Shell, as well as Germany's Uniper and Wintershall.
  • Ukraine stands against the construction of Nord Stream 2 as it will most likely lose its status of a gas transit country, while its potential revenue losses are estimated at US$3 billion annually. The project is also highly criticized by the U.S., Poland, and the Baltic States.
  • The Nord Stream 2 gas pipeline has already been completed by more than 90%.
  • The United States has imposed a series of sanctions on Nord Stream 2 and has repeatedly called on European allies and private companies to stop the related works.
  • On January 7, 2021, a fund was established in Germany to support the completion of the Nord Stream 2 project.
  • Eighteen companies have already refused to participate in the project or are planning to do so because of the sanctions.
  • On February 6, 2021, Nord Stream 2 AG announced it would continue to lay the pipes as part of the project.
  • On March 14, 2021, Executive Vice-President for the European Green Deal Frans Timmermans said that Europe did not need the Nord Stream 2 pipeline. Despite this, Germany continues to insist on the completion of the project.
  • On March 19, 2021, U.S. Secretary of State Antony Blinken called on the companies involved in the construction of Nord Stream 2 to immediately halt laying pipes, threatening new sanctions.
  • Ukrainian President Volodymyr Zelensky called Russia's Nord Stream 2 gas pipeline a trap for all countries across Europe.
  • On April 20, 2021, German Chancellor Angela Merkel said Ukraine should remain a transit country for Russian gas to Europe, despite Germany's decision to complete the construction of the Russian Nord Stream 2 gas pipeline.
  • In early May, Germany's Nature and Biodiversity Conservation Union (NABU) and Deutsche Umwelthilfe (Environmental Action Germany) filed a lawsuit with the Hamburg Administrative Court against the construction of the Nord Stream 2 gas pipeline in Germany's exclusive economic zone.
  • On May 17, 2021, Germany allowed the construction of Nord Stream 2 to continue in its waters.