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U.S. waives sanctions on Nord Stream 2 as Biden seeks to mend Europe ties

CommoditiesMay 19, 2021 07:16PM ET
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© Reuters. FILE PHOTO: A road sign directs traffic towards the Nord Stream 2 gas line landfall facility entrance in Lubmin, Germany, September 10, 2020. REUTERS/Hannibal Hanschke/File Photo

By Timothy Gardner, Andrea Shalal and Steve Holland

WASHINGTON (Reuters) -The Biden administration waived sanctions on the company behind Russia's Nord Stream 2 gas pipeline to Germany and its chief executive, Secretary of State Antony Blinken said on Wednesday, a move decried by critics of the project in Congress.

A State Department report sent to Congress concluded that Nord Stream 2 AG and its CEO, Matthias Warnig, an ally of Russian President Vladimir Putin, engaged in sanctionable activity. But Blinken immediately waived those sanctions, saying that it was in the U.S. national interest.

The decision came as the Biden administration seeks to rebuild ties with Germany, after relations deteriorated under Republican former President Donald Trump. The waivers have no specific end date, but can be rescinded by the secretary of state.

The State Department imposed sanctions on four Russian ships, including the Akademik Cherskiy, which began pipe-laying for the project in Danish waters in April. It also imposed the measures on five other Russian entities, including the Russian Marine Rescue Service.

"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 in a release, issued as he met with Russian Foreign Minister Sergei Lavrov in Iceland for an Arctic Council conference.

President Joe Biden, a Democrat, has opposed the $11 billion project that would take Russian gas from the Arctic to Germany, saying it is a bad deal for Europe. The United States is an exporter of natural gas to Europe in the form of LNG, but Russian gas is cheaper.

Washington fears Russia could use Nord Stream 2 as leverage to weaken European Union states by increasing dependency on Moscow.

STOPPING PIPELINE IS A 'LONG SHOT'

Russia's state energy company, Gazprom (MCX:GAZP), and its Western partners are racing to finish the pipeline to send natural gas under the Baltic Sea. The project, now about 95% complete, would bypass Ukraine, depriving it of lucrative transit fees and potentially undermining its struggle against Russian aggression.

A U.S. official conceded that stopping the project would be difficult but that Washington would keep trying. "We inherited a pipeline that was over 90% complete and so stopping it has always been a long shot," the State Department official said.

At the rate it is being constructed, Nord Stream 2 will be finished before the end of the year, if not sooner, analysts said.

U.S. lawmakers from both parties who oppose the project said the sanctions did not go far enough, as Russia could likely continue work.

Senator Jim Risch, the senior Republican on the Senate Foreign Relations Committee, said the waivers will be "a gift to Putin that will only weaken the United States’ leverage in the lead up to the impending Biden-Putin summit."

Biden "should do everything possible to accomplish what the Trump administration failed to do for four years: stop the completion of the Nord Stream 2 pipeline for good," said Senator Bob Menendez, a Democrat and chair of the committee.

Yuriy Vitrenko, the new CEO of Ukraine's state-owned energy company, Naftogaz, said Nord Stream 2 is Russia's "most malign and dangerous geopolitical project" and that Ukraine would ask Washington to fully apply its laws and impose sanctions to stop the pipeline.

U.S. officials hope the waiver will give time for discussions with Germany on potential negative effects of the pipeline and provide some leverage to deepen cooperation on broader issues, such as the pandemic, climate change, the economic recovery and dealing with China and Russia.

The waiver also "provides space for diplomatic engagement with Germany to address the risks that a completed pipeline would pose to Ukraine and European energy security," the State Department official told reporters.

Germany has been pressing for the United States to drop its opposition to the project, arguing that the overall relationship was too important to sacrifice over what Berlin has described as a commercial project.

"We see this as a constructive step, which we are happy to further discuss with our partners in Washington," German Foreign Minister Heiko Maas told reporters.

Russian officials signaled on Wednesday that waivers could help mend Washington's fraught ties with Moscow.

U.S. waives sanctions on Nord Stream 2 as Biden seeks to mend Europe ties
 

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Comments (12)
Notvery Goodathis
Peteymcletey May 19, 2021 10:34PM ET
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Germany needed Trump. EU has been taking advantage of them for years.Biden is in bed with Russia. all his moves benefit Russia - trumps never did.
Jason Zou
Jason Zou May 19, 2021 8:10PM ET
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Sanctions or not, just a way to get what I want.
Millennial Dip Buyer
Millennial Dip Buyer May 19, 2021 7:08PM ET
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Feel bad for Germany and the EU.  They try so hard to be relevant but every single one of these disputes more or less amounts to "pipe down junior, men are talking".
Marco Sandri
Marco Sandri May 19, 2021 5:33PM ET
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Us Needs Russia against China, that's why they are "bending" on Nordstream 2
Silence Dogood
Silence Dogood May 19, 2021 5:33PM ET
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lol
Rahul Mishra
Rahul Mishra May 19, 2021 5:33PM ET
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Marco sandri. keep dreaming
danny Levine
danny Levine May 19, 2021 4:31PM ET
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obviously this is not Russian collusion LOL
Tony Coll
Tony Coll May 19, 2021 1:44PM ET
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And somehow, even though Trump was the Russia collusionist, Biden has been bending over backwards for all of Russia's demands. Wake up you woke mfers
Felipe Daniel
Felipe Daniel May 19, 2021 11:09AM ET
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Biden is soft on Russia, China and Iran. Everything Trump was criticized for Biden does worse
oeg vokar
oeg vokar May 19, 2021 10:58AM ET
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So Putin got his pipeline and few billions dollars next few decades to invest in better weaponry against America...few thousand death in Israel-Palestinian conflict....gas shortage in East USA....and it's only 6 months in Biden presidency! What a disaster would it in 3 and a half years?
Vlad Lozovskiy
Vlad Lozovskiy May 19, 2021 9:07AM ET
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Russia loves Biden and Democrats! They are so tough on Putin!!!
Me comment
Me comment May 19, 2021 9:07AM ET
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Way tougher than trump who was buddy buddy with Putin.
William Smith
William Smith May 19, 2021 9:07AM ET
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Me Comment, where do you come up with such ridiculously false and ignorant of fact comments? Dont ever let facts come between you and the leftist media lies you propagate must be your modis operandi.
Felipe Daniel
Felipe Daniel May 19, 2021 9:02AM ET
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Democrats critized Trump for Russian collusion, which was not proven. Compared to present time Biden is giving Putin a free pass by allowing this pipeline to make Germany dependant of Russia’s oil. The mainstream media does everything possible to cover for Biden and Democrats but can see the hypocrisy.
Me comment
Me comment May 19, 2021 9:02AM ET
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I guess that is Germanies problem now isn't it.
Felipe Daniel
Felipe Daniel May 19, 2021 9:02AM ET
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Me comment but it shows the hypocrisy of Democrats
Joel Hauser
Joel Hauser May 19, 2021 8:55AM ET
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President Joe Biden is a smart pragmatic man he doesn't take sudden rash decisions like mr.T and tweet about it.
Felipe Daniel
Felipe Daniel May 19, 2021 8:55AM ET
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Tell me one accomplishment of Biden?
Vlad Lozovskiy
Vlad Lozovskiy May 19, 2021 8:55AM ET
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You mean demented man.
Felipe Daniel
Felipe Daniel May 19, 2021 7:31AM ET
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Biden selling out America to Putin, how hypocritical when the Democrats accused Trump of Russian Collusion but now they are the ones helping Putin!
Mase Gumbo
Mase Gumbo May 19, 2021 7:31AM ET
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looool..
 
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