ECONOMY

Biden to waive Trump-era sanctions on operator of Russian pipeline

The US will waive sanctions on the company in charge of the Nord Stream 2 natural gas pipeline, a senior Biden administration official said, a change of tack that removes a key bone of contention between Washington and Berlin.

“I have determined that it is in the national interest of the United States to waive the application of sanctions,” US secretary of state Antony Blinken said on Wednesday, referring to Nord Stream 2 AG, the company overseeing the project, as well as its chief executive Matthias Warnig and the company’s corporate officers.

Heiko Maas, the German foreign minister, saluted a “constructive step” that showed the US was “taking into account the really excellent relations that we’ve built up with the Biden administration”.

Nord Stream 2 will bring Russian gas directly across the Baltic Sea, bypassing Ukraine. Warnig, a former officer with the East German Stasi intelligence service, is a close ally of Russia’s president Vladimir Putin.

The US state department sent its regular 90-day report to Congress listing the entities involved in the pipeline that will be sanctioned. The list included the Russian ships laying the pipeline, but spared the company overseeing construction.

The waiver showed the US “taking a step towards us”, Maas said. “It’s an expression of the fact that Germany is an important partner for the US, one that it can count on in the future.”

Nord Stream 2 was “the only issue that [Germany and the US] have fundamental differences about”, and the hope in both countries was that the project “will no longer strain the really excellent co-operation [between us] in any way whatsoever”, he added.

US president Joe Biden has been consistently critical of Nord Stream 2, describing it as a “bad deal for Europe”. The US says the pipeline will deprive Kyiv of lucrative gas transit fees and make it much more vulnerable to Kremlin pressure. US officials also argue it will also increase Europe’s dependence on Russian energy imports.

“Our opposition to the Nord Stream 2 pipeline is unwavering,” Blinken said, despite the granting of the waiver.

A senior state department official on Wednesday said “stopping this [project] has always been a long shot”.

“Our actions today have demonstrated that we continue to oppose the pipeline project, but we also are cognisant of the president’s commitment to rebuild relations with our European allies and partners,” the official added.

Blinken spoke to Maas on Tuesday, and a state department spokesman said he had “underscored the US commitment to work with allies and partners to counter Russian efforts to undermine our collective security”. “In that vein, [he] emphasised US opposition to the Nord Stream 2 pipeline,” the spokesman said.

But the decision to waive sanctions shows Washington is not willing to risk a damaging dispute over the project with one of its closest allies. Germany supports the pipeline, which it says is a crucial pillar of its energy security, and has condemned US extraterritorial sanctions against the project, calling them unwarranted interference in its internal affairs.

News of the exemption was greeted with dismay on Capitol Hill, where opposition to Nord Stream 2 is one of the few issues that Democrats and Republicans agree on.

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Bob Menendez, Democratic chair of the Senate foreign relations committee, released a statement saying he opposed the Biden administration’s decision to waive sanctions and he failed to see how the decision would advance US efforts to counter Russian aggression in Europe.

Representative Michael McCaul, a Republican, said the waiver would show the US government was never planning to stop the project. “If the Putin regime is allowed to finish this pipeline, it will be because the Biden administration chose to let it happen,” he said.

“Two months ago, President Biden called Putin a ‘killer,’ but today he’s planning to give Putin, his regime, and his cronies massive strategic leverage in Europe,” said Ben Sasse, a Republican senator from Nebraska.

The waiver will only be for the next 90 days. But Germany is confident that this will give the two countries time to overcome their remaining differences over Nord Stream 2.

Maas said the US and Germany should now use the time left till the next 90-day report to discuss “the particularly problematic aspects of the project”, especially the way “it has left Ukraine feeling threatened”.

“We have three months now . . . to talk with officials in Washington about how we proceed and how our two governments can reconcile the different positions that exist in Washington and Berlin on this issue,” he said.

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