The Biden administration will waive sanctions on the corporate entity and CEO overseeing the construction of Russia’s Nord Stream 2 pipeline into Germany, according to two sources briefed on the decision.
Why it matters: The decision indicates the Biden administration is not willing to compromise its relationship with Germany over this pipeline, and it underscores the difficulties President Biden faces in matching actions to rhetoric on a tougher approach to Russia.
Driving the news: The State Department will imminently send its mandatory 90-day report to Congress listing entities involved in Nord Stream 2 that deserve sanctions. Sources familiar with the drafting of the report tell Axios the State Department plans to call for sanctions against a handful of Russian ships.
– The State Department will also acknowledge that the corporate entity in charge of the project (Nord Stream 2 AG) and its CEO (Putin crony and former East German intelligence officer Matthias Warnig) are engaged in sanctionable activities.
– However, the State Department will waive the applications of those sanctions, citing U.S. national interests.
– This planned move seems at odds with Secretary of State Antony Blinken’s statement, made during his confirmation hearing: “I am determined to do whatever we can to prevent that completion” of Nord Stream 2.
Between the lines: This planned move also sets up a bizarre situation in which the Biden administration will be sanctioning ships involved in the building of Nord Stream 2 but refusing to sanction the actual company in charge of the project.
– Sources close to the situation say that top Biden officials have determined that the only way to potentially stop the project — which is 95% complete — is to sanction the German end users of the gas.
– And the Biden administration is not willing to rupture its relationship with Germany over Nord Stream 2.
The big picture: As Axios has previously reported, the completion of Nord Stream 2 would be a huge geopolitical win for Putin and give him substantial new leverage in Europe.
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