The Biden administration cleared the way Wednesday for the resumption of sanctions on Russia’s Nord Stream 2 pipeline, lifting a security waiver on the company building the $11 billion pipeline.
Sanctions were halted in May last year, but Germany on Tuesday said it would halt the pipeline’s certification process in response to Russia’s decision to move troops into separatist-backed regions of Ukraine.
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“Yesterday, after further close consultations between our two governments, Germany announced that it would halt certification of the pipeline,” President Joe Biden said in a statement issued by the White House. “Today, I have directed my administration to impose sanctions on Nord Stream 2 AG and its corporate officers. These steps are another piece of our initial tranche of sanctions in response to Russia’s actions in Ukraine.”
Washington’s decision to lift the waiver comes as the United States and its allies impose sweeping economic penalties intended to curb Moscow’s aggression in Ukraine. Germany on Tuesday said it would halt the pipeline’s certification process in response to Russia’s decision to move troops into separatist-backed regions of Ukraine.
“Through his actions, President Putin has provided the world with an overwhelming incentive to move away from Russian gas and to other forms of energy,” Biden said. “I want to thank Chancellor Scholz for his close partnership and continued dedication to holding Russia accountable for its actions.”
Sanctioning the pipeline’s parent company, a Swiss firm owned by the Russian state-owned gas giant Gazprom, would functionally put an end to the project, a U.S. official told CNN.
A top adviser to Biden said Tuesday that halting the pipeline would levy a major financial blow to Moscow while ending its “geostrategic chokehold” over Europe through its supply of gas.
“First, after consultations overnight with Germany, Russia’s Nord Stream 2 natural gas pipeline will not become operational. That’s an $11 billion investment in a prized gas pipeline controlled by Russia that will now go to waste, and it sacrifices what would have been a cash cow for Russia’s coffers,” Daleep Singh, Biden’s deputy National Economic Council director, said at the White House.
“But it’s not just about the money,” he continued. “This decision will relieve Russia’s geostrategic chokehold over Europe through its supply of gas, and it’s a major turning point in the world’s energy independence from Russia.”
Biden’s press secretary said the decision by German Chancellor Olaf Scholz Tuesday “was not by accident.”
Psaki also defended the decision to block the Trump-era sanctions on the project last year, telling reporters in a press briefing that Biden “didn’t feel that issuing preemptive sanctions on that was the right step.”
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The move was criticized by lawmakers of both parties at the time, who viewed the pipeline as a coercive tactic designed to force increasing Western European dependence on Russian energy.
Congress passed bipartisan legislation in 2019 leveling sanctions against Nord Stream 2, which were expanded in 2020.
