The Biden administration will waive sanctions on the corporation and CEO overseeing the Nordsteam 2 pipeline construction, a source familiar tells Fox Business.
But at the same time, the State Department is expected to send its 90-day report to Congress listing entities involved in the pipeline’s construction that deserve sanctions. The State Department will acknowledge that the corporate entity in charge of the project, Nord Stream 2 AG and its CEO, the Putin crony and former East German intelligence officer Matthias Warnig, are engaged in sanctionable activity, according to Axios, which first reported the news.
The Nord Stream 2 deal with Russian President Vladimir Putin's regime will transfer Russian gas to Germany via a pipeline running under the Baltic Sea. If completed, this new pipeline would double the amount of natural gas Russia transports directly to Europe and hand an enormous geopolitical victory to Vladimir Putin.
In December, Congress passed legislation — the National Defense Authorization Act — that contained sanctions targeting companies and individuals involved in the Nord Stream 2 project.
Another source familiar with the issue tells Fox Business this conclusion had been hinted at weeks ago and that it signals the U.S. is not willing to sacrifice its close relationship with Germany over the pipeline. In February, Biden also froze former President Trump’s plan to withdraw American troops from Germany.
But on his first day in office, President Biden issued an executive order cancelling the Keystone XL pipeline at home in the U.S.
Still, a State Department spokesperson condemned the pipeline and said others who are involved risk sanctions.
"The Biden Administration has been clear that the Nord Stream 2 pipeline is a Russian geopolitical project that threatens European energy security and that of Ukraine and eastern flank NATO Allies and partners," the spokesperson said in a statement to Fox News. "We continue to examine entities involved in potentially sanctionable activity and have made it clear that companies risk sanctions if they are involved in Nord Stream 2. We will continue to underscore U.S. strong, bipartisan opposition to this Russian malign influence project."
The U.S. will continue to sanction ships involved in the building of Nord Stream 2 even though it refuses to sanction the company in charge of the project.
Currently, Russia has to transport gas through Ukraine on its way to Europe. Completion of the pipeline would allow Russia to freeze out its former client state Ukraine, now operating under a democracy.
Halting the 95 percent complete project would require sanctioning German users of the gas as well, and the Biden administration is not willing to risk its relationship with Germany to do so. The pipeline could be completed as soon as this summer.
The waiver of sanctions stands seemingly at odds with remarks Sec. Antony Blinken made in March. "President Biden has been very clear for a long time in his view that Nord Stream 2 is a bad idea," Blinken said in a news conference. "So what I said was that we will continue to monitor activity to complete or certify the pipeline, and if that activity takes place, we will make a determination on the applicability of sanctions."
The sanctions had bipartisan support, and Republicans were quick to call out the administration for waiving them.
"If these reports are true, they would indicate the Administration was never planning to do whatever it could to 'prevent the completion' of Nord Stream 2 – despite promises made to the contrary by Secretary Blinken in his confirmation hearing earlier this year," GOP Rep. Michael McCaul, Texas, top Republican on House Foreign Affairs Committee, said in a statement. "If the Putin regime is allowed to finish this pipeline, it will be because the Biden Administration chose to let it happen."
"Stunning. In defiance of U.S. law, Biden is actively helping Putin build his pipeline," Sen. Ted Cruz, R-Texas, wrote on Twitter. "Objectively speaking, the Biden administration is shaping up to be the most pro-Russia administration of the modern era."