State Dep’t Announces More Nord Stream 2 Sanctions, But Again, Not Against Key Players

By Patrick Goodenough | November 23, 2021 | 4:13am EST
Work underway on the Nord Stream 2 natural gas pipeline's sector in northeastern Germany. (Photo by Tobias Schwarz/AFP via Getty Images)
Work underway on the Nord Stream 2 natural gas pipeline's sector in northeastern Germany. (Photo by Tobias Schwarz/AFP via Getty Images)

(CNSNews.com) – The Biden administration on Monday announced sanctions against a Russian-linked shipping company and vessel involved in the Nord Stream 2 pipeline, declaring that it “continues to oppose” the soon-to-be-operational project – despite the fact it’s waiving sanctions against the main actors behind it.

As it’s obliged by law to do every 90 days, the State Department sent a report to Congress identifying as parties involved in the Russia-to-Germany undersea natural gas pipeline Transadria Ltd. and its ship, the Marlin.

Secretary of State Antony Blinken said in a statement that with this latest action, the administration has now sanctioned a total of eight persons and identified as “blocked property” 17 of their vessels.

“Even as the administration continues to oppose the Nord Stream 2 pipeline, including via our sanctions, we continue to work with Germany and other allies and partners to reduce the risks posed by the pipeline to Ukraine and frontline NATO and E.U. countries and to push back against harmful Russian activities, including in the energy sphere,” he said.

The statement was silent, however, on Blinken’s decision in an earlier report to Congress, last May, to waive sanctions against the key players in the controversial project – the Nord Stream 2 AG consortium, which is led by the Russian state-owned Gazprom, and its corporate officers including its German CEO Matthias Warnig, a longstanding crony of Russian President Vladimir Putin.

The department justified those waivers on the grounds of “national interest,” arguing that going ahead with sanctions in those instances would have upset relations with Germany, an important ally.

Construction that had come to an abrupt halt last year as a result of earlier sanctions threats continued, and the pipeline was reported to have been completed on September 10. It is now awaiting certification – stalled by technical issues – before the gas begins to flow.

Russia accounts for around 35 percent of Europe’s natural gas needs, with Germany the biggest consumer.

Opponents of Nord Stream 2, both in the United States and in Europe, say that it will make Europe even more reliant on Moscow for energy supplies than it is already, and expose it to the whims of a government that has a history of using its resources as a lever in political disputes.

Countries formerly in Russia’s orbit are particularly leery, with Poland’s parliament voting 452-1 last June to urge Germany and others to halt the project.

The European Parliament has voted three times, also by large margins, for anti-Nord Stream 2 resolutions.

Ukraine, which is deeply at odds with the Kremlin, is potentially the most vulnerable. Kyiv earns badly-needed transit revenue from Russian gas piped across its territory en route to European markets and worries that they will be affected once Nord Stream 2 is operating.

In a bid to allay those concerns, the Biden administration in July struck an agreement with Germany, which undertook to use its leverage with Russia to help Ukraine negotiate an extension of its gas transit contract with Moscow beyond its Dec. 2024 expiry date.

Berlin also agreed to contribute 150 million euros ($168 million) to a new “green fund” designed to support Ukraine’s energy security.

‘Surrendered to Putin’

Opposition in the U.S. Congress to Nord Stream 2 prompted Sens. Ted Cruz (R-Texas) and Jeanne Shaheen (D-N.H.) to author bipartisan legislation mandating sanctions against the pipeline. It passed the Senate and House in December 2019, and on the day President Trump signed it into law – before sanctions had even been imposed – work on the pipeline was suspended

Over recent months, Cruz has held up confirmation of a number of State Department nominees to protest its approach to the pipeline – to the frustration of the department and Democrats on the Senate Foreign Relations Committee.

“One of the first things Joe Biden did was surrender to Vladimir Putin on Nord Stream 2,” Cruz told CBS News’ “Face the Nation” on Sunday.

 

“He gave Putin a multi-billion-dollar pipeline – a pipeline that we had stopped. I had authored bipartisan sanctions legislation. Democrats and Republicans overwhelmingly supported my legislation, and we killed that pipeline dead.”

Cruz said he believed allowing the pipeline to go ahead would be “a generational geopolitical mistake.”

“If this pipeline is allowed to go online it will give billions of dollars to Russia. They will use it for military aggression against America and our allies,” he said. “It will undermine European security, American security and it enriches Russia.”

“And Biden simply surrendered to Putin. That was a mistake. And so I placed a hold on these nominees in order to try to pressure Biden to follow the law.”    

The administration has argued that although it opposes Nord Stream 2 the project was 90 percent complete by the time it took office, and there was nothing that sanctions could have done to prevent its completion.

Cruz and several GOP colleagues including Senate Foreign Relations Committee ranking member Jim Risch (R-Idaho) have introduced an amendment to the FY2022 National Defense Authorization Act designed to stop the pipeline by imposing mandatory sanctions on Nord Stream 2 AG, and repealing the national interest waiver authority invoked by Blinken last May in letting the company and its CEO off the hook.

Senate Foreign Relations Committee chairman Bob Menendez (D-N.J.), who has clashed with Cruz over his nominee holds, submitted an NDAA amendment of his own last Thursday that includes sanctions against those “responsible for the planning, construction, or operation” of Nord Stream 2, but ties them to a presidential determination on Russian hostile actions towards Ukraine.

Votes on the long-stalled NDAA have been delayed until after Thanksgiving.

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