Biden Weighing New Sanctions to Block Russian Gas Pipeline
(Bloomberg) -- The Biden administration is weighing additional sanctions to block construction of the nearly completed Nord Stream 2 pipeline from Russia to Germany, potentially including the project’s parent company Nord Stream 2 AG, according to three people familiar with the matter.
The sanctions could come in the form of an interim report that may also single out an insurance company that has been working with the vessels laying the pipeline in the Baltic Sea as well as other companies providing support vessels and materials to the project, according to the people, who asked not to be identified because of the sensitive nature of the deliberations.
U.S. lawmakers from both parties have been pressing the Biden administration to take stronger action to stop Gazprom PJSC’s project after a congressionally-mandated report released last month named only one vessel -- the Russian-flagged Fortuna -- as subject to sanctions.
There’s concern in the U.S. and some European countries that the pipeline, which is almost complete, could increase the Kremlin’s leverage over Germany and other North Atlantic Treaty Organization allies.
A spokeswoman for Nord Stream 2 AG said the company couldn’t comment on political debates but that the commissioning of the pipeline is “in the interest of Europe’s energy security, European consumers” and the European Union’s “economic competitiveness.”
“The implementation of Nord Stream 2 is based on construction permits from authorities in four EU countries and Russia in compliance with legal requirements from national legislation, EU law and international conventions,” Irina Vasilyeva said in an emailed statement.
The Russian Embassy in Washington didn’t immediately respond to an emailed query on Thursday evening.
The Treasury Department didn’t immediately respond to a request for comment. The White House pointed to a statement from Secretary of State Antony Blinken that said the administration is closely tracking efforts to complete the pipeline as well as the companies involved in the project.
“The sanctions legislation Congress passed in 2019 and expanded in 2020 has significant support from a bipartisan congressional majority,” Blinken said in the statement on Thursday. “The Biden administration is committed to complying with that legislation. The department reiterates its warning that any entity involved in the Nord Stream 2 pipeline risks U.S. sanctions and should immediately abandon work on the pipeline.”
The administration would look “very carefully” at sanctioning Nord Stream 2 AG, Blinken said during a House Foreign Affairs Committing hearing last week.
President Joe Biden has made a marked shift in the U.S. approach to Russia from that of former President Donald Trump.
In an interview with ABC News on Tuesday, Biden was asked whether he believes that Russian President Vladimir Putin is a “killer” and responded “I do.” He also said Russia would pay a price for suspected interference in U.S. elections.
Separately, the U.S. Office of the Director of National Intelligence released a report this week saying intelligence agencies have concluded that Putin ordered influence operations aimed at hurting Biden’s campaign for the presidency and favoring Trump. Russia has long denied meddling in U.S. elections.
Senator Ted Cruz, a Texas Republican, removed a hold he had placed on two of Biden’s nominees after Blinken issued his warning on Thursday. Cruz and Senator Jeanne Shaheen, a New Hampshire Democrat, were instrumental in passing two rounds of sanctions against the pipeline in the past two defense spending bills.
Cruz said that “in light of the secretary’s strong declaration,” he was lifting his holds on the nominations of William Burns as director of the Central Intelligence Agency and Brian McKeon as deputy secretary of state. Burns and McKeon were confirmed later Thursday by a voice vote in the Senate.
He said he would continue to block confirmation of Wendy Sherman to be Blinken’s deputy as well as future State Department nominees “until the full sanctions mandated by Congress are in fact broadly imposed against the ships and companies critical to completing the pipeline.”
Administration officials have said imposing the sanctions isn’t as easy as Republican lawmakers contend because proving violations isn’t clear cut. And the administration will ultimately have to decide whether sanctioning German entities is worth the inevitable political fallout. German Chancellor Angela Merkel has been a supporter of the project.
Senator Bob Menendez of New Jersey, the Democratic chairman of the Senate Foreign Relations Committee, said during a recent hearing that he was encouraging the administration to “accelerate” its efforts on the pipeline, noting the bipartisan support for the sanctions.
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