State Department names only one company to face U.S. sanctions over pipeline construction
The U.S. said it has seen progress as a result of European companies withdrawing from the construction of the Nord Stream 2 pipeline, which would connect Russia and Germany, but critics are calling for more decisive action.
In a report requested by Congress, the State Department named 18 mostly Western companies that will not be sanctioned, the foreign policy agency and lawmakers said.
The companies have made “a good-faith effort to wind down activities related to Nord Stream-2,” State Department spokesman Ned Price told reporters.
“It shows that lawmakers’ goals and our actions are having a good result,” he said, referring to the rejection of the project by the two major U.S. parties, which dates back to the days of former President Donald Trump.
Price named only one company that would be subject to U.S. sanctions. This is the Russian company KVT-Rus, which, he said, is involved in laying pipes for Nord Stream 2.
The company owns the Fortuna, a Russian pipe-laying vessel involved in the construction of Nord Stream 2, which is included by the U.S. Treasury Department on the sanctions list under the Protection of European Energy Security Act (PEESA).
A month earlier, it had fallen under U.S. restrictive measures under the Countering America’s Adversaries Through Sanctions Act (CAATSA).
The sanctions mean blocking the assets of legal entities and prohibiting banking operations on U.S. territory.
The first sanctions against Fortuna and KVT-Rus were imposed by the U.S. on January 19.
Despite the imposition of restrictive measures, the pipelayer continued work to complete Nord Stream 2.
Work is now underway in Danish territorial waters.
Biden continues to criticize Nord Stream 2, saying it emboldens Russia and weakens the leverage of vulnerable countries such as Ukraine.
President Biden thinks Nord Stream 2 is a bad deal, White House press secretary Jen Psaki said during a briefing.
“It’s a bad deal because it divides Europe, it exposes Ukraine and Central Europe to manipulation by Russia, and because it goes against Europe’s stated energy and security goals,” she stressed.
“We continue to monitor activities to complete or certify the pipeline, and if such activities occur, we will decide whether sanctions are necessary,” Jen Paskey said.
“They are just one of many important tools to ensure energy security,” she said. – So we will also work with our allies and partners to strengthen European energy security.”
At the same time, the Biden administration pledges to work more actively with European countries, including Germany, which says the project is vital to energy supplies, despite concerns about Russia.
“As for our allies and partners, it’s fair to say that our actions will not take them by surprise,” Price said.
“We will continue to monitor activities that could lead to additional penalties, including sanctions, but I think it would be wrong to think of sanctions as the only tool in our toolbox,” he added.
In an article published in Politico magazine, Polish Foreign Minister Zbigniew Rau and his Ukrainian counterpart Dmitry Kuleba warned that Russia is “dangerously close” to completing Nord Stream 2.
Ukrainians are convinced that if it succeeds, their security will not be of concern to the West, they wrote.
“We call on U.S. President Joe Biden to use all means at his disposal to prevent the completion of the project,” they wrote.
Republican lawmakers in turn accused Biden of reneging on his promises to toughen his approach to Russia.
“This report is a gift to Russia and its efforts to undermine European energy security, destabilize Ukraine, promote corruption and its detrimental influence across Europe,” said Jim Risch, the top Republican on the Senate Foreign Relations Committee.