Nord Stream 2 developer to be excluded from US sanctions designation: Maas

German foreign minister Heiko Maas on May 19 said the US would not impose sanctions against the developer of the Nord Stream 2 gas pipeline from Russia to Germany, which he described as a "constructive" step in relations between Washington and Berlin.

President Joe Biden's administration is due to submit a report imminently to the US Congress on which entities involved in Nord Stream 2 should be designated as sanctionable under US law.

Two entities -- the pipelaying vessel Fortuna and its Russian owner KVT-RUS -- were identified in the previous report to Congress issued on Feb. 19.

There have been calls from Congress in recent weeks for more entities to be designated under the various sanctions legislation in place in the US, including service companies, insurers and certification companies.

Reports are due every three months on how the US sanctions against Nord Stream 2 are being implemented.

Maas, speaking during a press conference May 19, said sanctions against Nord Stream 2 AG -- the Switzerland-based company developing the pipeline -- and its CEO Matthias Warnig would be subject to a presidential waiver, meaning they are excluded from being sanctionable.

"This is a constructive step and we will continue dialogue with our partners in Washington," Maas said.

He said there was no way of knowing what Washington might do when the next report to Congress is due in three months' time. "We have three months now to discuss the subject with Washington," he said.

German Chancellor Angela Merkel acknowledged in early May that the US and Germany continued to have differing views over the project.

Baerbock pledge

Germany has in the past criticized the US extra-territorial sanctions against Nord Stream 2, and continues to defend it, saying it would bring more gas supply security to Germany.

However, Annalena Baerbock, the leader of the German Green Party, which is currently doing well in polls ahead of the next German parliamentary election in September, said this week she would not allow Nord Stream 2 to be finalized.

The pipeline remains incomplete after the threat of US sanctions prompted Switzerland-based Allseas to halt work in December 2019.

Currently two Russian vessels are operating in Danish waters -- the Fortuna and the Akademik Cherskiy -- to lay the remaining kilometers of the pipeline, estimated at less than 100 km.

The US has a number of legislative tools at its disposal for applying sanctions against companies involved in Nord Stream 2's completion.

They include the 2020 National Defense Authorization Act, or NDAA, which in December 2019 forced Allseas to halt work, and its updated version approved in 2021 that includes new provisions related to Nord Stream 2 under the Protecting Europe's Energy Security Clarification Act, or PEESCA.

These expand the threat of US sanctions against companies that provide services to ships laying the Nord Stream 2 pipe and companies that carry out pipeline testing, inspection or certification activities.

Sanctions can also be imposed under the separate Countering America's Adversaries Through Sanctions Act, or CAATSA.