President Joe Biden on Feb. 23 announced sanctions against the company behind the construction of the Nord Stream 2 natural gas pipeline because of Russia’s actions in Ukraine, after Germany put a hold on the project that connects Russia and Germany.
The sanctions affect Nord Stream 2 AG and its corporate officers, according to a White House statement on Feb. 23. The Swiss-based firm’s parent company is Gazprom, the Russian state-owned energy giant.
On Feb. 21, Russian President Vladimir Putin declared two regions within Ukraine to be independent and then signed a decree authorizing ‘peacekeeping’ troops to move into the two breakaway regions.
In response, German Chancellor Olaf Sholz announced a halt to the certification of Nord Stream 2—a project representing an $11 billion investment from Russia that, if certified, would carry 55 billion cubic meters of natural gas from Russia to Germany every year.
The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued a general license authorizing the “wind-down” of transactions involving Nord Stream 2 AG.
“These steps are another piece of our initial tranche of sanctions in response to Russia’s actions in Ukraine,” Biden said in the statement. “As I have made clear, we will not hesitate to take further steps if Russia continues to escalate.”
The new measures come in addition to the U.S. sanctions against the two breakaway Ukrainian regions announced on Feb. 21, and sanctions against state-owned Russian banks and Russian elites that Biden announced a day later. These were taken in coordination with members of the European Union, as well as the United Kingdom, Canada, Japan, and Australia.
Russian troops remain in attack position for further invasion of Ukraine, White House press secretary Jen Psaki told reporters on Feb. 23; she affirmed that the United States is prepared to impose further sanctions in the event of further Russian aggression.
While Psaki indicated that the bite of sanctions has yet to be felt by the Russian economy, she noted the current 11 percent borrowing cost for Russia, a 9.5 percent Russian inflation rate, and the ruble trading at its lowest level since March 2020.
“So [Putin] is looking at the impact on his own economy, on his rich and wealthy oligarch friends, and on the people of Russia,” she said. “These are the facts, regardless of what you’re hearing from the Kremlin about the impact.”
Biden has acknowledged that Americans will likely see increased costs at the gas pump as a result of the sanctions against Russia, although he said his administration is using “every tool at our disposal” to limit the effect on gas prices.