EU gas directive According to the amended EU gas directive, the EU extended its gas market rules to external pipelines entering the EU internal gas market. It applies to all pipelines which were completed after 23 May 2019 when amended directive entered into force. Additional legal concerns relate to
international trade law and to the
law of the sea in connection with Nord Stream 2's route through the Danish territorial waters around
Bornholm. Nord Stream 2 AG had started legal proceedings in the
Court of Justice of the European Union to annul the amended directive and also started arbitration against the EU under the
Energy Charter Treaty. Although Russia has not ratified the Energy Charter Treaty and has terminated its provisional application, both the EU and Switzerland — a domicile of Nord Stream 2 AG — are contracting parties of it.
US sanctions and subsequent waiver and negotiations In June 2017,
new US sanctions against Russia targeting the pipeline were passed by a 98–2 majority in the
United States Senate due to concerns that President Trump would ease existing sanctions on Russia. The sanctions were sharply criticized by Germany, France, Austria and the
European Commission who stated that the United States was threatening
Europe's energy supplies. In a joint statement, Austrian Chancellor
Christian Kern and German Foreign Minister
Sigmar Gabriel said, "Europe's energy supply is a matter for Europe, and not for the United States of America." They also said: "To threaten companies from Germany, Austria and other European states with penalties on the US market if they participate in natural gas projects such as Nord Stream 2 with Russia or finance them introduces a completely new and very negative quality into European-American relations."
Isabelle Kocher, chief executive officer of Engie, criticised American sanctions targeting the projects, and said they were an attempt to promote American gas in Europe.
Olaf Scholz, German Finance Minister at the time, called the sanctions "a severe intervention in German and European internal affairs", while the EU spokesman criticized "the imposition of sanctions against EU companies conducting legitimate business."
Heiko Maas, German Foreign Minister at the time,
tweeted that "European energy policy is decided in Europe, not in the United States". Russian Foreign Minister
Sergey Lavrov also criticized sanctions, saying that
United States Congress "is literally overwhelmed with the desire to do everything to destroy"
Russia–United States relations. The German Eastern Business Association said in a statement that "America wants to sell its liquefied gas in Europe, for which Germany is building terminals. Should we arrive at the conclusion that US sanctions are intended to push competitors out of the European market, our enthusiasm for bilateral projects with the US will significantly cool." In January 2019, the US ambassador in Germany,
Richard Grenell, sent letters to companies involved in the construction of Nord Stream 2 urging them to stop working on the project and threatening with the possibility of sanctions. In December 2019, the US Congress approved sanctions on companies and governments working on the pipeline, to which German Foreign Minister
Heiko Maas responded, urging the US not to meddle in European energy policy. Following the US Senate's
vote to override the Trump administration's veto of the defense bill containing punitive measures on the pipeline, the US State Department alerted companies of sanctions risk they face, urging them to pull out from the project. According to a PolitiFact "fact check", the sanctions did not impede construction of the pipeline. In December 2019, with overwhelming support from Democrats and Republicans, the US Congress imposed sanctions on any firm aiding in the building of the pipeline as part of the
annual defense policy bill. The pipeline's construction was stalled for a year until Russia secured its own vessels to complete the job. Following incoming President Joe Biden's inauguration in January 2021, the
White House reaffirmed long standing US opposition to Nord Stream stating that Biden "continues to believe that Nord Stream 2 is a bad deal for Europe" and that his administration "will be reviewing" new sanctions. According to congressional aides cited in a February report by NBC News, the sanctions enjoyed "strong bipartisan support" on
Capitol Hill. On 19 May 2021, the United States President
Joe Biden waived sanctions on Nord Stream 2 AG and its CEO
Matthias Warnig, in a move that was opposed by both Republican and Democratic lawmakers, with Republican senator
Jim Risch saying it was "a gift to Putin and will only weaken the United States". Russian and German officials welcomed the sanctions waiver, but
Yuriy Vitrenko of
Naftogaz criticized the move and said Ukraine would press Washington to impose sanctions to stop the pipeline. On 25 May at the White House, President Biden told reporters that he waived the sanctions because the pipeline was nearly completed and because they would have hurt relations with Europe. In protest against the Biden administration's policies, senator
Ted Cruz held up dozens of diplomatic nominations, telling CNN "I look forward to lifting the holds just as soon as they impose the sanctions on Nord Stream 2 that are required by federal law." According to PolitiFact, this positive signal to Germany and Russia was accompanied by sanctions on other areas of Russian industry as part of a changing strategy to reopen negotiations over Ukraine. Russian Deputy Foreign Minister
Sergei Ryabkov welcomed the move as "a chance for a gradual transition toward the normalisation of our bilateral ties". Ukrainian President
Volodymyr Zelensky said he was "surprised" and "disappointed" by Biden's decision. Biden also waived sanctions on the Nordstream CEO, Matthias Warnig, an ally of Russian President Vladimir Putin. On 22 November 2021, the US State Department announced that it had imposed further sanctions on a Russian vessel and a "Russian-linked entity". Washington Post reported that Biden obtained a promise from Angela Merkel in summer 2021 and that Nord Stream 2 would not be sanctioned, but that Germany would support other sanctions and that Germany would scrap Nord Stream 2 if Russia invaded Ukraine. By the time Russia invaded in 2022, Olaf Scholz had replaced Merkel, but Scholz kept the promise. On 21 July 2021, the US and Germany proposed an agreement to complete the Nord Stream 2 pipeline while shielding Ukraine and other Central and Eastern European countries from any future Russian efforts to use the pipeline as a geopolitical weapon. The deal was immediately opposed by Ukraine and Poland and US lawmakers on both sides of the aisle, with
Foreign Policy reporting that it had become a "lightning rod issue" and that "Biden's post-Trump-era honeymoon period with some Eastern European allies has come to a screeching halt."
Deutsche Welle reported that the deal promoted "strong condemnation" from Poland, with government spokesman
Piotr Müller saying "We have emphasized from the very beginning that Nord Stream 2 is a geopolitical project that destabilizes the political situation in central and eastern Europe." Lithuanian Prime Minister
Ingrida Šimonytė called the project a "mistake" saying it was not just for its economic impact on Ukraine, but for the EU's increased dependence on a country where there is no rule of law. In November 2021, a group of Senate Republicans led by senator Risch renewed efforts to impose sanctions on the pipeline, also as an amendment to the
National Defense Authorization Act (NDAA) defense bill. In response, the Biden administration reportedly lobbied Democratic allies to nix the sanctions amendments, and Secretary of State
Antony Blinken and top aides reportedly made calls urging senators to kill the sanctions amendments that would remove leeway for a White House waiver. Republicans stalled the bill from passing on 29 November, but it passed the next week on 7 December, omitting the sanctions amendments despite strong support for them in Congress. On 13 January 2022, US Senator Ted Cruz introduced a bill to reimpose the waived sanctions regardless whether Russia invaded Ukraine. Democrats favored a more extensive version which would impose a wider range of sanctions besides those on Nord Stream 2. The bill was voted on with 55 senators (49 Republicans, 6 Democrats) in favor, and 44 Democrats who opposed the bill with Senate Foreign Relations Chair
Bob Menendez arguing that imposing immediate sanctions centered on Nord Stream 2 regardless if Russia invaded Ukraine would give Putin one less reason not to invade and that sanctions would have to go far beyond Nord Stream to be effective. The Cruz bill failed to secure 60 votes needed for passage but Senators continued work towards a bill expanding sanctions far beyond those on Nord Stream. Following reports of
Russian troops massing near the border with Ukraine and fears of
an invasion, US Secretary of State Antony Blinken announced new sanctions on 23 November, targeting eight people and 17 vessels as "pursuant to PEESA in connection with Nord Stream 2". In order to provide strong incentives for Russia not to invade Ukraine, bill sponsor Senator Bob Menendez argued that sanctions would have to be devastating to the entire Russian economy, and that every Russian would have to feel them. would impose significant compliance challenges for companies doing business in Russia, not just Nord Stream and its European and Russian backers. Although both parties had reached agreement on central parts of the plan, by mid February Biden and US intelligence agencies were briefing allies and Congressional leaders that Russia would likely invade. The work on the sanctions bill was paused and replaced with a declaration critical of Russia's provocative and reckless military buildup along Ukraine's border and warning Putin to cease his threats to Ukraine and NATO. Earlier in the month, Menendez and Senate minority leader
Mitch McConnell had been personally assured during a visit by German Chancellor Scholz that if Russia invaded, Nord Stream 2 would be halted. criticized the United States's
sanctions against Russia that target EU–Russia energy projects.
Regulatory clearance by Germany In late October 2021, the approval of the pipeline was still in process as permits were expected from the German regulatory
Federal Network Agency () and finally from the European Commission later that year. The German agency still awaited the processing of applications by the Ukrainian gas company
Naftogaz and the Ukraine gas grid company GTSOU. Poland also voiced opposition to the approval of the pipeline as it feared a lack of Russian gas transits through its territory. However, spokesperson for the German Ministry of Economy Beate Baron said on 22 October 2021 "all the available capacities for natural gas supplies from Russia to Europe are used". Earlier that week, the Swiss-based operator confirmed it had filled the first line of the pipeline with "technical" gas. On 21 October 2021, Russian President Vladimir Putin stated that the pipeline would start gas delivery the day after Germany approved it. Regulatory clearance for Nord Stream 2 would double Russia's gas exports to the Baltic and Germany to per year. Economic pressures for its approval in Germany were mounting, as tight supplies and soaring prices increased costs in transportation and heating fuel markets. Approvals for gas delivery through the fully constructed pipeline were further delayed in late November 2021, when Germany required that part of the assets of the Switzerland-registered Nord Stream AG including the pipeline itself to be transferred to a Germany-registered business entity. Concurrently, the
US Department of State imposed more financial sanctions on Russian companies connected to Nord Stream 2. President Joe Biden earlier waived sanctions on German companies involved in the project. The US and the European Union had accused Russian-owned Gazprom of not having delivered sufficient gas through existing pipelines, while Russia claimed that those pipelines were already delivering natural gas at full capacities. According to energy analysts, the delay of gas deliveries through Nord Stream 2 had significantly exacerbated the
2021 energy crisis.
Suspension of certification by Germany In February 2022, Menendez and Senate minority leader
Mitch McConnell had been personally assured during a visit by German Chancellor Scholz that if Russia invaded, Nord Stream 2 would be halted. Royal Dutch Shell, which financed 10% of the project, may have to write off $1 billion if it never opens. On 2 March, Wintershall Dea revealed that it had decided to write off its financing of Nord Stream 2, which it highlighted totals around €1 billion. On 7 March, Uniper announced that it had taken the decision to record a full impairment loss on its loan to Nord Stream 2. The company noted that it will recognize an impairment loss of its loans towards Nord Stream 2 AG in the amount of €987 million.
Dmitry Medvedev, deputy chairman of the
Security Council of Russia wrote on online social media service
Twitter: "welcome to the new world where Europeans will soon have to pay 2,000 euros per thousand cubic metres!" suggesting prices were set to double.
European Commission European Commission President
Ursula von der Leyen said the future of the pipeline would depend on Russia's actions in Ukraine. On 19 February 2022 she told the
Munich Security Conference that Europe could not be overly dependent on Russia for its energy needs. ==Controversies==