KYIV, May 18 - The Biden administration will waive sanctions on the corporate entity and CEO overseeing the construction of Russia’s Nord Stream 2 pipeline into Germany, according to two sources briefed on the decision, Axios reported on Tuesday.

The decision indicates the Biden administration is not willing to compromise its relationship with Germany over this pipeline, and it underscores the difficulties President Biden faces in matching actions to rhetoric on a tougher approach to Russia.

The State Department will imminently send its mandatory 90-day report to Congress listing entities involved in Nord Stream 2 that deserve sanctions. Sources familiar with the drafting of the report tell Axios the State Department plans to call for sanctions against a handful of Russian ships.

The State Department will also acknowledge that the corporate entity in charge of the project (Nord Stream 2 AG) and its CEO (Putin crony and former East German intelligence officer Matthias Warnig) are engaged in sanctionable activities.

However, the State Department will waive the applications of those sanctions, citing U.S. national interests.

This planned move seems at odds with Secretary of State Antony Blinken's statement, made during his confirmation hearing: "I am determined to do whatever we can to prevent that completion" of Nord Stream 2.

This planned move also sets up a bizarre situation in which the Biden administration will be sanctioning ships involved in the building of Nord Stream 2 but refusing to sanction the actual company in charge of the project.

“Many people have been speculating and worrying since at least January 20201 that Biden’s rhetoric & actions vis a vis NordStream2 were not going to line up,” Ariana Gic, a Toronto-based analyst focused on Ukraine, tweeted Tuesday. “We see the concerns have been valid. A troubling development to say the least.”

Sources close to the situation say that top Biden officials have determined that the only way to potentially stop the project — which is 95% complete — is to sanction the German end users of the gas.

And the Biden administration is not willing to rupture its relationship with Germany over Nord Stream 2.

John Schindler, a former U.S. National Security Agency official, has sharply criticized the Biden administration for letting Nord Stream 2 go ahead.

“An appalling surrender to the Kremlin because we must not upset Berlin, whose political class has been bought by Moscow,” Schindler said in a tweet. “Nord Stream 2 is, at its core, a Stasi/KGB legacy project designed to help Russia divide NATO and the EU while enriching the worst Germans and Russians, and funding Putin's aggression against Ukraine and beyond.”

The completion of Nord Stream 2 would be a huge geopolitical win for Putin and give him substantial new leverage in Europe.

Russian gas currently has to pass through Ukraine on its way to Europe. Bypassing Ukraine with a direct pipeline to Germany is an opportunity for Russia to advance its goal of isolating its former client state, now a fledgling democracy, from Western Europe.

Russia has a long track record of cutting critical supplies to its neighbors during disputes, including cutting off gas to Ukraine.

The pipeline could be finished by the summer without a major intervention to stop it. (ax/ez)