(Bloomberg) -- The Biden administration will impose but immediately waive sanctions on the Switzerland-based company overseeing the construction of the Nord Stream 2 gas pipeline from Russia to Germany, according to several people familiar with the decision.

In a report to Congress on Wednesday, the State Department said Nord Stream 2 AG is engaged in sanctionable activity under U.S. law but the Biden administration decided to waive the sanctions for national security reasons, according to the people, who spoke on condition of anonymity.

Separately, German Foreign Minister Heiko Maas said Secretary of State Antony Blinken told him that the report lists sanctions against a number of entities, but also “presidential waivers” for Nord Stream 2 AG and its chief executive, Matthias Warnig, the Associated Press reported, citing comments from the foreign minister.

The Biden administration is looking to pressure Germany into halting the nearly-complete pipeline, holding out the possibility that it could revoke the waiver and impose the sanctions. But the latest moves won’t satisfy members of both parties in Congress who want to see the pipeline halted, arguing it makes European nations more dependent on Russia and rewards President Vladimir Putin at the expense of national security concerns.

“If these reports are accurate, the administration’s decision to waive sanctions sends an unfortunate signal that the United States is not prepared to do what Congress has mandated they do: use crushing sanctions to stop the pipeline,” Republican Senators Ron Johnson, John Barrasso and Ted Cruz said in a statement. “This type of weakness only encourages Putin’s aggression; he’s not paying a significant price for his malign activities and with decisions like these, the Biden Administration is only encouraging him.”

Why World Frets Over Russian Nord Stream 2 Pipeline: QuickTake

The administration’s plans were reported earlier by Axios.

Reports that the sanctions were being waived were greeted with relief in Russia, where shares of Gazprom PJSC rose as much as 2.8% before paring gains amid a broadly weaker Russian market. Analysts at BCS Global Markets said a softer U.S. stance on Nord Stream 2 is positive for the stock.

The Nord Stream 2 pipeline became a major source of friction between the U.S. and its European allies, particularly Germany, during former President Donald Trump’s administration. President Joe Biden has essentially taken the same position as Trump: that the project undermines European security by tying the continent more closely to Moscow.

But Biden also is also wary of punishing allies like Germany over the issue, part of a broader attempt to overhaul how the U.S. conducts diplomacy and heal some of the rifts with other nations created by Trump’s “America First” approach to foreign policy.

Congressional Pressure

The administration has come under pressure from lawmakers of both parties to block Gazprom PJSC’s project after a congressionally-mandated report released in February named only one vessel -- the Russian-flagged Fortuna -- as subject to sanctions.

Advocates for taking action in Congress argue that U.S. law requires sanctions against any foreign entity if it assisted in construction of the pipeline. They also say that while the U.S. may be seeking to ease strains with Germany, it risks alienating other allies such as Ukraine, Poland and the Baltic states.

The 1,230-kilometer (764-mile) pipeline will help Germany secure a relatively low-cost supply of gas amid falling European production. It’s also part of Gazprom’s decades-long effort to diversify its export options to Europe as the region moves away from nuclear and coal.

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