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Trio of Russian Companies Overcome Treasury Sanctions

Sidestepping opposition from Congress, U.S. Treasury officials lifted sanctions Sunday against aluminum giant United Company Rusal and two other businesses tied to Russian oligarch Oleg Deripaska.

/ January 28, 2019

WASHINGTON (CN) — Sidestepping opposition from Congress, U.S. Treasury officials lifted sanctions Sunday against aluminum giant United Company Rusal and two other businesses tied to Russian oligarch Oleg Deripaska.

Russian metals magnate Oleg Deripaska attends Independence Day celebrations at Spaso House, the residence of the American Ambassador, in Moscow, Russia, on July 2, 2015. The Senate has narrowly upheld a Treasury Department decision to lift sanctions from three companies connected to Russian oligarch Oleg Deripaska. (AP Photo/Alexander Zemlianichenko, File)

Ranked the second largest aluminum company in the world, Rusal has been blacklisted since April 2018 as part of an array of measures by the U.S. Treasury Department targeting Russian oligarchs aligned with the Kremlin.

On Sunday, the Treasury Department removed sanctions against Rusal and EuroSibEnergo, which is Russia’s largest private power company, as well as EN+ Group, a vertically integrated aluminum and power producer that owns more than than 50 percent of Rusal.

Deripaska himself remains on the List of Specially Designated Nationals and Blocked Persons at the Office of Foreign Assets Control, but Treasury officials found the companies should no longer face sanctions because they reduced Deripaska’s company shares.

The company EN+ Group welcomed the news Monday with the addition of seven independent directors. Similarly, Rusal issued a release announcing that Chairman Jean-Pierre Thomas had resigned as a director in line with the OFAC’s “imperative” requests for ending the sanctions. 

Sunday’s statement from the Treasury Department says the steps that EN+ and Rusal have taken ensures that “the majority of directors on the ... boards will be independent directors – including U.S. and European persons – who have no business, professional, or family ties to Deripaska or any other SDN, and that independent U.S. persons vote a significant bloc of the shares of EN+.”

“The companies have also agreed to unprecedented transparency for Treasury into their operations by undertaking extensive, ongoing auditing, certification, and reporting requirements,” the statement continues.

Though the move is expected to boost the global aluminum markets, Congress attempted twice this month to keep the sanctions in place. 

Representing a major break in President Donald Trump’s solid GOP backing, a failed measure in the House to keep the sanctions saw 136 Republicans joining Democrats, while 11 Republicans supported a similar move in the Senate.

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