The U.S. Treasury’s Office of Foreign Assets Control (OFAC) announced its intention to end sanctions on UC Rusal and its parent company En+. The sanctions were imposed in April 2018 targeted Russian businessman Oleg Deripaska and his business empire, which includes Rusal, En+, and other companies in which he owned stakes.
The OFAC cited “malign activities” by Deripaska. “The Treasury sanctioned these companies because of their ownership and control by sanctioned Russian oligarch Oleg Deripaska, not for the conduct of the companies themselves,” said Steven T. Mnuchin, U.S. Treasury secretary.
The sanctions set off waves of disruption in the global aluminum markets, causing disruptions in aluminum billet supply and other aluminum supply challenges. Washington postponed enforcement of the sanctions after lobbying by European governments, and began negotiations to remove Rusal and En+ from the sanctions if Deripaska ceded control and the companies were restructured to reduce his stakes.
“These companies have committed to significantly diminish Deripaska’s ownership and sever his control,” the Treasury said. The sanctions will be lifted in one month (late January 2019) if the agreements are followed that cut ties with Deripaska. Some of the terms of the deal make it so Deripaska is unable to receive cash or dividends from any of the firms, and that he is required to hand over shares of En+ to charity, amongst other stipulations.
In an official statement, Rusal said, “There is no assurance that termination of sanctions imposed on the company will materialize or eventually be consummated as contemplated or at all.” However the aluminum giant lauded the decision and “will continue to do everything that is necessary to return the company to the regular working conditions.”
Congress has 30 days from the announcement at its disposal to confirm or reject the OFAC delisting request.