WASHINGTON _ The Trump administration is ready to remove sanctions on Russian billionaire Oleg Deripaska's aluminum company, United Co. Rusal, after he agreed to significantly reduce his ownership stake.
Deripaska will remain under sanction and his property will remain blocked, but Treasury intends to remove financial restrictions on Rusal, En+ Group Plc and JSC EuroSibEnergo. The move will take effect in 30 days unless Congress blocks the action, the Treasury Department said in a statement Wednesday.
"These companies have committed to significantly diminish Deripaska's ownership and sever his control," Treasury Secretary Steven Mnuchin said in the statement. "The companies will be subject to ongoing compliance and will face severe consequences if they fail to comply."
Mnuchin added that Treasury "maintains the ability under the terms of the agreement to have unprecedented levels of transparency into operations."
The Treasury secretary highlighted that Deripaska, not the companies, was the intended target of U.S. sanctions imposed in April.
Rusal is among the largest companies the U.S. has ever put on its sanctions designation list. The value of the aluminum producer has declined by more than half from $9.2 billion more than seven months ago. The sanctions were intended to punish its majority owner, Deripaska, for his close ties to Putin. In April, Mnuchin sanctioned Deripaska, along with dozens of other Russian businessmen, companies and government officials, over Russia's interference in the 2016 presidential campaign.
Deripaska's agreement with Treasury includes cutting his direct and indirect share ownership, overhauling the boards of En+ and Rusal, and "committing to full transparency with Treasury by undertaking extensive, ongoing auditing, certification, and reporting requirements," the department said in a statement.
Aluminum markets spun into chaos after the sanctions against the companies were announced, with global prices shooting up as much as 20 percent in the first week. Sanctioning of the world's largest aluminum supplier outside of China threatened a worldwide shortage of the metal, forcing Mnuchin to backtrack. Since April, he has closely monitored the issuance of extensions to the sanctions on Rusal as Treasury negotiated a deal with Deripaska to save the company from the full range of financial restrictions.
Congress has 30 days in which to call a vote to block Treasury's ability to lift the sanctions, according to the Countering America's Adversaries Through Sanctions Act passed by lawmakers in August 2017.
