Accessibility links

Breaking News

U.S. Gives Russian Aluminum Tycoon More Time To Comply With Sanctions

Russian tycoon Oleg Deripaska
Russian tycoon Oleg Deripaska

The United States has once again postponed the enforcement of sanctions against Russian aluminum giant Rusal and two other companies to allow their top shareholder time to carry out a plan to pare down his holdings.

The U.S. Treasury Department late on November 9 said it was giving Russian tycoon Oleg Deripaska an additional four weeks, until January 7, to reduce his holdings in EN+, RUSAL, and GAZ, extending its previous deadline of December 12.

“EN+, RUSAL, and GAZ are proposing substantial corporate governance changes that could potentially result in significant changes in control of these sanctioned entities," the Treasury Department said in a statement.

Rusal, En+, and GAZ declined to comment. Deripaska has hired influential lobbyists in Washington to negotiate with the Treasury over the sanctions in hopes of having them eventually lifted.

The Treasury Department originally imposed the sanctions in April on Deripaska and several companies in which he is a large shareholder, citing "malign activities" by Russia, as well as allegations of past crimes by Deripaska himself.

The sanctions announcement roiled the global stock and aluminum markets, causing a run on Rusal's shares and an exodus of customers that led to fears the world's second-largest aluminum producer might be forced out of business.

With the markets in turmoil and Rusal's future in doubt, Treasury Secretary Steve Mnuchin shortly after announcing the sanctions said Washington's intent was not to destroy the company and the thousands of jobs it provides in Russia and elsewhere around the world.

He has since then postponed the sanctions several times as the Treasury Department considers plans by Deripaska to divest shares in the companies so that he no longer controls them, among other moves.

Rusal and its parent company En+ in the meantime have recruited directors and management not linked to Deripaska in moves apparently stemming from the companies' talks with the Treasury over easing the sanctions.

Rusal named Yevgeny Nikitin, who has been acting chief executive since May and previously headed its aluminum division, as its chief executive on November 2. En+ also appointed a new CEO.

The latest move by the Treasury Department extends licenses enabling the sanctioned firms to authorize activities needed to wind down operations or contracts, according to the department's website. It also extends licenses to authorize transactions needed to divest debt, equity, and other holdings.

Rusal is the world’s second-biggest aluminum producer after China’s Hongqiao.

Japan’s top aluminum rolling company, UACJ Corp, said on November 1 that it was removing Rusal from its 2019 suppliers list due to uncertainty over the sanctions.

With reporting by Reuters and TASS
  • 16x9 Image


    RFE/RL journalists report the news in 27 languages in 23 countries where a free press is banned by the government or not fully established. We provide what many people cannot get locally: uncensored news, responsible discussion, and open debate.