The U.S. administration lifted sanction on Sunday on Rusal and other firms which were linked to Oleg Deripaska. This move defied the push by the Democratic-led U.S. Congress to keep the restrictions.
Earlier in January, eleven Republicans joined the Democrats in the U.S. Senate in a failed effort to ensure the sanctions on Rusal, En+ group Plc and JSC EuroSibEnergo were not lifted. However, the attempt failed as Trump, and the remaining Republicans prevailed.
Advocates supporting the sanctions argued that Deripaska who is an ally of the Russian President, Vladimir Putin had too much control over companies like Rusal, En+ group Plc and JSC EuroSibEnergo. The sanctions were imposed last year in April to punish Russia for several actions including the annexations of Ukraine’s Crimea as well as its efforts to meddle with the U.S. elections and showing support for the Syrian government during the civil war.
A few lawmakers on both sides also stated that it would be deemed inappropriate to ease the sanctions with ongoing investigations by Special Counsel Robert Mueller about Trump’s presidential campaign in 2016.
The U.S Treasury Department released a statement on Tuesday, stating that the three companies had made changes so that Deripaska had a less direct and indirect shareholding state as well as severed his control over the companies.
According to the statement, this action ensured the directors on the company boards, would consist of Americans and Europeans who had no family, professional or business ties with Deripaska as well as anyone else designated for sanctions by the U.S. Treasury Department.
The statement also included that they will be moving forward with unprecedented transparency into every aspect of their operations by following extensive auditing, reporting requirements as well as required certifications.
Deripaska remains subject to the U.S. sanctions, no changes have been made to that.
Once the Treasury released its statement, Rusal announced that Jean-Pierre Thomas, the chairman, and director of Rusal had resigned as a part of the deal in lifting the U.S. sanctions. This resulted in a 5 percent jump in the shares listed as Rusal in Hong Kong on early Monday.
Republicans who were opposed to keeping the sanction in place commented that they were worried about the effect it would have on the global aluminum industry. They also stated that the lowering of Deripaska’s stakes in the companies is an example of how the sanctions worked.
Outside of China, Rusal is the biggest aluminum producer in the world. The U.S. sanction had spurred the demand for Chinese metal and caused the aluminum exports for China to jump to a record high in 2018.