The Trump administration is ready to remove sanctions on Russian billionaire Oleg Deripaska’s aluminum company, United Co. Rusal, after reaching an agreement to significantly reduce his ownership stake, Bloomberg reports.
Deripaska will remain under U.S. sanctions 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. Shares in the company traded in Hong Kong jumped almost 27 percent at the open in Asia on Thursday, December 20.
“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 on associates of Russian President Vladimir Putin over Moscow’s interference in the 2016 U.S. presidential election.
Senate Democratic Leader Chuck Schumer, joined by Sherrod Brown of Ohio and Robert Menendez of New Jersey, the top-ranking Democrats respectively on the Banking and Foreign Relations committees, said the decision “raises key questions that the administration will need to answer about whether the structural and governance changes made by these companies are sufficient to ensure that Deripaska is no longer in the driver’s seat.”
Senate Intelligence Chairman Richard Burr, a North Carolina Republican, and the panel’s top-ranking Democrat, Mark Warner of Virginia, said in a joint statement that the deal “will require constant monitoring.”
The move coincided with new sanctions on 15 Russian military intelligence operatives over the U.S. election meddling, as well as the attempted assassination of a former double agent in the U.K. One former intelligence officer was accused of working for Deripaska.
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. Its shares surged in Hong Kong to as much as HK$2.84, the highest since sanctions were announced in April.