U.S. starts lifting anti-Russian sanctions

U.S. starts lifting anti-Russian sanctions

The U.S. Department of the Treasury is set to remove Russian companies Rusal, En+ and Eurosibenergo (ESE) from its sanctions blacklist, U.S. Treasury Secretary Steven Mnuchin said in a statement.

"En+, Rusal, and ESE were designated for sanctions solely because they were majority-owned or controlled by (Oleg) Deripaska. These entities are undergoing significant restructuring and governance changes that sever Deripaska’s control and significantly diminish his ownership," Mnuchin said.

He noted that these three companies have committed to provide Treasury with an unprecedented level of transparency into their dealings to ensure that Deripaska does not reassert control. "As a result, these entities will no longer be designated for sanctions," the US official added.

At the same time, Mnuchin stressed that Treasury will be vigilant in ensuring that En+ and Rusal meet these commitments. "If these companies fail to comply with the terms, they will face very real and swift consequences, including the reimposition of sanctions," TASS cited him as saying.

U.S. Treasury Secretary also expressed readiness to discuss the Russia sanctions program with the new Congress.

On December 19, 2018, it became known that the U.S. Treasury was ready to remove sanctions against En+, Rusal, and EuroSibEnergo within 30 days since Deripaska had agreed to reduce his control in En+ from roughly 70% to 44.95%.

The senior research fellow at the European Research Centre of the International Relations Institute of the Russian Academy of Sciences, Vladimir Olenchenko, speaking to Vestnik Kavkaza, noted that the Rusal situation may set an example for other Russian companies placed under sanctions. “American sanctions are introduced quite easily, but lifting them is difficult. I suggest that Rusal has studied the conditions for lifting the sanctions and fulfilled all the requirements. At the same time, of course, the question is how the company has changed during the sanction period. In general it can be considered as a precedent for the fact that sanctions can be lifted, and other companies will be interested to study the experience of Rusal," he said.

The situation is complicated by the fact that in political terms, the company has to fulfill the requirements of a foreign government. "Of course, En +, Rusal and Eurosibenergo made sufficient concessions to the Americans. Now the whole precedent needs to be carefully examined. That is, the current situation requires caution - one should not immediately apply this experience to all subscription companies. The information that goes to the media and to websites of interested companies says that the Rusal company made concessions, but gives no explanation why this decision was made," Vladimir Olenchenko stressed.

The vice-rector of the Academy of Labour and Social Relations Alexander Safonov said that lifting the sanctions was mutually beneficial. "Rusal's influence in terms of aluminium production is great, we shouldn't forget about it. Since Trump has pursued the policy of cheaper resources for the U.S. economy, the anti-Rusal sanctions turned out to be disadvantageous to him, because it would lead to a sharp increase in aluminium prices. Naturally, it would affect the competitiveness of American industry. Therefore, a situation arose in which Rusal managed, through a change in the form of ownership, to achieve the lifting of sanctions and a certain preservation of the status quo in the market," he noted.

This experience can be applied to other sub-authorized companies. "The Americans are consistent in their sanctions policy. Of course, there will be many questions for a number of other large industrial enterprises. They will impose sanctions on every company they could," Alexander Safonov said.