Another big Russian company with ties to President Vladimir Putin may be about to escape American sanctions.
The Trump administration sent the price of aluminum soaring when it put tariffs on aluminum and sanctions on United Company Rusal, the Russian company that is the second largest aluminum producer in the world, supplying about 7 percent of the global supply with operations all over the world.
Treasury Secretary Steven Mnuchin says he will consider easing the sanctions if Oleg Deripaska, the Russian oligarch who has is close to Putin, sells his controlling interest in the big Russian metals company.
Just suggesting the sanctions on Rusal might be eased caused the price of aluminum on world markets to plunge by 9.4 percent, the biggest one-time drop ever.
The Treasury Department Monday eased sanctions on Russian aluminum producer Rusal and said it would consider lifting them altogether if the company severs ties with Oleg Deripaska, a Russian oligarch with close ties to President Vladimir Putin https://t.co/ELIti6gCQ2 pic.twitter.com/SphqkjofPO
— POLITICO (@politico) April 23, 2018
American companies had been ordered to stop buying aluminum from Rusal but after the Russian company petitioned to be removed from the sanctions list, the U.S. Treasury gave it an extension while it considers the appeal, according to a statement by Mnuchin.
This is the first time the U.S. has given Rusal a path to having sanctions lifted – but it comes with a very big condition.
The U.S. will only grant relief it Oleg Deripaska gives up control, which means selling his controlling 48 percent stake in Rusal.
“Rusal has felt the impact of U.S. sanctions,” said Mnuchin in his statement, “because of its entanglement with Deripaska, but the U.S. government is not targeting the hardworking people who depend on Rusal and its subsidiaries.”
Deripaska, who is one of Russia’s richest men with a fortune now put at over $6 billion, has long been part of Putin’s inner circle of oligarchs he regularly consults.
Reuters: Workers at one of Russia's biggest aluminum smelters say their Siberian town is doomed unless Moscow mitigates U.S. sanctions against aluminum giant Rusal, a predicament mirrored across the company's sprawling operations. https://t.co/ktKR32IQ85
— Evan Rosenfeld (@Evan_Rosenfeld) April 23, 2018
Deripaska had business ties to former Trump campaign manager Paul Manafort, who offered the Russian private briefings on the 2016 election shortly before Trump won the Republican nomination to run for president.
Deripaska is now considered a person of interest in Special Counsel Robert Mueller’s investigation into Russian efforts to influence the American presidential election.
Deripaska was among the Russian oligarchs targeted for financial sanctions by the U.S. on April 6, which include prohibiting any U.S. person or business from transactions with Rusal and his holding company EN+ Group.
Deripaska is married to Polina Yumasheva, the step-daughter of former Russian President Boris Yeltsin and the daughter of Valentin Yumashev, making him the son-in-law.
He also heads Russia’s largest charitable foundation, Volnoe Delo, which reportedly has donated more than $250 million to mostly educational causes.
Deripaska had come to the attention of U.S. officials even before the Mueller probe and has been denied a travel visa to the U.S. several times, most recently in 2016.
Last year Deripaska offered to cooperate with U.S. Congressional investigators concerning the Russia election probe but he demanded full immunity from prosecution in return, which the lawmakers declined to grant.
Russian reporter who died after falling from his fifth-floor balcony had been investigating allegations about Deripaska and Manafort made by Belarusian escort Nastya Rybka (and exposed by @navalny) https://t.co/M3zWQdwYqu
— Natasha Bertrand (@NatashaBertrand) April 17, 2018
The Treasury Department, in announcing the sanctions earlier this month, said Deripaska has been investigated for money laundering, illegally wiretapping a government official, threatening the lives of business rivals and taking part in extortion and racketeering.
“It should calm things down,” Daniel Briesemann, an analyst at Commerzbank AG, told Bloomberg News. “It looks as if there was a lot of pressure from the U.S. aluminum downstream industry.”
“Mnuchin’s statement about the de-listing signals that this is more than just getting an extra few months to stop business with Rusal,” Brian O’Toole, a senior fellow at the Atlantic Council who previously worked in Treasury’s sanctions unit, told Bloomberg. “It shows that Rusal is trying get off the list.”
Deripaska who started his career as a metals broker specializing in aluminum, has not commented yet on Mnuchin’s “path,” but it would be surprising if he did not find a way to accommodate the offer, save the company and calm down the crazed aluminum market.
Once again the business-oriented, money comes first Trump administration is working to find a way to normalize the aluminum industry at the request not just of Rusal, but also of American aluminum producers and the many industries from auto to toasters that depend on the metal and want a stable price.
Once again the Trump administration after talking tough about the Russians is putting the brakes on meaningful sanctions, which with or without Deripaska would be good news for Putin.
Fun fact: Ivana Trump, Oleg Deripaska, and Len Blavatnik are all next door neighbors on the same small street in NYC. https://t.co/CayYyxgIMl
— Scott Stedman (@ScottMStedman) April 23, 2018