Washington, Jan 28: The US Treasury Department has formally lifted sanctions on three Russian companies, including Rusal the world’s second-largest aluminium producer, which were tied to an ally of Russian President Vladimir Putin, despite sharp objections in Congress.
On December 19, the Treasury Department notified Congress of its intent to lift the sanctions saying the companies were sanctioned because of their ownership and control by oligarch Oleg Deripaska, not for the conduct of the companies themselves, CNN reported.
In a statement on Sunday, the Department said that Rusal and EN+ Group, the holding company of the Russian aluminium giant, as well as energy firm JSC EuroSibEnergo had made significant restructuring and corporate governance changes to diminish Deripaska’s ownership and sever his control to allow them to meet the criteria to be delisted within the 30 days.
“EN+, Rusal and ESE have reduced Oleg Deripaska’s direct and indirect shareholding stake in those companies and severed his control,” the statement said.
“This action ensures that the majority of directors on the EN+ and Rusal boards will be independent directors — including US and European persons who have no business, professional or family ties to Deripaska… And that independent US persons vote a significant bloc of the shares of EN+.”
Sanctions on Deripaska however, remain intact. He was added to the blacklist last April as part of a broader package targeting alleged Russian meddling in US elections, cyberattacks and other provocations.
“The companies have also agreed to unprecedented transparency for Treasury into their operations by undertaking extensive, ongoing auditing, certification and reporting requirements.
“All sanctions on Deripaska continue in force,” the statement added.
But congressional Democrats and some Republicans loudly objected to the Treasury’s decision, reports The Washington Post.
They said it doesn’t go far enough to sever Deripaska’s control because the businessman’s stake in En+ Group, together with that of his former wife, former father-in-law and a foundation Deripaska launched years ago will still amount to over 50 per cent of the shares.
Earlier this month, congressional Democrats narrowly failed to pass a measure that would have stopped Treasury from lifting the sanctions, despite attracting the support of 136 Republicans in a significant rebuke to President Donald Trump’s administration.
“The Trump Administration is working seven days a week with favouritism for Russia,” Democrat Representative Lloyd Doggett said on Sunday, referring to the agreement as a “sordid deal”.
“This represents just one more step in undermining the sanctions law, which President Trump has obstructed at every opportunity, while Russian aggression remains unabated.”
The sanctions on the companies were never fully implemented, as the US repeatedly issued licenses allowing certain business activity while the two sides tried to work out a deal.
The final licenses were set to expire on Monday.