Treasury will mull easing sanctions on Russian aluminum producer

U.S. officials will consider easing sanctions on Rusal, an aluminum producer controlled by a businessman with ties to Russian President Vladimir Putin, the Treasury Department announced Monday.

The Treasury Department on Monday extended the time frame during which companies could wind down their dealings with the faltering aluminum producer targeted by U.S. sanctions. Treasury Secretary Steven Mnuchin also said the department would consider a petition from Rusal to lift the sanctions, given the economic troubles the actions caused for U.S. allies. 

Companies now have until Oct. 23 to end their business with Rusal, one of the world’s largest aluminum producers, after U.S. sanctions against the firm spurred chaos in metals markets.

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“The U.S. government is not targeting the hardworking people who depend on RUSAL and its subsidiaries,” Mnuchin said Monday. “Given the impact on our partners and allies, we are issuing a general license extending the maintenance and wind-down period while we consider RUSAL’s petition.”  

Rusal is controlled by Oleg Deripaska, one of several oligarchs linked to Putin that the U.S. targeted with financial sanctions on April 6. Treasury also blocked U.S. persons and businesses from transactions with Rusal and EN+ Group, the industrial holding company owned by Deripaska that controls Rusal.

U.S. sanctions against Rusal, which produces roughly 7 percent of the world’s aluminum, sent prices for the metal soaring to their highest levels in several years. Rusal’s customers scrambled to find other suppliers while stockpiles of the metal from its abandoned orders piled up.

Aluminum prices dropped more than 8 percent on Treasury’s announcement.

Even so, Treasury said it would not revoke the sanctions on Rusal until Deripaska was no longer its owner, “absent other adverse information.”

“The path for the United States to provide sanctions relief is through divestment and relinquishment of control of RUSAL by Oleg Deripaska,” Treasury said in a Monday update to the sanctions on the company.

Deripaska is a veteran of Putin’s inner circle and a figure in special counsel Robert Mueller’s investigation of Russia’s efforts to influence the 2016 presidential election.

The oligarch had business ties to former Trump campaign chairman Paul Manafort, who had offered the Russian executive private briefings on the 2016 election just weeks before Trump clinched the Republican nomination, according to The Washington Post.

Mueller indicted Manafort and his business associate, Richard Gates, in October 2017 on charges including conspiracy against the U.S, tax fraud and money laundering. Gates has since pleaded guilty to one count of conspiracy and one count of making a false statement to the FBI, while Manafort is fighting additional charges brought by Mueller in February.

Deripaska offered last year to cooperate with congressional investigators looking into Russia’s efforts to interfere in the 2016 election on the condition of full immunity from prosecution. Lawmakers declined his offer over concerns it would inhibit the federal criminal investigators, according to The New York Times. 

Deripaska has faced scrutiny from U.S. officials for several years before the beginning of the Mueller probe. He has been denied a travel visa to the U.S. multiple times, with the latest instance in 2016, despite pleas on his behalf from Russian Foreign Minister Sergey Lavrov.

Treasury, when announcing the sanctions, said Deripaska had “been investigated for money laundering, and has been accused of threatening the lives of business rivals, illegally wiretapping a government official, and taking part in extortion and racketeering.”