The Trump administration on Sunday formally lifted sanctions on three Russian firms with links to oligarch Oleg Deripaska, including Rusal, the world’s second-largest aluminum producer.
On Dec. 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 Deripaska, not for the conduct of the companies themselves.
The Treasury Department said that Rusal and EN+ Group, the holding company of the Russian aluminum 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 Treasury Department said in a statement. “This action ensures that the majority of directors on the EN+ and Rusal boards will be independent directors – including U.S. and European persons who have no business, professional or family ties to Deripaska…and that independent U.S. persons vote a significant bloc of the shares of EN+.”
Sanctions on Deripaska remain intact.
“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,” Treasury said in its statement.
Democrats and some Republicans had said they believe the Treasury Department had cut a bad deal that doesn’t sufficiently prevent the Russian oligarch from maintaining influence over the company even though his personal ownership stake in Rusal was reduced. Under the arrangement, Deripaska’s ownership in EN+ drops from roughly 70% to roughly 45%, and he can vote only 35% of his shares, according to documents explaining the terms of the deal. But his shares are spread out to various entities, including to a foundation he started two decades ago, his ex-wife and father-in-law as well as the sanctioned Russian bank, VTB. The terms of the agreement say voting rights of these shares will be given to third parties with no ties to Deripaska.
Earlier this month, the Republican-controlled Senate failed to get the 60 votes needed to move a resolution to stop the lifting of the sanctions with 57 voting in favor and 42 opposed. The House passed its own resolution 362-53 – a tally that included a majority of Republicans.
CNN’s Donna Borak and Jeremy Herb contributed to this report.