US. Senator asks Treasury for sanctions briefing on Deripaska

The top Democrat on the Senate Banking Committee, Sherrod Brown, has asked the U.S. Treasury Department for a briefing about allegations that Russian billionaire Oleg Deripaska continued to influence day-to-day activities of United Co. Rusal International PJSC and whether those activities would violate a 2018 sanctions relief deal.

Brown made the request after Bloomberg News reported that European officials had provided information to the U.S. government indicating that Deripaska continued to exert control this year over Rusal, one of the world’s largest aluminum producers. The officials said Deripaska used company resources and employees to support his personal business interests and the political agenda of the Kremlin around the world.

“Senator Brown is very concerned about the allegations,” a spokeswoman for Brown said in an emailed statement. “We have asked to be briefed by the Treasury Department on the allegations, whether any of these activities violate the 2018 sanctions delisting agreement, and if so what penalties might be applied.”

A Treasury spokesman declined to comment.

The U.S. sanctioned Deripaska and six other Russian oligarchs in April 2018 for their roles in supporting what Treasury Secretary Steven Mnuchin called the Kremlin’s “malign activity around the globe,” including the occupation of Crimea, support for the Syrian regime of Bashar al-Assad and attempts to subvert Western democracies.

Markets Roiled

In addition to individual measures, the U.S. sanctioned several of Deripaska’s companies, including Rusal and its parent company EN+ Group International PJSC. The move roiled metals markets, prompting Treasury officials to rethink the blacklisting. Sanctions on three companies were lifted under a deal reached in late 2018 that called for the companies to ensure that the oligarch would reduce his ownership and relinquish control. Mnuchin said the companies would be subject to ongoing monitoring and would face severe consequences if they failed to comply with the deal. Personal sanctions on Deripaska remained in place.

Lawyers for Deripaska as well as EN+ said in response to questions earlier this month that the allegations by the European officials aren’t true. The law firm Schillings, which represents EN+ and its executive chairman Greg Barker, said in a statement that it’s false to suggest that Deripaska controls EN+, influences its day-to-day operations or allows its resources or employees to support his personal business interests. Deripaska’s U.K. lawyer, Paul Tweed, said the Russian had at all times complied with his commitments while Deripaska’s U.S. lawyer, Tom Clare, added that his client “made monumental efforts to divest from the companies pursuant to the U.S. government’s directive—which he accomplished to the U.S. government’s total satisfaction.”

In statements following Bloomberg’s report, Rusal and EN+ both denied that they had violated the U.S. agreement.

Brown was one of three Senators, including minority leader Chuck Schumer and New Jersey Democrat Robert Menendez, who expressed unease about that deal in a December 2018 statement. “The decision raises key questions that the Administration will need to answer about whether the structural and governance changes made by these companies are sufficient to ensure that Deripaska is no longer in the driver’s seat,” they wrote.

Brown isn’t the only senator to voice disquiet over the new European allegations. Marco Rubio, a Republican from Florida who opposed Treasury’s sanctions-relief deal, tweeted Bloomberg’s story on December 21, commenting: “I told you so.”