The Treasury Department is giving Russian companies even more time to adjust to sanctions finally imposed in April in response to – according to a senior administration official – "the Russian government’s ongoing and increasingly brazen pattern of malign activity around the world" and "Russia’s continuing attack to subvert Western democracies."
Oleg Deripaska, who has close ties to both Vladimir Putin and Paul Manafort, turned up on the Treasury's list of sanctioned individuals, as did two companies closely aligned with him – EN+ Group and Rusal.
Treasury already had moved back the deadline for investors to remove their money from Rusal from May 7 to today, June 6, and granted American companies until October 23, instead of yesterday, to stop doing business with Russia's largest aluminum producer.
Facing delisting from the London Stock Exchange this week, Rusal’s owner, EN+ Group, sought the 11th-hour amnesty from the U.S. Treasury late last week by pledging that its majority shareholder and a primary target of the U.S. sanctions, Russian tycoon Oleg Deripaska, would reduce his holdings and relinquish his board seat.
The Treasury granted EN+ Group and several other companies an extension for compliance with the sanctions, buying Rusal’s owner time to implement the company’s proposed divestment plan.
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Rusal’s stock has rebounded in recent weeks and is up 75% from the record low it reached last month in the fallout from the U.S.’s initially proposed sanctions.
Aluminum, which experienced a surge in demand amid related anxiety about supply levels, has fallen 9% from its April high. Prices have whipsawed over the past several weeks as the initial sanctions in early April risked cutting off a major supplier from markets. But prices fell as the Treasury began to signal a way for Rusal to avoid sanctions.
En+ executives and their representatives have scrambled in recent days to convince White House, State Department and Treasury officials that the administration risked missing an opportunity to force Mr. Deripaska out of control if they didn’t grant an extension and the company was delisted from the London Stock Exchange, according to a person familiar with the matter. By sidelining Mr. Deripaska, who is widely believed to be a key ally of President Vladimir Putin, the U.S. hopes to weaken the Kremlin’s power structure.
U.S. Gives Rusal Path to Escape Sanctions (Wall Street Journal)