Washington extends until October 23 to complete deals with Russian company

Washington may remove sanctions from UC Rusal if billionaire Oleg Deripaska #50 gives up control of the company. This is stated in a clarification to the sanctions imposed by the Office of Foreign Assets Control of the U.S. Department of the Treasury (OFAC) in connection with the crisis in relations between Russia and Ukraine. The clarification was published on Monday, April 23, on the website of the U.S. Treasury Department.

It follows that under OFAC rules, parties can be removed from the sanctions list if they demonstrate a change in the circumstances that led to their inclusion on the list. “In the case of Rusal … the US may relax the sanctions regime if Oleg Deripaska sells some assets and loses control over the company,” the document stresses.

At the same time, on April 23, the head of OFAC John Smith signed the General License №14, which extended the authorization for transactions related to the winding down of business transactions with Rusal until October 23, 2018. Previously, the deadline to complete or cancel transactions, for contracts entered into prior to April 6, 2018, was June 5. “All funds in the accounts of sanctioned individuals will remain blocked at 12:01 a.m. North American Eastern Time (8:01 p.m. Moscow time) on April 23, 2018,” the document, posted on the U.S. Treasury Department website, reads.

Foreign persons who have similar contracts with Rusal will not be subject to secondary sanctions for these transactions. Head of the U.S. Treasury Steve Mnuchin explained that Rusal has already felt the impact of U.S. sanctions because of its connection with Oleg Deripaska. But “the U.S. authorities have not sought to harm hardworking people who depend on Rusal or its subsidiaries,” Mnuchin said in a press release.

He also said that Rusal had already applied to OFAC to remove the company from the sanctions list. At the time of its consideration and issued a general license number 14 – the decision will be made by the end of October 2018, Mnuchin noted. Rusal’s shares rose 15% to 26.39 rubles per share in trading on the Moscow Stock Exchange amid a statement from the U.S. Treasury Department about the possible removal of sanctions from the company.

The U.S. Treasury Department published on Friday, April 6, a list of Russian businessmen, senior officials and companies on which restrictive measures are imposed under the Countering America’s Adversaries Through Sanctions Act (CAATSA).

The sanctions were imposed on seven Russian oligarchs, 12 companies they own or control, and 17 high-ranking Russian officials. The sanctions list also includes defense companies working for export and one bank.