US extends licences for dealing with companies connected with sanctioned oligarch Deripaska

The US Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’) has once more extended the expiry date of certain general licences allowing dealings with sanctioned Russian companies EN+, RUSAL, and GAZ. New general licenses 13H, 14D, 15C and 16D expire on 21 January 2019 instead of the previous versions’ deadline of 07 January 2018.

RUSAL, GAZ and EN+ were impacted by targeted US sanctions on oligarch Oleg Deripaska in April 2018 in response to the ‘malign activity’ of the Russian state, including suspected meddling in the 2016 US presidential election. Deripaska was until recently president of RUSAL and EN+ and is a significant stakeholder in GAZ.

New General License No 13H authorises transactions with the Russian companies necessary to divest or transfer debt or equity; General License No 14D authorises ‘certain activities’ crucial to the maintenance or winding down of operations or contracts with RUSAL; General License No15C and General License No 16D authorise the same for GAZ and EN+ (also JSC EuroSibEnergo), respectively.

The licences also cover transactions involving holdings where the sanctioned parties have an indirect or direct ownership of 50% or more.

Amid speculation that OFAC may be preparing to remove or waive sanctions against RUSAL, GAZ and EN+, Senator Bob Menendez of the Senate Foreign Affairs Committee has written to Treasury Secretary Steven Mnuchin setting out the criteria that needs to be met before such a decision is made.

Many in business are keen for OFAC to reach a deal with RUSAL to avoid the turbulence in the aluminium markets that followed the announcement of the sanctions in April, while US lawmakers are urging the government to take a tougher stance on Russia.

OFAC’s notice can be found here:
https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/OFAC-Recent-Actions.aspx