December 19, 2018

Schumer, Brown, Menendez Statement On Treasury Decision to Delist Russian Firms From Sanctions

WASHINGTON, D.C. — Senate Minority Leader Charles Schumer (D-NY), Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs and Sen. Robert Menendez (D-NJ) – ranking member of the U.S. Senate Committee on Foreign Relations – released the following statement on the Treasury Department’s intent to remove three large Russian companies, EN+ Group Plc, JSC EuroSibEnergo (“ESE”), and United Co. Rusal Plc (Rusal) from U.S. sanctions lists. These companies were originally sanctioned because of their relationship to notorious sanctioned Russian oligarch Oleg Deripaska. As Treasury noted when it sanctioned him: “Deripaska has been investigated for money laundering, and accused of threatening the lives of business rivals, illegally wiretapping a government official, and taking part in extortion and racketeering. There are also allegations that Deripaska bribed a government official, ordered the murder of a businessman, and had links to a Russian organized crime group.” 


“The Treasury Department proposes to remove these firms, including the huge aluminum producer Rusal, from the sanctions list in the belief that it has negotiated an agreement that will separate the companies from Russian oligarch Oleg Deripaska,” said the Senators. “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. And it remains to be seen whether this approach can succeed in Putin’s Russia. The next Congress will need to review this decision as soon as possible to determine whether congressional action is required.”




Treasury’s action raises key questions about whether limits targeting Deripaska’s control and influence, the handling of proceeds from his divestment, and steps being taken to prevent him from unduly benefitting from this action are sufficient. These and other questions must be answered during the formal 30-day Congressional Review process, provided for under the Countering America’s Adversaries Through Sanctions Act enacted in 2017, before Treasury moves forward.  


En+ Group plc is a large vertically-integrated firm that engages in aluminum production, energy generation and distribution, and other businesses worldwide. United Company RUSAL Plc produces and sells aluminum and related products.  JSC EuroSibEnergo (“ESE”) is a Russian electricity generation company, and is wholly owned by EN+ Group Plc. EN+ Group Plc was sanctioned for being owned or controlled, directly or indirectly, by Oleg Deripaska.  Rusal and ESE were in turn sanctioned for being owned or controlled by EN+ Group Plc, and its relationship to Deripaska.