The U.S. Treasury Department today officially lifted sanctions on businesses tied to the Russian oligarch Oleg Deripaska.
The department said that the Office of Foreign Assets Control lifted sanctions on EN+ Group Plc and EuroSibEnergo JSC, noting that each company has reduced Deripaska’s “direct and indirect shareholding stake in these companies and severed his control.”
“This action ensures that the majority of directors on the En+ and Rusal boards will be independent directors – including U.S. and European persons – who have no business, professional, or family ties to Deripaska or any other SDN, and that independent U.S. persons vote a significant bloc of the shares of En+,” the department said.
When the Trump administration announced last month that it was lifting sanctions against a trio of companies controlled by an influential Russian oligarch, it cast the move as tough on Russia and on the oligarch, arguing that he had to make painful concessions to get the sanctions lifted.
But a binding confidential document signed by both sides suggests that the agreement the administration negotiated with the companies controlled by Deripaska may have been less punitive than advertised.
The deal contains provisions that free him from hundreds of millions of dollars in debt while leaving him and his allies with majority ownership of his most important company.
With the special counsel’s investigation into Russia’s role in the 2016 election continuing to shadow President Trump, the administration’s decision to lift sanctions on Deripaska’s companies has become a political flash point.
House Democrats won widespread Republican support last week for their efforts to block the sanctions relief deal.
Democratic hopes of blocking the administration’s decision have been stifled by the Republican-controlled Senate.
The Treasury Department announced the sanctions last April against Deripaska, six other Russian oligarchs and their companies, including Deripaska’s aluminum giant, Rusal, as well as the holding company that owns it, EN+, and another company it controls, EuroSibEnergo.
Like other oligarchs, Deripaska is closely allied with the Kremlin.
The sanctions were in retaliation for “a range of malign activity around the globe” by Russia, Steven Mnuchin, the Treasury secretary, said at the time
The sanctions relief deal will allow Deripaska to wipe out potentially hundreds of millions of dollars in debt by transferring some of his shares to VTB, a Russian government-owned bank under limited United States sanctions that had lent him large sums of money.
Critics of the deal pointed out that, after Treasury announced it, the share prices of Rusal and EN+ rose sharply, providing a boost to the portfolios of Deripaska, his family and VTB.
“Score that a win for Putin,” tweeted Michael McFaul, a former United States ambassador to Russia, referring to the Rusal share price surge.