The Trump administration is lifting sanctions against the business empire of Oleg Deripaska, one of Russia’s most influential oligarchs with links to organized crime, after an aggressive lobbying campaign by Deripaska’s companies.
The decision by the Treasury Department drew criticism from some foreign policy analysts that the administration was sending the wrong signal to Moscow about its conduct toward its neighbors and the United States.
The companies are among the biggest in the aluminum industry, and questions about their fate had roiled global metals markets.
Deripaska’s stature in Russia made any decision seen to be in his favor tricky for the administration at a time when President Trump is under investigation by the special counsel in connection with Russian interference in the 2016 election.
Deripaska is one of Russia’s wealthiest men.
He amassed his fortune under Vladimir Putin and has bought assets abroad in ways widely perceived to benefit the Kremlin’s interests.
US diplomatic cables from 2006 described him as “among the two or three oligarchs Putin turns to on a regular basis” and “a more-or-less permanent fixture on Putin’s trips abroad”.
Deripaska and his businesses — including the world’s second-largest aluminum company, Rusal — were hit with sanctions in April in retaliation for Russian interference in the election and other hostile acts by Moscow.
The companies responded with a sophisticated multimillion-dollar lobbying and legal campaign seeking to delay and ultimately remove the sanctions in exchange for promises from Deripaska to give up majority ownership and control of EN+, the holding company that controls Rusal.
The lobbying effort had cast the sanctions as having unintended ripple effects on companies in the United States, Ireland, Sweden, Jamaica, Guinea and elsewhere, with potential job losses and other negative economic impacts.
Andrea Gacki, the director of the Treasury’s Office of Foreign Assets Control, cited those economic effects in a letter notifying congressional leaders of the administration’s intent to lift the sanctions against EN+, Rusal and a third Deripaska company, JSC EuroSibEnergo.
Gacki said Deripaska himself would remain on the sanctions list.
As long as that was the case, she said, Deripaska would be unable to gain access to the proceeds from selling off his shares to reduce his stake.
Critics were quick to challenge that logic.
“How does Deripaska reducing his ownership stake in his company, Rusal, advance US national security interests? I don’t understand the logic at all,” Michael McFaul, a former US ambassador to Russia, wrote on Twitter.
Unless Congress tries to block the move by passing a joint resolution of disapproval within 30 days — an unlikely outcome given the impending end of the congressional session and the swearing-in of a new Congress next month — the sanctions will automatically be lifted.
Representative Lloyd Doggett, a Texas Democrat who has criticized the administration for being soft on Rusal, said the move to lift sanctions amounted to Trump “sliding another big gift under Vladimir Putin’s Christmas tree,” referring to the Russian president.
Saying that the plan “appears to be a shell game brokered by a sanctioned Russian bank, VTB Bank, involving one of Putin’s closest buddies, Oleg Deripaska,” Doggett said it “only encourages Putin to pursue his destabilizing activities around the world.”
He called for a rigorous congressional review of the deal, and said that if it “is what it appears — a Rusal ruse — then we should reject this latest Trump scam.”
The decision was disclosed on the same day that the Treasury Department announced new sanctions against a former Russian military intelligence officer who it said works for Deripaska, as well as several Russian intelligence officers and entities linked to Russian meddling in the 2016 presidential election.
Regardless of the concessions from Deripaska and the new sanctions, David Merkel, who worked on Russia-related issues in President George W. Bush’s White House and State Department, said lifting sanctions against Deripaska’s companies “sends the wrong signal.”