OFAC set to drop sanctions against Russian firms

En+ Group, UC Rusal and EuroSibEnergo reportedly have committed to sever Russian oligarch Oleg Deripaska’s controlling interests in their operations.

   The Treasury Department’s Office of Foreign Assets Control (OFAC) on Wednesday notified Congress that it intends to end sanctions imposed on three Russian energy companies in 30 days.
   The sanctions covered Russian energy firms En+ Group, UC Rusal and JSC EuroSibEnergo.  
   OFAC said the companies have completed “significant restructuring and corporate governance changes” that allows them to be delisted from the Specially Designated Nationals and Blocked Persons (SDN) List.
   However, Russian oligarch Oleg Deripaska will remain sanctioned, and his property will remain blocked, the agency said.
   “Treasury sanctioned these companies because of their ownership and control by sanctioned Russian oligarch Oleg Deripaska, not for the conduct of the companies themselves. These companies have committed to significantly diminish Deripaska’s ownership and sever his control,” said Treasury Secretary Steven T. Mnuchin in a statement. 
   Mnuchin warned that three companies will be “subject to ongoing compliance and will face severe consequences if they fail to comply.” 
   On April 6, OFAC designated En+ for being owned or controlled by, directly or indirectly, Oleg Deripaska and other entities he owns or controls. In that same action, OFAC designated Rusal for being owned or controlled by, directly or indirectly, En+. ESE, a wholly owned subsidiary of En+, also was designated.
   Senate leaders, however, remain skeptical that the Russian energy companies have fully diminished Deripaska’s financial and management involvement in their operations. 
   Senate Select Committee on Intelligence Chairman Richard Burr, R-N.C., and Vice Chairman Mark Warner, D-Va., said the financial changes made by the companies “does not change the fact that Mr. Deripaska, his employees, and his companies work at Vladimir Putin’s behest and operate as de facto representatives of the Russian government.”
   The lawmakers said they will “continue monitoring these sanctions’ effects and to hold accountable those who would violate them.”