U.S. exporters wait for official announcement from OFAC for guidance on how to proceed.
Despite protests from numerous Senate and House lawmakers, the U.S. Treasury Department’s Friday deadline to lift previously imposed sanctions on three Russian companies with financial ties to oligarch Oleg Deripaska, a political associate of Russian President Vladimir Putin, proceeded.
Last week, both chambers voted, but without success, to stop Treasury from lifting the sanctions.
As of Monday, Treasury’s Office of Foreign Assets Control (OFAC) had not yet published any announcement or guidance related to lifting the sanctions against the Russian companies.
Under the Countering America’s Adversaries Through Sanctions Act (CAATSA), OFAC on April 6, 2018, designated En+ Group for being owned or controlled, directly or indirectly, by Deripaska and other entities he owns or controls. In that same action, OFAC designated UC Rusal for being owned or controlled by, directly or indirectly, En+. JSC EuroSibEnergo, a wholly owned subsidiary of En+, was also designated.
OFAC notified Congress on Dec. 19 that it intended to end trade sanctions against the three companies in 30 days. The agency said the companies had completed “significant restructuring and corporate governance changes” that allowed them to be delisted from the Specially Designated Nationals and Blocked Persons (SDN) List.
Treasury had also warned that lack of resolution to the U.S. sanctions against Rusal, in particular, could throw the international aluminum market into a tailspin.
However, the agency affirmed that Deripaska will remain sanctioned and his property blocked.
In a Jan. 10 statement, Treasury Secretary Steven T. Mnuchin told those Capitol Hill lawmakers who are opposed to lifting the sanctions that failure of the three Russian companies to comply will result in “very real and swift consequences, including the reimposition of sanctions.”
Meanwhile, OFAC on Wednesday continued extending the expiration dates of the pre-existing general licenses deadlines for U.S. companies to wind down their business dealings with En+, Rusal, and ESE from Monday to Jan. 28. When the three companies were placed on the SDN List on April 6, 2018, OFAC initially set the deadline for ending business relationships with the Russian entities by June 5, 2018. About a half dozen additional extensions have since been issued by the agency.
Sanctions ready to lift against three Russian firms
