“Why would we vote to relax sanctions on three essential Russian companies when Putin has not stopped or even curtailed his malign activities? This is sort of a kiss-up to Putin,” Schumer told reporters shortly before the vote.
Treasury notified Congress on Dec. 19 that it intended to lift the sanctions because Deripaska has agreed to reduce his stake in En+ Group, the holding company that controls Rusal, from about 70 percent to 44.95 percent. This would protect the companies “from the controlling influence of a Kremlin insider,” which had been the goal of punishing the firms, Treasury said.
Deripaska will remain under personal sanctions, along with a half-dozen other oligarchs and more than a dozen government officials the Trump administration targeted in April, for furthering “the Kremlin’s global malign activities, including its attempts to subvert Western democracy, its support for the Assad regime, its malicious cyber activities, its occupation of Crimea, and its instigation of violence in Ukraine,” Treasury said.
“This shouldn’t be a political issue,” Treasury Secretary Steven Mnuchin told reporters after meeting with Republicans shortly before the vote. “We have been tougher on Russia, with more sanctions than any other administration.”
Under the Treasury plan, Russia’s state-owned VTB Bank or another Treasury-approved entity will take ownership of a block of Deripaska’s shares in En+ that had been pledged against a loan.
The Obama administration added VTB Bank to a sanctions list in 2014, as punishment for Russia’s invasion of Ukraine. The Trump administration issued sanctions against VTB’s chairman, Andrey Kostin, last year, as part of the actions against Deripaska and others.
According to Treasury, Glencore, the Swiss mining and trading company, will swap its shares in Rusal for shares in En+, which will dilute the holdings of all shareholders, including Deripaska. Finally, the Russian businessman will donate about 3 percent of his En+ shares to a Russian charity he founded, Volnoe Delo, according to people familiar with the plan.
Schumer said he thought Deripaska would still have too much sway over the company. “When you have 45 percent of a company you basically control it,” he told reporters.
The resolution must pass both houses of Congress and survive a presidential veto to block Treasury action. On Tuesday, House Majority Leader Steny H. Hoyer (D-Md.) introduced a resolution similar to Schumer’s. A number of House Democrats have voiced skepticism about lifting the sanctions.
“Amid one disclosure after another about President Trump’s peculiar relationship with Russian interests, now is hardly the time to lift sanctions on the companies of one of Putin’s closest buddies, Oleg Deripaska,” Rep. Lloyd Doggett (D-Tex.) said Tuesday.
Washington’s sanctions on Rusal and En+ Group clobbered the oligarch financially, sinking the market value of his publicly traded companies. They caused havoc far beyond Russia. Global aluminum prices spiked, battering U.S. and European companies and prompting complaints from European allies. Soon after announcing the sanctions, Treasury softened its stance, giving Western companies more time to end dealings with the aluminum producer.
En+ Group lobbied the Trump administration heavily to lift the sanctions. The British chairman of the company, Gregory Barker, hired Mercury Public Affairs and former U.S. senator David Vitter to try to gain the support of the State Department and other agencies.
In a phone interview last week, Barker, a former U.K. energy minister and a member of Britain’s House of Lords, called Treasury’s plan to lift the sanctions “a very strong and robust response, which is unprecedented in the way it removes Deripaska of control of his own business.”
“If allowed to proceed, [the deal] will chart a new course for an open, global En+ and Rusal led by an independent international board,” Barker said.