Treasury chief: No sanctions relief for Russian oligarch

Treasury Secretary Steven Mnuchin plans to tell lawmakers in a classified briefing Thursday that the Trump administration will keep strict U.S. sanctions on the Russian oligarch Oleg Deripaska and any companies he owns. (File Photo
By United States Department of the Treasury/Wikimedia commons, Public Domain)

WASHINGTON — Treasury Secretary Steven Mnuchin plans to tell lawmakers in a classified briefing Thursday that the Trump administration will keep strict U.S. sanctions on the Russian oligarch Oleg Deripaska and any companies he owns.

In one of Democrats’ first oversight moves as the new majority in the House, seven committee chairmen wrote to Mnuchin on Tuesday and asked him to explain by the end of the week why the U.S. decided to ease sanctions on three companies linked to Deripaska. Democrats have promised to scrutinize President Donald Trump’s ties to Russia.

Mnuchin responded swiftly, agreeing to provide the briefing just two days later.

The Democrats are asking about a December announcement that the U.S. would lift sanctions on the three companies — the aluminum manufacturing giant Rusal, EN+ Group and the Russian power company JSC EuroSibEnergo. EN+ Group is a holding company that owns nearly 50 per cent of Rusal.

In the letter, the Democrats said the sanctions deal appears to allow Deripaska to keep “significant ownership” of one of the companies.

But Treasury maintains that Deripaska will remain blacklisted as part of sanctions that targeted tycoons close to the Kremlin. It says the companies have committed to diminish Deripaska’s ownership and sever his control.

In a statement released ahead of the briefing, Mnuchin reiterated that Deripaska remains under sanctions, “his property and interests remain blocked, and any companies he controls are also sanctioned.” The three companies were originally targeted because they were owned or majority-controlled by Deripaska.

“These entities are undergoing significant restructuring and governance changes that sever Deripaska’s control and significantly diminish his ownership,” Mnuchin said in the statement. “They have committed to provide Treasury with an unprecedented level of transparency into their dealings to ensure that Deripaska does not reassert control. As a result, these entities will no longer be designated for sanctions.”

He said if the companies fail to comply with the terms, they could face the re-imposition of sanctions.

“One of the goals of sanctions is to change behaviour, and the proposed delistings of companies that Deripaska will no longer control show that sanctions can result in positive change,” Mnuchin said.

The letter to Mnuchin was signed by House Ways and Means Chairman Richard Neal, D-Mass.; House Financial Services Chairwoman Maxine Waters, D-Calif.; House Foreign Affairs Committee Chairman Eliot Engel, D-N.Y.; House Intelligence Committee Chairman Adam Schiff, D-Calif.; House Oversight and Reform Committee Chairman Elijah Cummings, D-Md.; House Judiciary Committee Chairman Jerrold Nadler, D-N.Y.; and House Homeland Security Committee Chairman Bennie Thompson, D-Miss.