The Republican-dominated U.S. Senate on Jan 15. moved forward a resolution hindering the Trump administration's plan to lift sanctions against Russian billionaire Oleg Deripaska's companies United Co. Rusal PLC, its parent En+ Group PLC, and EuroSibEnergo PLC.
The Senate voted 57-42 in favor of a motion to proceed with a resolution disapproving the U.S. Treasury Department's move to ease the sanctions, with 11 Republicans defying President Donald Trump to vote with the Democrats.
The measure may still struggle to take effect and block the plan to lift sanctions as it would need to pass the Senate, where the Republicans hold a slight majority, and avoid a presidential veto.
The Democrats have sought to prevent the Treasury's Office of Foreign Assets Control plan to ease sanctions against the Russian companies, which agreed in December 2018 to "significant restructuring" aimed at reducing Deripaska's ownership and severing his control. However, the Democrats have cast doubt on the extent to which the changes actually separate the Kremlin associate from the power and metals trio.
U.S. Treasury Secretary Steven Mnuchin defended lifting the sanctions to Congress on Jan. 11, explaining that they could be swiftly reimposed in the event of noncompliance, in response to a Jan. 8 letter from a group Democrats calling on him to brief the House on the details of the embattled plan.
Eight ambassadors to the U.S. representing seven EU countries including Germany, France and the U.K., and the EU itself wrote a letter dated Jan. 4 to U.S. Senate Democratic Minority Leader Chuck Schumer welcoming the Treasury's plan to ease sanctions; they asserted their commitment to maintaining "robust" sanctions against Russia, but argued that lifting those against Rusal and En+ would safeguard European jobs and industry.
The envoys said removing the Russian companies from the sanctions list would prevent "serious damage" to the European aluminum industry and preserve supply chains that would otherwise likely be rerouted to China, strengthening the Asian giant's leading position in the global industry.
The Office of Foreign Assets Control alerted Congress on Dec. 19, 2018, of its intention to end sanctions against the Russian companies in 30 days, citing their "significant" restructuring and changes of corporate governance.
Rusal shares were down 1.86% by late afternoon in Moscow.