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London Metal Exchange's suspension on Rusal metal to stay

The London Metal Exchange, or LME, said it did not have any plans to lift a suspension on metal made by United Co. Rusal PLC despite a recent decision by the U.S. to extend a deadline for companies to wind down contracts with the Russian firm, the Financial Times reported May 11.

Under the restriction, any metal produced or sold by Rusal after the U.S. sanctions — imposed against Russian entities and individuals for profiting from the country's "malign activity" around the globe — announced on April 6 cannot be warranted or be placed in the LME's warehouses. The response follows a May 11 report by Reuters that Rusal and Glencore PLC had requested the LME to lift the restriction, after the U.S. Treasury extended the deadline for U.S. consumers to wind down their business with Rusal from June 5 to Oct. 23.

The Treasury's extension is part of General License 14, which meant that aluminum made and sold by Rusal until Oct. 23 would be excluded from U.S. sanctions, on the condition that the agreement for the purchase was made before the sanctions were imposed.

According to the Financial Times report, the LME decided to keep the suspension in force.

"The LME has analysed the implications of Ofac General Licence 14 (GL-14) for Rusal brand metal. The LME understands that there are concerns in the market about how it could be established that metal was GL-14 compliant,” the bourse said in a statement

"Unless or until a process could be implemented that would give sufficient comfort for the market as to GL-14 compliance (including that any post-designation metal was supplied under pre-designation contracts), the temporary conditional suspension will remain in effect."