Treasury gives grace period to sever RUSAL ties

The Treasury Department’s Office of Foreign Assets Control on Monday said U.S. companies with business ties to the recently sanctioned aluminum producer and its subsidiaries will have until Oct. 23 to cut those connections.    The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) on Monday said U.S. companies with business ties to the recently sanctioned United Company RUSAL PLC and its subsidiaries will now have until Oct. 23 to sever those interests.
   OFAC said it’s applying a General License 14 to RUSAL and its subsidiaries to allow for the “winding down” period. 
   In accordance with pre-existing agency guidance, OFAC also said it will not impose secondary sanctions on non-U.S. persons for engaging in the same activity involving RUSAL or its subsidiaries that General License 14 authorizes U.S. persons to engage in.
   “RUSAL has felt the impact of U.S. sanctions because of its entanglement with Oleg Deripaska, but the U.S. government is not targeting the hardworking people who depend on RUSAL and its subsidiaries,” said Treasury Secretary Steven T. Mnuchin in a statement. 
   “RUSAL has approached us to petition for delisting,” he added. “Given the impact on our partners and allies, we are issuing a general license extending the maintenance and wind-down period while we consider RUSAL’s petition.”  
   On April 6, OFAC designated RUSAL for being owned or controlled by EN+ Group. In that same action, the agency designated EN+ Group for its ownership ties to Oleg Deripaska, one of the U.S.-sanctioned Russian oligarchs. RUSAL is based in the Bailiwick of Jersey and is one of the world’s largest aluminum producers.
   Maersk said in customer advisory published on April 13 that because U.S. sanctions it would cease acceptance of cargo with a reasonable determined relation to so-called “specially designated nationals” and entities being sanctioned by the U.S.
   Reuters reported both “Maersk Line and Mediterranean Shipping Company (MSC) both said they were halting any new trade with Russian entities targeted by U.S. sanctions.”
   In 2016, Maersk announced a three year deal with Rusal under which it would transport up to 10,000 TEUs annually.
   MSC said in a statement that it “closely monitors all sanctions measures introduced by the U.S. government. In consideration of the latest amendments of the Ukraine/Russia-related sanctions by the Office of Foreign Assets Control, MSC immediately instructed its worldwide agencies not to engage in any new contracts involving U.S. Specially Designated Nationals listed under the Ukraine/Russia sanctions program. MSC is also reviewing current business relationships to see if any are impacted by these latest amendments, in line with the timetable set out by the U.S. government.”