How the Russian aluminum giant escaped US sanctions

These were to be the toughest sanctions the United States has ever imposed on a Russian oligarch. Seventeen days later, Washington neutralized them.

On April 23, the US Treasury eased restrictions on the aluminum company Rusal by billionaire Oleg Deripaska. Washington's change in course stems from the supply of a widely used commodity such as aluminum.

It also suggests that the Trump administration is in dire straits as it manipulates the international economic battles it has fought on various fronts, including China and Iran.

Several European governments, including Germany and France, have lobbied Washington to retreat. Multinational corporations Rio Tinto and Boeing have also approached the US Treasury in an attempt to soften Rusal's terms.

Sources said everyone was making the same argument: pressure on the largest aluminum producer outside of China would result in worldwide strikes, disruption to the production of a variety of goods from cars and aircraft, cans and foil, and jeopardize operations.

Unlike previous cases of sanctions against Russia, European countries did not have the opportunity to consult with Washington about punitive actions that would have meaning for the European economy. One reason for the lack of dialogue: The US State Department no longer has a sanctions policy coordinator to liaise with other governments.

The US Treasury Office, the Office of Foreign Assets Control (OFAC), took action, saying it is working to mitigate the impact of the sanctions on allies and industries that face "unwanted spillover effects."

The sanctions were the toughest the United States has imposed on a Russian company since Moscow annexed Crimea in 2014. The April 6 notice gave buyers a 30-day deadline to receive shipments from Rusal before transactions were barred. Any person or company that did not comply would themselves be shut down, while the Treasury could seize any financial proceeds paid to Rusal.

The effect was immediate. Aluminum prices rose 15 percent as Rusal stopped supplying customers. In addition to aluminum production, the company produces alumina, the raw material needed for the production of aluminum.
Rusal told metals and mining conglomerates Rio Tinto that it is suspending alumina supplies from its Irish smelter in Aughinish to the Dunkirk aluminum smelter in Rio, France, Europe's largest aluminum producer, according to industry sources. According to sources, the Russian company fears that any payment received will be hijacked�