US sanctions on Russian oligarch Oleg Deripaska will reverberate around the world

The US government’s decision to include Russian magnate Oleg Deripaska on its sanctions blacklist on Friday will reverberate around the world. The oligarch, who has called the sanctions “groundless, ridiculous and absurd”, has a business empire with a global footprint and counts major multinationals as partners. Washington imposed sanctions on seven Russian oligarchs – including Deripaska – 12 companies they own or control, and 17 senior Russian government officials because, it said, they were profiting from a Russian state engaged in “malign activities” around the world. Deripaska, estimated by Forbes magazine to have a net worth of US$6.7 billion, is the main owner of the conglomerate EN+, which in turn is the co-owner of some of the world’s biggest metals producers, Rusal and Nornickel. His inclusion on the US sanctions list could potentially also create complications for companies with which he does business. This includes German car giant Volkswagen and commodities trader Glencore. Russia promises ‘tough response’ to US sanctions on oligarchs Part of his empire, Rusal, said it regretted its inclusion on the US sanctions list, adding that its advisers were studying the situation. Hong Kong-listed Rusal is one of the world’s biggest aluminium producers. It says exports to the United States account for over 10 per cent of its output, and it owns assets in Italy, Ireland, Sweden, Nigeria, Guyana, Guinea. It also owns a stake in Australian QAL, the world’s top alumina refinery. Nornickel has assets in Finland, in Australia, where it holds a licence to develop the Honeymoon Well Project, and in South Africa, where it has a 50 per cent stake in the country’s only nickel concentrate producer, Norilsk Nickel Nkomati. A Nornickel representative declined to comment on the risks resulting from the sanctions on their shareholder. In its statement announcing the sanctions, the US Treasury Department said US entities will be “generally prohibited from dealings with” the people and firms on the sanctions list. In addition, it said, companies outside the United States “could face sanctions for knowingly facilitating significant transactions for or on behalf of” sanctioned entities. Volkswagen has a joint plant with GAZ, a Russian carmaker which is a subsidiary of Basic Element, another of Deripaska’s businesses. Basic Element was also sanctioned on Friday. Under a contract that runs until 2025, the plant assembles vehicles from the Volkswagen stable. The German carmaker has been in talks to buy a stake in GAZ, five sources familiar with the discussions told Reuters in December last year. Poisoned ex-spy Skripal no longer in critical condition, says hospital Swiss-headquartered Glencore is a shareholder in Rusal, and has said it plans to switch those shares to Deripaska’s newly-created holding company, EN+. According to a Rusal prospectus, its major customers include Glencore, Toyota, and Rio Tinto Alcan. Other foreign firms with ties to Deripaska’s empire include Austrian construction company Strabag, in which the Russian’s firm Rasperia has a blocking stake, and Singapore’s Changi Airports International, which is a partner with a Deripaska-owned airports firm. In his life and career, Deripaska has frequently intersected with the Kremlin. He holds regular meetings with President Vladimir Putin, he invested heavily in building infrastructure for Russia’s 2014 Sochi Winter Olympics and has said his own interests are indivisible from the state’s interests. The mother of Deripaska’s children, Polina, is the daughter of Valentin Yumashev, who was presidential chief of staff under former Russian president Boris Yeltsin. Yumashev later married Yeltsin’s daughter, Tatyana Dyachenko. Yeltsin and his entourage were instrumental in elevating Vladimir Putin to power as the anointed successor to the ailing president. Russia may block YouTube after Oleg Deripaska 'graft' video In February, the website of Russian opposition leader Alexei Navalny published a report alleging that Deripaska met Sergei Prikhodko, Russia’s deputy prime minister, on a yacht belonging to the businessman off the coast of Norway in 2016. Deripaska accused Navalny and others of spreading lies that he had committed unlawful actions and obtained an injunction from a court requiring media outlets stop disseminating the disputed content. The Russian state telecoms watchdog blocked Navalny’s website. Deripaska did business in the 2000s with Paul Manafort, who later became campaign manager for Donald Trump when he was running for president. At the time he was doing business with Deripaska, Manafort, a Republican operative, was providing campaign advice to Viktor Yanukovich, a pro-Moscow challenger for the presidency of Ukraine. Yanukovich was elected president in 2010. A Cyprus-based company tied to Deripaska, Surf Horizon Limited, sued Manafort and his aide Rick Gates, in a New York state court in January, accusing them of misappropriating more than $18.9 million earmarked for deals in Ukraine in 2008. That lawsuit emanated from a business partnership that dates to 2006 when Manafort and Gates convinced Deripaska to invest in a private equity fund that would make investments primarily in Russia and Ukraine, according to an offering memorandum referenced in the lawsuit. Jeffrey Eilender, who is representing Manafort in the lawsuit, told Reuters last month he planned to argue for dismissal based in part on the assertion that Surf Horizon’s claims are past the statute of limitations. On Friday, Eilender said he believed the sanctions would make the pursuit of the lawsuit meaningless. “As a practical matter, he can’t take money or assets out of the United States,” Eilender said, referring to Deripaska. Gates currently does not have counsel in the Surf Horizon case.

US sanctions on Russian oligarch Oleg Deripaska will reverberate around the world

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Oleg Deripaska, with an estimated net worth of US$6.7 billion, has an empire that includes major metals producer Rusal

Oleg Deripaska, with an estimated net worth of US$6.7 billion, has an empire that includes major metals producer Rusal