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Trump lifts sanctions on Russia oligarch Oleg Deripaska in 'huge gift to Putin'

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The Trump administration has lifted sanctions against companies linked to Russian oligarch Oleg Deripaska, defying efforts led by congressional Democrats to block the move.

Earlier this month, 11 Republicans in the Senate joined Democrats in a bid to keep restrictions on aluminium producer Rusal, its parent En+ Group and JSC EuroSibEnergo, a private energy company.

But that was not enough to overcome an aggressive lobbying campaign, led by a British lord who chairs one of the firms, and opposition from Donald Trump and most of his fellow Republicans.

On Sunday, the Treasury Department ended the sanctions against Mr Deripaska’s business empire, having announced its intention to do so last month.

In its statement, the US Treasury said the three companies had agreed to its conditions for ending sanctions by reducing Mr Deripaska’s direct and indirect shareholding stake and severing his control.

That action, it said, ensured most directors on the En+ and Rusal boards would be independent directors, including Americans and Europeans who had no business, professional or family ties to Mr Deripaska or any other person designated for sanctions by the US Treasury.

“The companies have also agreed to unprecedented transparency for Treasury into their operations by undertaking extensive, ongoing auditing, certification, and reporting requirements,” said the statement.

Mr Deripaska, a close ally of Russian president Vladimir Putin, remains personally subject to US sanctions.

The sanctions, imposed in April, were designed to punish Russia for its actions including its annexation of the Crimea from the Ukraine, efforts to interfere in the US elections and support for Syria’s government in its civil war.

Advocates for keeping the sanctions argued Mr Deripaska, who has been accused of links to organised crime, retained too much control over the companies.

Lawmakers from both parties also said it was inappropriate to ease the sanctions while special counsel Robert Mueller investigates whether Mr Trump’s 2016 presidential campaign colluded with Moscow.

On Monday, former US ambassador to Russia, Michael McFaul, described the Trump administration’s decision as a “huge gift to Putin”.

“Lifting of these sanctions was a big win for Putin and Deripaska. And what did we – the American people – get in return? Nothing,” he wrote on Twitter.

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After the US Treasury’s announcement on Sunday, En+ named its new independent board members, which includes Christopher Bancroft Burnham, a former official in Mr Trump’s presidential transition team.

Rusal also said Jean-Pierre Thomas had resigned as chairman and director of the company as part of the deal to lift sanctions. Shares in Hong Kong-listed Rusal jumped more than 5 per cent in early trading on Monday.

Trump administration officials, and many Republicans who opposed the effort to keep the sanctions in place, had said they worried about the effect on the global aluminium industry. They also said Mr Deripaska’s decision to lower his stakes in the companies so that he no longer controlled them showed the sanctions had worked.

Rusal is the world’s largest aluminium producer outside China. The sanctions on the company spurred demand for Chinese metal, with China’s aluminum exports jumping to a record high in 2018.

Mr Trump denies collusion, and Moscow has denied seeking to influence the US election on Mr Trump’s behalf, despite US intelligence agencies’ findings to the contrary.

Mr Deripaska had ties with Paul Manafort, Mr Trump’s former campaign manager. Mr Manafort pleaded guilty in September 2018 to attempted witness tampering and conspiring against the US.

The lifting of sanctions comes after a lobbying campaign led by Conservative peer Lord Barker, a former UK energy minister and now chairman of En+.

Lord Barker reportedly used lobbyists with ties to the Trump administration, law firms and public relations experts to make the argument that Mr Deripaska was committed to giving up control of his companies.

Mr Deripaska is one of Russia’s wealthiest men. He amassed his fortune under Mr Putin and has bought assets abroad in ways widely perceived to benefit the Kremlin’s interests.

US diplomatic cables from 2006 described him as “among the two or three oligarchs Putin turns to on a regular basis” and “a more-or-less permanent fixture on Putin’s trips abroad”.

The 50-year-old found fame in the UK in 2008 when it was revealed that then-business secretary, Lord Mandelson, and shadow chancellor George Osborne had socialised with the oligarch on his yacht off the coast of Corfu.

Additional reporting by agencies

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