LME To Trade Rusal Aluminium Upon Lifting Of OFAC Sanctions
07 January 2019 by Staff
Another hopeful sign emerged last week for troubled Russian Federation aluminium giant U.C. Rusal when the London Metal Exchange confirmed that it would begin again accepting the firm’s aluminium when United States government sanctions are lifted.
Per Reuters, the Exchange discussed resuming the trading of Rusal aluminium upon the revocation of sanctions, and no objections were raised by any of the organization’s members.
The LME originally took up the question of reinstating Rusal on December 19, subsequent to an announcement by the U.S. Treasury’s Office of Foreign Assets Control (OFAC) that a deal had been reached with Rusal, En+ Group, and other firms controlled by Russian businessman Oleg Deripaska to severely curtail his ownership and involvement in them.
Rusal, En+, and Deripaska were among several Russian firms and individuals designated by OFAC last spring pursuant to allegations by the United States government that it was part of a group involved in activities aimed at destabilizing governments around the world, including allegedly influencing the 2016 United States presidential election.
The designation by OFAC threw Rusal’s business into turmoil, scaring away scores of customers fearful of becoming ensnared in secondary sanctions promised by OFAC to any firms not severing ties with the Russian aluminium and alumina titan. Sanctions contributed to a tumultuous year for both alumina and aluminium, teaming up with the Section 232 sanctions on aluminium imposed by the Trump administration, a strike at Alcoa’s Canadian refinery, and a state-ordered curtailment at the world’s biggest alumina refinery in Brazil.
In the interim, Rusal and its sister companies have devised and begun to implement a plan to bring itself into compliance with OFAC requirments, including drastically limiting Deripaska’s ownership and control in the several named firms. Recognizing this, OFAC announced last month the expected lifting of sanctions, which they project to occur on or around January 18.