Lawmakers to probe removal of Rusal sanctions

US senate minority leader Chuck Schumer (D-New York) has introduced a resolution scrutinizing the Treasury Department's decision to lift sanctions on En+ and Rusal, two entities formerly controlled by Russian oligarch Oleg Deripaska.

Because the Treasury's decision to remove the sanctions requires congressional approval by 18 January, any decision to block or delay the removal would require a simple majority in both houses. The motion is unlikely to succeed though, as the Republican-controlled senate would have to break with the executive branch.

The resolution is not necessarily meant to block the removal of sanctions in itself, but will "[give] Congress until January 17 to make its own independent assessment of whether it adequately protects US economic and national security," Schumer said in a letter late last week.

The Treasury targeted Deripaska and his companies under a statute Congress passed in 2017 that mandated sanctions against wealthy Russians believed to be close to Russian president Vladimir Putin. The same law gives Congress an opportunity to review and overrule Treasury's decision to remove the sanctions.

The Treasury's Office of Foreign Assets Control notified congress on 19 December that it planned remove the sanctions on the two companies, but not Deripaska himself, in 30 days, after the businessman took steps to reduce shares and influence in the companies.

OFAC placed sanctions on seven Russian businessmen in April 2018, including Deripaska, and 12 companies associated with them in response to alleged "malign activities, including attempts to subvert western democracy."

Rusal is one of the largest primary aluminum producers in the world outside of China and a major supplier of P1020 and extrusion billet to US manufacturers.

Following the sanctions in April, US premiums for 6063 extrusion billet soared by 33pc in a week and continued to climb, finally reaching an Argus price history peak of 19¢/lb in July.

Premiums have since fallen, but remain significantly above December 2017 levels. US extruders have found other suppliers, but Rusal's absence left the spot market tighter. Argus assessed premiums at 12-14¢/lb last week compared with 9-10¢/lb during the same period in 2017.