The U.S. Senate rejected a resolution introduced by U.S. Senator Chuck Schumer (D-NY) to block the Trump administration from lifting sanctions against three companies tied to designated Russian oligarch Oleg Deripaska. U.S. Senators voted 57-42 to end debate on the resolution, falling short of the 60 votes needed to proceed.
As previously covered, the U.S. Treasury Department ("Treasury") Office of Foreign Assets Control ("OFAC") planned to terminate sanctions imposed on En+ Group plc, UC Rusal plc and JSC EuroSibEnergo. According to Treasury Secretary Steven T. Mnuchin, OFAC had sanctioned these companies because previously sanctioned Russian oligarch Oleg Deripaska had an ownership interest, and not because of any illegal conduct by the companies themselves.
Commentary / James Treanor
The Senate vote signals that Treasury likely will be able to proceed with the de-listing of the Deripaska-related companies, even as early as January 18 when the statutory 30-day Congressional review period comes to an end. Soon after the vote, however, OFAC issued a one-week extension of the three general licenses. Since these general licenses would be unnecessary if the removal of sanctions was imminent, the OFAC extension suggests that Treasury may proceed at a more measured pace. Treasury's action is perhaps a recognition of Congressional Democrats' January 8 request for more time to review the matter, and other complaints about being told of OFAC's plans in late December, "just prior to an adjournment for an extended recess and during which time a government shutdown ensued." It is also possible that, as described in a Treasury press release, the additional time was simply needed to complete technical steps related to the removal of sanctions.
Assuming sanctions ultimately are removed, the companies will be subject to stringent scrutiny from OFAC under an agreement requiring, among other things, the monitoring of board appointments, as well as ongoing audit, certification, and reporting requirements. Given the recent interest from Capitol Hill, the companies should count on active Congressional oversight as well.
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