10 July, 2020

Treasury’s Mnuchin defends U.S. decision to lift sanctions on Russian firms

WASHINGTON (Reuters) – U.S. Treasury Secretary Steven Mnuchin insisted on Thursday that the Trump administration would keep tight control on companies linked to Russian oligarch Oleg Deripaska, despite last month’s decision to ease restrictions on the firms.

“Treasury will be vigilant in ensuring that En+ and Rusal meet these commitments. If these companies fail to comply with the terms, they will face very real and swift consequences, including the reimposition of sanctions,” Mnuchin said in a statement released before a closed-door briefing for the House of Representatives.

He spoke to the lawmakers just two days after Democrats asked him to conduct a briefing for House members on the sanctions decision, one of their first actions since the party took control of the chamber last week.

The newly appointed Democratic leaders of seven House committees wrote to Mnuchin, citing their responsibility to conduct oversight of Russia’s attempts to interfere in U.S. elections and other “hostile actions.”

Mnuchin was national finance chairman for President Donald Trump’s 2016 campaign. Democrats have made clear they plan to investigate Russia and its possible links to the 2016 presidential election thoroughly now that they control one house of Congress.

After the briefing, House Speaker Nancy Pelosi told reporters it had been “a waste of time” and criticized Mnuchin as doing little more than reading from an unclassified statement.

Mnuchin told reporters he respected Pelosi but was “shocked” by her comment. He said he had answered many members’ questions.

In their letter, the committee chairs also asked that implementation of the decision to ease the sanctions be postponed. There was no indication that the administration would do so.

The Treasury announced Dec. 20 that it would lift sanctions imposed in April on the core businesses of Deripaska, including aluminum giant Rusal (0486.HK), its parent En+ and power firm EuroSibEnergo, watering down the toughest penalties imposed since Moscow’s 2014 annexation of Crimea.

The companies agreed to restructure to reduce Deripaska’s stakes. The oligarch remains on the sanctions list.

“One of the goals of sanctions is to change behavior, and the proposed delistings of companies that Deripaska will no longer control show that sanctions can result in positive change,” Mnuchin said.

Lawmakers could try to pass a resolution of disapproval of the Treasury’s decision, but passage would require the approval of both the Democratic-majority House and the Senate, where Trump’s fellow Republicans hold a majority of the seats and are unlikely to break with his policy.