December 19, 2018 3:57 PM EST

(Bloomberg) — The Trump administration is ready to remove sanctions on Russian billionaire Oleg Deripaska’s aluminum company, United Co. Rusal, after reaching an agreement to significantly reduce his ownership stake.

Deripaska will remain under U.S. sanctions and his property will remain blocked, but Treasury intends to remove financial restrictions on Rusal, En+ Group Plc and JSC EuroSibEnergo. The move will take effect in 30 days unless Congress blocks the action, the Treasury Department said in a statement Wednesday.

“These companies have committed to significantly diminish Deripaska’s ownership and sever his control,” Treasury Secretary Steven Mnuchin said in the statement. “The companies will be subject to ongoing compliance and will face severe consequences if they fail to comply.”

Mnuchin added that Treasury “maintains the ability under the terms of the agreement to have unprecedented levels of transparency into operations.”

The Treasury secretary highlighted that Deripaska, not the companies, was the intended target of U.S. sanctions imposed in April on associates of Russian President Vladimir Putin over Moscow’s interference in the 2016 U.S. presidential election.

The announcement came on the same day Treasury imposed new sanctions on 15 Russian military intelligence operatives over the U.S. election meddling, as well as the attempted assassination of a former double agent in the U.K. One former intelligence officer was accused of working for Deripaska.

Rusal is among the largest companies the U.S. has ever put on its sanctions designation list. The value of the aluminum producer has declined by more than half from $9.2 billion more than seven months ago.

Deripaska’s agreement with Treasury includes cutting his direct and indirect share ownership below 50 percent in each company, overhauling the boards of En+ and Rusal, and “committing to full transparency with Treasury by undertaking extensive, ongoing auditing, certification, and reporting requirements,” the department said in a statement.

The oligarch’s stake in EN+ will fall from approximately 70 percent to 44.95 percent, according to a letter from the Treasury Department to Senate Majority Leader Mitch McConnell. VTB Bank or another entity approved by the Treasury Department will take ownership of a block of share in EN+ as collateral for previous obligations companies controlled by the billionaire have to the bank. Deripaska also will donate a block of shares to a charitable foundation, according to the letter.

Half of EN+’s restructured board will be comprised of U.S. or U.K. nationals, and Rusal’s current board chairman will step down, according to the letter. Deripaska also won’t be allowed to receive cash either in return for shares he relinquishes or from future dividends he may receive from the companies.

Aluminum markets spun into chaos after the sanctions against the companies were announced, with global prices shooting up as much as 20 percent in the first week. Sanctioning the world’s largest aluminum supplier outside of China threatened a worldwide shortage of the metal, forcing Mnuchin to backtrack. Since April, he has closely monitored the issuance of extensions to the sanctions on Rusal as Treasury negotiated a deal with Deripaska to save the company from the full range of financial restrictions.

Congress has 30 days to call a vote to block Treasury’s ability to lift the sanctions, according to the Countering America’s Adversaries Through Sanctions Act passed by lawmakers in August 2017.

More Must-Reads From TIME

Contact us at

You May Also Like