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Trump sanctions prompt exit of Russian-owned businesses

News | Published:

SANCTIONS imposed by the Trump administration have caused two Jersey-based businesses owned by one of Russia’s richest men to press ahead with plans to leave the Island.

According to announcements from both the Hong Kong and London Stock Exchanges, Rusal – the world’s second-largest aluminium producer – and EN+ Group – a supplier of natural resources – are both now due to be registered in Russia. They are currently registered at the headquarters of Intertrust at 44 Esplanade.

The two companies are controlled by Oleg Deripaska, a Russian oligarch who is valued at $3.3 billion and has close ties to his country’s president, Vladimir Putin.

The change follows a decision by the US Department of the Treasury to apply a number of strict penalties against seven high-ranking Russian businessman – including Mr Deripaska – as Washington sought to punish the Russians for the poisoning of former spy Sergei Skripal and his daughter, Julia, in Salisbury in March.

The sanctions included asset freezes and a ban on dealing with American citizens.

In August, the boards of Rusal and EN+ Group announced that they were considering re-domiciling from Jersey to a Russian offshore zone created by the Kremlin in response to the sanctions. And the boards of both companies have now confirmed they are pressing ahead with the plans.

A statement released by Rusal on the Hong Kong Stock Exchange, said that ‘after careful deliberation, the board determined that it is in the best interest of the company and the shareholders as a whole to proceed with the company’s continuance out of Jersey’.

It said that if the sanctions were not cancelled by 12 of December, it would ‘have difficulties with corporate infrastructure in Jersey.’

Earlier this year, the board of EN+ Group announced that it was planning to re-register the company in Cyprus.

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However, it said that the ‘imposition of sanctions’ meant it was now planning to move to Russia.

Another of Deripaska’s businesses, Basic Element Ltd, is also registered in Jersey. However, the organisation is not listed on any stock exchange and it is not clear if there are also plans to re-domicile it in Russia.

Meanwhile, Geoff Cook, chief executive of Jersey Finance, said that the loss of the companies did not present a huge concern for the Island.

He said: ‘Russia does not represent a significant amount of business for Jersey and we are confident the Island’s standing as a well-regulated, forward-thinking jurisdiction will continue to be a draw.’

Ed Taylor

By Ed Taylor
Journalist

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