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Two Jersey-based Russian firms due to leave Island

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THE US government has lifted sanctions against a pair of Jersey-based companies after they agreed to reduce their ties to a controversial Russian oligarch and billionaire.

Vladimir Putin and Russian metals magnate Oleg Deripaska

However, both EN+ Plc and Rusal Plc are still set to leave the Island in response to the imposition of the sanctions, with the former registering a formal request to relocate to Russia with the Jersey Financial Services Commission shortly before Christmas.

In April this year the Trump administration applied a number of strict penalties against several high-profile Russian businessmen and their companies following the poisoning of former spy Sergei Skripal and his daughter in Salisbury, which was widely believed to be have been an attack ordered by the Kremlin.

Those affected by the sanctions, which included asset freezes and a ban on dealing with American citizens, were billionaire Oleg Deripaska and three Jersey-registered companies in which he has a controlling interest – En+, Rusal Plc and Basic Element Ltd.

In August the boards of Rusal – the world’s second-largest aluminium producer – and aluminium and power-producer EN+ both tabled plans to re-domicile from Jersey to Russia, with the sanctions cited as the cause of the move. On 24 December, a public notice was issued indicating that EN+ had filed for relocation to Russia with the JFSC.

‘Any creditor of the company who objects to the application may, within 21 days of the date of this advertisement, give notice of his objection to the company,’ the notice says.

It is unknown whether there any plans to relocate Basic Element, an investment and management company which is not publicly listed.

The US Treasury, which was responsible for the sanctions, has now announced that it intends to lift the measures on Rusal and EN+ within 30 days after they agreed to a restructuring programme which will diminish the influence of Mr Deripaska, who will remain personally subject to penalties.

The agreement requires Mr Deripaska to reduce his ownership stake in EN+, which is the parent company, from 70 per cent to 44.95 per cent. He will no longer receive cash for his shares or from future dividends issued by the companies.

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A statement released by the US Treasury said that the sanctions were applied to Mr Deripaska because he has been accused of a number of crimes, including ordering an assassination, racketeering, money-laundering and bribery.

Jersey Finance chief executive Geoff Cook has previously said that Russia ‘does not represent a significant amount of business in Jersey’.

Rusal, EN+ and Basic Element received legal advice in Jersey from law firm Ogier and were registered at 44 Esplanade at the offices of finance firm Intertrust.

Ian Heath

By Ian Heath
author

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