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House Committee Leaders Seek Briefing on Termination of Certain Sanctions against Russian Oligarch

James.Treanor@cwt.com's picture
Commentary by James Treanor

House committee leaders called on Treasury Department ("Treasury") Secretary Steven Mnuchin to brief Congress about recent decisions to terminate sanctions on companies tied to designated Russian oligarch Oleg Deripaska. The joint letter sent to the Treasury Secretary was signed by the chairs of the Ways and Means Committee, the Financial Services Committee, the Judiciary Committee, the Foreign Affairs Committee, the Permanent Select Committee on Intelligence, the Oversight and Reform Committee and the Committee on Homeland Security.

Specifically, House leaders expressed concern that the U.S. agreement with Mr. Deripaska "appears to keep intact significant ownership" by Mr. Deripaska of one of his businesses "while reportedly transferring some shares and financial interests to the Kremlin-linked sanctioned Russian bank VTB." The chairs noted that they have more questions with respect to whether the sanction terminations are justified.

The chairs noted that it was difficult to complete a review of the Treasury's decision because notification to Congress was given on December 19, 2018, "just prior to an adjournment for an extended recess and during which time a government shutdown ensued." The leaders requested that Treasury delay the implementation of the sanction terminations until Mr. Mnuchin had an opportunity to brief House members.

Commentary

Under the Countering America's Adversaries Through Sanctions Act, Congress has 30 days to review and potentially object to Treasury's plan to terminate sanctions on three companies targeted due to their ownership by Russian oligarch Oleg Deripaska. The terms of Treasury's agreement are designed to ensure, among other things, that Mr. Deripaska will not continue to exercise control over the companies. Notwithstanding these protections, the seven Democratic Party House committee chairs have signaled that Treasury's plan will not be rubber-stamped. It is too soon to tell whether the chairs might pursue a formal joint resolution of disapproval - or whether such a resolution would find the votes to pass.

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