August 09, 2018

Warren Investigation Forces Trump Administration to Reverse Tariff Exemption for U.S. Subsidiary of Sanctioned Russian Company

Administration Must Explain How Company Controlled by Putin Ally got a Tariff Exemption for Millions of Dollars in Aluminum Imports

Washington, DC - United States Senator Elizabeth Warren (D-Mass.) sent a ten-page letter to Secretary of Commerce, Wilbur Ross, seeking information on how and why Rusal America Corporation, a subsidiary of United Company RUSAL PLC (UC Rusal) - a sanctioned Russian company controlled by Oleg Deripaska, a sanctioned Russian oligarch and a "close Putin confidant,'' - received an exemption from President Trump's aluminum tariffs. One day after she sent the letter with the findings of her investigation, the Commerce Department reversed the exemption - but they still owe the American people an answer for how a sanctioned Russian company got an exemption for millions of dollars of aluminum imports just days after President Trump met privately with President Putin in Helsinki.

"The Trump Administration undermined our national security by handing out a tariff exemption for millions of dollars of aluminum imports to a sanctioned Russian company - only to reverse this decision after my investigation revealed this giveaway. They owe the American people an explanation for how this fiasco happened," said Senator Warren.

In her letter, Senator Warren had noted that the exemption was highly unusual in several ways: (1) it was one of the largest exemptions granted to date (2) it was granted to a company controlled by Mr. Deripaska and despite the objection of Century Aluminum, a domestic producer, and (3) it was granted after an initial request was apparently returned to the company by the Commerce Department for resubmission.

"It is difficult to understand how a tariff exemption for a subsidiary of a sanctioned Russian entity protects national security or benefits domestic U.S. aluminum producers," wrote Senator Warren. "My questions about the approval of this exemption are particularly urgent because Rusal's subsidiary has dozens of pending requests for aluminum imports."

UC Rusal was sanctioned by the United States largely due to its financial ties to Russian oligarch Oleg Deripaska, a member of Vladimir Putin's "inner circle." Another sanctioned Russian oligarch, Viktor Vekselberg, and his partners also reportedly held a significant stake in Rusal. Deripaska and Vekselberg have been connected to former Trump campaign manager Paul Manafort and former Trump personal lawyer Michael Cohen.

The Rusal decision and then reversal raises questions about this specific exemption, about the Commerce Department's approval process for exemptions from President Trump's aluminum and steel tariffs, and about how the Commerce Department will treat dozens of pending Rusal America exemption applications. It also raises additional questions about the connections between these Russian owners of Rusal and Paul Manafort and Michael Cohen.