Sanctions turn Putin tycoons into pariahs

Eight of 12 oligarchcontrolled firms listed for US sanctions on Friday owned by Oleg Deripaska

The US is taking sanctions against Russia to a new level. The US Treasury on Friday turned away from past efforts like curbs on visas to unleash measures that will sever access to global financial markets, buyers and suppliers for several of Russia’s Kremlinconnected billionaires.

One of them, Oleg Deripaska, bears the brunt. And sanctions against him entangle some of the world’s biggest businesses and financial groups. Shares of his giant aluminium operation trade in London, Hong Kong and Moscow, and customers include Glencore and Toyota Motor Corp.

Philip Lader, a former US Ambassador to the UK, and Ivan Glasenberg, chief executive officer of Glencore, are among board members of Deripaska’s United Co Rusal, the biggest aluminium producer outside China. Its shareholders include Vanguard Group, JPMorgan Chase & Co and Invesco Ltd, according to recent US regulatory filings.

“You face a really simple question,” said Brian O’Toole, a former chief of staff at the

United Co Rusal’s shareholders include Vanguard Group, JPMorgan Chase & Co and Invesco, according to US regulatory filings.

Treasury’s Office of Foreign Assets Control, which draws up sanctions. “Are you going to continue to do business with Deripaska, or with the US?”

Loss in market value

Eight of the 12 oligarchcontrolled companies listed for sanctions on Friday are owned by Deripaska, a frequent companion of President Vladimir Putin on the Russian leader’s trips abroad. One of them, En+ Group Plc, immediately lost a record fifth of its market value. US operations of sanctioned companies are now frozen and Americans mostly barred from dealing with them, while others outside the US will be punished for carrying out significant transactions with the businesses.

The measures directly target oligarchs with companies that have wide-ranging involvement in international capital markets.