April 25, 2018 / 9:45 AM / a month ago

LME to reassess Rusal's aluminum after U.S. extends sanctions deadline

LONDON (Reuters) - The London Metal Exchange said on Wednesday it would analyze the implications of U.S. sanctions in relation to Rusal’s metal after the Treasury Department gave customers of the aluminum producer more time to comply.

The offices where the London Metal Exchange is headquartered are seen in the City of London, Britain, January 18, 2018 REUTERS/Peter Nicholls

“The LME is currently undertaking further analysis in relation to the application of (the extension) in relation to Rusal brand metal, and may issue a further communication in due course,” it said in a release.

The U.S. Treasury gave U.S consumers until Oct. 23 instead of June 5 to wind down business with Rusal. It said it would not impose secondary sanctions on non-U.S. entities engaged with Rusal or its subsidiaries.

The extension was in General Licence 14 issued on Monday.

“This new license authorizes transactions or activities that are ordinarily incident and necessary to the maintenance and wind-down of contracts with Rusal only until 23 October 2018, without requiring payment into a blocked account,” the LME said.

“Members may have transferred contracts to an account where Rusal is the only client. Where members wish to transfer contracts back to an omnibus account ... fees for the use of the LME Clear Position Transfer Tool will be waived in respect of such transfers.”

The LME suspended Rusal’s aluminum from its list of approved brands from April 17 after some members raised concerns about settling LME contracts with sanctions-hit companies.

The Treasury Department has imposed sanctions on seven Russian oligarchs and 12 firms they own or control, including Hong Kong-listed Rusal, saying they were profiting from a Russian state engaged in “malign activities” around the world.

Reporting by Pratima Desai and Maytaal Angel, editing by Louise Heavens and Dale Hudson

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