There was good news for the greater Shannon area last weekend, when the US treasury announced it was officially lifting sanctions on energy giant Rusal, the owner of the Aughinish Alumina plant in Limerick.
Local politicians breathed a collective sigh of relief as the decision hit the newswires late on Sunday night, bringing reprieve for the hundreds of workers at the plant.
The decision has been a long time coming. It has been nine months since the US treasury announced sanctions on Rusal and three companies controlled by Russian oligarch Oleg Deripaska, putting the future of the Aughinish plant in doubt.
But while the lifting of the sanctions allows Aughinish to continue in business, in Washington the battle over Mr Deripaska is far from over.
Aughinish’s unlikely involvement with Mr Deripaska – once one of the world’s richest men – began in 2006 when Rusal mopped up Glencore’s aluminium business.
The Swiss mining giant had bought the Limerick plant in 1999 from Canadian company Alcan, which had originally built the facility along with other investors in the late 1970s.
Aughinish soon became one of the biggest suppliers of alumina in Europe, exemplifying the open-borders, increasingly internationalist economic policy being embraced by the Irish Government.
And Aughinish’s supply chains continue to offer a shining example of globalisation in action.
Bauxite, the raw material used in the plant, is mostly shipped in from Guinea in West Africa, and from Brazil. The finished material produced at the plant, alumina, is then exported mostly to Europe, where it is smelted into aluminium.
Up to 30 per cent of Europe's aluminium is provided by Aughinish, with major smelting plants in Sweden and Iceland dependent on the facility for alumina, while businesses, such as Airbus in France, are the ultimate beneficiaries of the product.
Since its acquisition by Rusal, Aughinish has been a notoriously low-key entity, its annual corporate filings giving only cursory insight into the financials of a company that is a crucial cog in the wheel of the Russian aluminium giant.
That changed in April 2018 when the US treasury announced sanctions on seven Russian individuals and related companies over “malign activities” including the incursion into Ukraine. Among them was Mr Deripaska, who was hit by individual sanctions and sanctions against three of his companies – Rusal, its holding company EN+ and another company it controls, EuroSibEnergo.
The move locked the company out of the $140 billion (€122 billion) global aluminium industry, plunging the future of Europe’s biggest alumina plant into doubt.
Aluminium prices jumped, a situation compounded by separate steel and aluminium tariffs imposed by the Trump administration as part of its trade war with the EU and China.
Almost immediately, a major lobbying effort by Ireland kicked into action.
Within a week, Taoiseach Leo Varadkar had travelled to Limerick for a private meeting with the management team of the Rusal-owned plant.
In May, the Minister for Business, Enterprise and Innovation Heather Humphreys flew to Washington where she met commerce secretary Wilbur Ross and others to press the case that the sanctions would have unintended consequences for thousands of jobs in Europe, including Ireland, as well as adverse consequences for European and global aluminium markets.
Irish ambassador to the United States, Dan Mulhall and the Irish Embassy in Washington DC upped its engagement with senior treasury officials, the US state department and US congress. In co-ordination with the EU delegation in Washington DC, led by Irishman David O'Sullivan, it joined forces with other European countries, including France, Sweden and Britain to make its case.
A key argument, according to officials briefed on the message, was that a destabilisation of European aluminium markets would open the door to more aluminium production from China; something the Trump administration, engaged in a trade war with China, did not want.
Evidently the US treasury got the message. It gave Rusal some breathing space, extending a deadline for companies to wind down dealings with Russia, while beginning to formulate a plan to exempt Rusal if Mr Deripaska relinquished control.
Throughout the summer and into late 2018, as negotiations about a restructuring plan for Rusal trundled on, the deadline was extended several times, postponing the imposition of sanctions. But Irish officials were getting worried. The sheer scale of the plant in Aughinish meant that contracts were entered into months in advance, and purchasers needed more certainty than a continuous cycle of extensions.
Government agencies also faced another nightmare scenario. If Aughinish folded, the owners could potentially walk away from the heavy-industry site, leaving the Government with a massive environmental headache.
The lobbying efforts eventually appeared to pay off. On December 19th, the Irish Government got an early Christmas present as the US treasury announced that sanctions on the three energy companies controlled by Mr Deripaska would be lifted within 30 days as the company had agreed to significant restructuring. Specifically the oligarch’s holding in the company had been reduced below 50 per cent.
Sanctions would remain on Mr Deripaska individually, the administration stressed, but those on Rusal would be lifted.
But the Trump administration – and Irish and European officials – underestimated the reaction on Capitol Hill. The newly-elected House of Representatives, controlled by Democrats after the midterm elections, reacted with fury at the news. Accusing the Trump administration of going soft on Russia, it invoked a clause that was contained in the original legislation introducing the sanctions in April 2018 that allowed the US Congress to veto the move if it passed a joint resolution of disapproval.
Senior Democratic senators, such as Robert Menendez outlined Mr Deripaska's close ties to the Kremlin. Even Richard Neal, a long-time champion of Irish issues on Capitol Hill, could not be swayed, urging the US treasury to reimpose the sanctions.
Outraged Democrats argued that Mr Deripaska still essentially maintained control and influence over the company, as his ex-wife and father-in-law would hold shares.
Though the Irish and European representatives continued to outline the unintended economic consequences of the sanctions in Europe, US politicians and media seized on a different aspect of the Rusal sanctions story – Mr Deripaska's links with Vladimir Putin and with former Trump campaign manager Paul Manafort, a key figure of interest in the Robert Mueller probe into Russian interference in the 2016 election.
It emerged during the ongoing special counsel investigation that Mr Deripaska had previously loaned millions to Manafort, who is currently in jail as he awaits trial on dozens of counts relating to obstruction of justice, conspiracy, tax fraud, and failure to register as a foreign agent. In addition, the Russian billionaire financially supported Manafort when he began undertaking lobbying work in Ukraine in 2005 and 2006, though Mr Deripaska subsequently sought the repayment of $20 million (€17.5 million) from Manafort.
Leaked emails also show that Manafort offered Mr Deripaska "private briefings" with Mr Trump at the height of the presidential campaign via the intelligence operative Konstantin Kilimnik.
As the controversy over Mr Deripaska increased in recent months, his mansion in north-west Washington DC – a few blocks away from several embassies, including the Irish embassy – has garnered attention. The 2,136 sq m (23,000 sq ft) house with Italian marble floors was sold in 2006, but was recently revealed to have been bought by a company controlled by Mr Deripaska.
Trump adviser Kellyanne Conway lives next door, while Mr Ross and US treasury secretary Steve Mnuchin own houses nearby.
Visa trouble and sanctions means that Mr Deripaska hasn’t visited in a while: a black SUV is usually parked outside the property which is protected by private gates.
Ultimately the vote in the US senate to undo the treasury decision failed to secure sufficient support to pass, paving the way for the treasury to lift the sanctions last Sunday. However, in a measure of the unease many Republicans are feeling about the controversial sanctions decision, 11 Republicans voted with Democrats to oppose the motion.
While the US treasury has officially lifted the sanctions, the controversy over Mr Deripaska shows no sign of abating. Last week the New York Times ran a front-page story claiming that the oligarch and his allies may benefit from the restructuring deal agreed with the treasury, claiming that it is less punitive on Mr Deripaska than initially reported.
Citing a confidential document, it says the sanctions relief deal will allow Mr Deripaska to wipe out potentially hundreds of millions of dollars in debt by transferring some of his shares to a Russian government-owned bank.
It also points out that, through a combination of his own shares and those of his foundation, his ex-wife, his father-in-law and an entity called Orandy Capital, the oligarch will own nearly 57 per cent of EN+.
Focus has also turned to Mr Deripaska's links with a Belarusian woman Anastasia Vashukevich, who was jailed in Thailand last year on prostitution charges.
Ms Vashukevich, who describes herself as a “sex coach” and was pictured with Mr Deripaska on his yacht, claims to have incriminating information about Russia’s efforts to meddle in the 2016 presidential election involving Mr Deripaska. She was detained by Russian officials on arrival in Moscow this month following her release from Thailand, and put in jail. She was released from prison this week and told CNN she was warned by Russian officials not to talk publicly again about Mr Deripaska.
And in a further development this week, two Democratic senators have written to Mr Mnuchin seeking clarification about his links to a business part owned by Len Blavatnik, a major investor in Rusal who stands to benefit financially from the sanctions deal.
As the Mueller investigation shows signs that it may be close to completion, some Republicans too are getting worried. Senator Mike Rounds is among those who said they may take another look at the sanctions deal in light of the New York Times revelations. Many are also anxiously awaiting the publication of the Mueller report to see if Mr Deripaska is named.
For the company itself, EN+ has said that the treasury decision is a “victory for the US sanctions policy, successfully punishing the target but not at the expense of shareholders, employees and the wider market”. It also notes that two-thirds of the board is now controlled by independent directors and two-thirds of the company’s shares are controlled by minority shareholders and independent US trustees.
Although the lifting of the sanctions last weekend is an undoubted diplomatic victory for European negotiators, Ireland and other countries may find that they are on the wrong side of history as the ongoing controversy over Mr Deripaska plays out.
In a carefully-worded statement issued by the Department of Foreign Affairs on Sunday night, Tánaiste and Minister for Foreign Affairs Simon Coveney said Ireland shares the view that "unacceptable actions by the Russian regime, and those connected to it, should not go unpunished," adding: "At the same time, we have been determined that legitimate measures taken by the US authorities do not cause inadvertent damage to Irish companies like Aughinish Alumina."
While Europe and Moscow may be welcoming the outcome of the Rusal sanctions decision, the decision by the Trump administration to waive sanctions on Rusal has left many in the US scratching their heads.
As Michael McFaul, the former US ambassador to Russia said on twitter. “Lifting of these sanctions was a big win for Putin and Deripaska. And what did we – the American people – get in return? Nothing.”
