(Bloomberg) -- The U.S. extended the deadline for cutting ties with companies controlled by Russian billionaire Oleg Deripaska until just after midterm elections, delaying a clash with Congress over the handling of sanctions against Russia.
The department announced the extension Friday, citing a potential change in control of United Co. Rusal and En+ Group Plc.
The companies have approached the U.S. about “substantial corporate governance changes that could potentially result in significant changes in control,” a Treasury spokesperson said in a press release without being identified. “To allow sufficient time for review, we are extending these licenses until November 12.”
U.S. sanctions against Deripaska, Rusal’s billionaire owner, have frozen the Russian aluminum giant -- the world’s top producer of the metal outside China -- out of annual contract negotiations taking place this month. The penalties threaten to disrupt supply chains for parts critical to the automotive and aerospace industries.
The Treasury last week allowed customers to negotiate some new contracts, as long as they are consistent with their dealings with the Russian company before the sanctions were imposed in April.
United Co. Rusal accounts for about 12 percent of all primary demand in the U.S., according to the Aluminum Association. Aluminum buyers in the U.S. initially raced to find replacement units when the U.S. first announced sanctions against Deripaska in April.
To contact the reporters on this story: Saleha Mohsin in Washington at smohsin2@bloomberg.net;Joe Deaux in New York at jdeaux@bloomberg.net
To contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Mike Dorning, Joshua Gallu
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