Controversial Russian company considers move from Jersey

Monday 20 August 2018

A US sanctions-hit aluminium company linked to a controversial billionaire Russian oligarch accused of extortion and implicated in a murder is considering moving its financial centre away from Jersey.

Rusal – the world’s second largest aluminium provider headquartered in Moscow - is currently incorporated in Jersey.

But the company’s board is now looking to re-domicile to Russia, and is awaiting shareholder approval to make the move official. 

If it gets the go-ahead, the company will instead be registered in one of two special administrative regions created by Russia where companies can enjoy tax benefits similar to those of offshore jurisdictions.

Rusal had previously been used as an example in a Jersey Finance brochure used to promote Jersey’s links with Russia. It is, however, unknown at this stage what its departure could mean for the island.

Pictured: Rusal was featured in a Jersey Finance brochure published in 2014.

The decision comes in the midst of a period of significant hardship for Rusal, which has seen its value steadily plummet over the past four months. 

Its controller, Kremlin-linked oligarch Oleg Deripaska, and his eight companies were blacklisted by the US Treasury in April in response to alleged Russian meddling in the 2016 US Presidential election. 

Three of those firms – Rusal, management company Basic Element Limited and energy company EN+ – are based in Jersey.

Explaining the sanctions at the time, the US Treasury linked Mr Deripaska - once Russia’s richest man worth $28billion prior to the financial 2007 financial crash – with allegations of money laundering, “threatening the lives of business rivals”, and interfering in elections.

They added that there were also claims he had “bribed a government official, ordered the murder of a businessman, and had links to a Russian organised crime group.” 

Mr Deripaska left Rusal’s board one month later in response to the sanctions, but remains owner of EN+, which holds controlling interest in Rusal.

In a statement, Rusal’s board described a domicile change away from Jersey as “in the best interests of the company and its shareholders as a whole.”