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Rusal Asks Aluminum Clients to Stop Payment After Sanctions

Rolls of steel sit in storage ahead of shipping at the Salzgitter AG plant in Salzgitter, Germany, on Thursday, March 22, 2018. The European Union believes it's on track to be exempted from imminent U.S. tariffs on foreign steel and aluminum, dialing down the risk of a trans-Atlantic trade war.

(bloomberg)

(Bloomberg) -- United Co. Rusal asked its customers to stop payments after it was placed under U.S. sanctions.

The aluminum producer is investigating the consequences of the sanctions and doesn’t waive its right to the payments, according to a copy of a letter dated April 6 and signed by Rusal’s Head of Marketing Steve Hodgson. His division handles international sales, which account for about 80 percent of the company’s business.

“We request that you immediately withhold all payments and remittances to UC Rusal until further notice,” the company said in the letter. “We are working intensively to ensure continuity of our business.”

Rusal was among Russian companies included in a list that the U.S. hit with sanctions on Friday that were intended to punish the country for actions in Crimea, Ukraine and Syria, and attempting to subvert Western democracies.

U.S. operations of sanctioned companies are now frozen and Americans mostly barred from dealing with them, while others outside the U.S. will be punished for carrying out significant transactions with the businesses.

Rusal shares fell 50 percent to HK$2.32 on Monday, according to pricing from the Hong Kong Exchanges & Clearing Ltd. website. Aluminum prices jumped the most since 2015, climbing 4.4 percent to $2,131 a metric ton as of 1:24 p.m. in London.

To contact the reporters on this story: Jack Farchy in London at jfarchy@bloomberg.net, Yuliya Fedorinova in Moscow at yfedorinova@bloomberg.net.

To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Nicholas Larkin

©2018 Bloomberg L.P.

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