On April 12, 2024, U.S. and UK authorities announced a joint action to issue new prohibitions aimed at disrupting Russia’s ability to earn revenue from the export of aluminum, copper, and nickel. The new prohibitions are in line with a February 24, 2024 G7 Leaders’ Statement regarding efforts to reduce Russia’s revenues from metals. According to the U.S. Department of Treasury, the new action “prohibits the import of Russian-origin aluminum, copper, and nickel into the United States and limits the use of Russian-origin aluminum, copper, and nickel on global metal exchanges and in over-the-counter derivatives trading.” According to the UK government, the prohibitions block Russian metal producers from earning profits from the London Metal Exchange and the Chicago Mercantile Exchange to target Russian exports of aluminum, copper and nickel worth $40 billion.
To implement the new policy, the U.S. Treasury Department issued two determinations related to Russian-origin aluminum, copper, or nickel produced on or after April 13, 2024. The first determination was issued pursuant to Executive Order 14068, which prohibits the import of Russian-origin aluminum, copper, and nickel. The second determination, issued pursuant to Executive Order 14071, prohibits certain services for the acquisition of Russian-origin aluminum, copper, or nickel, including warranting services for these metals on a global metal exchange and services intended to acquire these metals as part of the physical settlement of a derivative contract. The U.S. Treasury Department also issued five new Frequently Asked Questions (FAQs 1168 – 1172) to clarify the purposes for the determinations and their respective prohibitions.
On April 12, 2024, the United Kingdom also implemented its new policy by amending the Trade License for acquisition of metals, which was issued under regulation 64 of the Russia (Sanction)(EU Exit) Regulations 2019. In the United Kingdom, the import of Russian metals, including aluminum, copper and nickel, has been banned since December 2023. However, the Trade License was recently amended to: 1) prevent UK persons from acquiring Russian-origin metals on a global metal exchange on warrants issued on or after April 12, 2024 and 2) allow UK persons to take physical delivery, outside of the UK, of Russian-origin metals on a global metal exchange that were under warrant before April 12, 2024. With regards to warrants that were in place before April 12, 2024, the amendment enables these metals to be taken off warrant, moved for delivery outside of the UK, and subsequently re-warranted on a global metal exchange.
U.S. Department of Treasury Press Release | Determination Pursuant to Section 1(a)(ii) of EO 14711 | Determination Pursuant to Section 1(a)(i)(A) of EO 14068 | FAQs 1168 – 1172 | UK Government Press Release | Notice – Trade License for acquisition of metals