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said. The Eurobond was issued in December 2013 by Ukraine on the Irish exchange and bought by Russia as the first part of a $15bn aid package. The other issues were abandoned following Yanukovych’s ouster during the Euromaidan protests a few months later and Ukraine has since defaulted on the bond payments. In March 2017, the High Court of London ruled to reject all Ukraine’s defence arguments. The Russian side demands the immediate repayment of the debt that matured in December 2015. The two-year Eurobond was fully purchased by a Russian state fund and it was the only major debt that the Ukrainian government was not able to restructure in 2015.
The US Department of Treasury (USDT) softened the sanctions on Russian aluminium major Rusal without lifting them and has allowed the world's second-largest metal producer to negotiate new contracts. Previously Bloomberg warned of instability on the aluminium market as Rusal, that cannot sign new contracts under the sanctions, was excluded from the major industry negotiations event at the Metal Bulletin aluminium conference in Berlin. However, on September 14 the USDT authorised "maintenance" of pre-existing contracts and the signing of new contracts that are consistent with those closed prior to the sanctions. "Transactions and activities that are not within the framework of a pre-existing agreement may be considered ‘maintenance’ if such activity is consistent with the transaction history between the person and the blocked entity prior to April 6, 2018," the Treasury said. Bloomberg reminded that the extension will give Rusal some air as many aluminium consumers have quarterly or annual contracts expiring soon. However, the company still remains under a sanctions regime. Rusal and other businesses of Russian billionaire and Kremlin insider Oleg Deripaska were sanctioned by the US Treasury in April, but the initial deadlines for cutting ties with the company were extended several times after sanctioned sent shockwaves through global aluminium supply chains. Previous reports indicated that Deripaska’s En+ and Rusal could be getting closer to striking a deal with the US Treasury Department to suspend or even lift the sanctions in effect since April 2018. However, the most recent wave of sanction pressure could have even this latest easing postponed. Unnamed sources told Reuters that Rusal's financials will face "further deterioration" should it fail to reach a deal with USTD by the end of August. In the meantime, as a plan B, the company reportedly is preparing to re-register in in Russian Special Administrative Districts (SARs) , a domestic offshore zone the Russian government introduced in August on Russky and Oktyabrskiy islands. Government support measures are also being prepared for domestic aluminium consumption .
In the regional elections the United Russia party could face difficulties in several territories . The party could lose majority in the Irkutsk regional parliament, Ulyanovsk region (beaten by Communist party with 34% versus 27% and 37% versus 32%, respectively), while winning only by a thin margin in Zabaykalye region. This is the first time United Russia has lost regional elections in 10 years.
The US President Donald Trump on September 12 signed an executive order allowing sanctions on foreign nationals and companies for meddling in the upcoming mid-term elections of November 6, with the possible measures blocking credit by the US banks, asset freeze and banning US investment. The move will add to the mounting sanction pressure on Russia, in the past two months weighting heavily on Russian assets and already
25 RUSSIA Country Report October 2018 www.intellinews.com