The Australian government has imposed sanctions on two Russian oligarchs who have assets in the country, after facing questions about why they were omitted from an earlier round of economic measures triggered by Russia’s invasion of Ukraine.
Oleg Deripaska, who has a stake in an alumina refinery in Gladstone, Queensland, run by Rio Tinto, and Viktor Vekselberg, who has an interest in a gas project in the Beetaloo basin in the Northern Territory, were not among 41 oligarchs and family members hit with sanctions by Australia’s Department of Foreign Affairs and Trade on Monday.
Friday’s move left Rio Tinto and Origin scrambling to understand their legal obligations, as the sanctions do not include the corporate vehicles through which the oligarchs hold their interests in the Australian assets.
The head of Ukraine’s embassy in Canberra, Volodymyr Shalkivskiy, said on Wednesday: “We hope that those Russian oligarchs will be included in the next round of sanctions.”
Deripaska and Vekselberg were among oligarchs sanctioned by the US in 2018 for reasons including Russia’s invasion of Crimea in 2014, and last week the UK government included Deripaska among seven influential business figures who have had sanctions imposed on them over the war in Ukraine.
The Australian government had not ruled out further expanding sanctions to include the pair, but has always insisted it would not speculate on potential targets.
An update to Australia’s consolidated sanctions list, published on Friday, shows Deripaska and Vekselberg have been added.
In a statement, Origin said: “Clarification is being sought from the Australian Department of Foreign Affairs and Trade on any implications of the sanctions for Origin.”
“Origin reiterates that it is appalled by the Russian invasion of Ukraine and will comply with all Australian rules and laws.”
Rio Tinto declined to comment.
Both Deripaska and Vekselberg are banned from travelling to Australia and also face “targeted financial sanctions”.
This includes a ban on “directly or indirectly making an asset available to, or for the benefit of, a designated person or entity, other than as authorised by a permit”, the government’s explanatory notes say. The impact of that provision remains unclear.
In addition, several Russian banking entities and the country’s ministry of finance were added to the Australian sanctions list on Friday.
These include Russia’s biggest bank, Sberbank, where Australian super funds have held shares.
Australia’s biggest fund, AustralianSuper, formerly held $140m worth of Sberbank shares - almost half its $300m portfolio of Russian stocks.
However, the fund has been selling Russian stocks since June last year, reducing its total holdings to between $175m and $180m.
Sberbank’s London-listed securities, which traded at more than US$17 in June last year, are now all but worthless after UK and European sanctions against Russia destroyed its European business. They last changed hands at US5c.
AustralianSuper has been contacted for comment.
As Guardian Australia has previously reported, Vekselberg has an interest in an exploration project in the Beetaloo basin – touted by Scott Morrison’s government as a key part of a gas-led recovery from the Covid crisis – through his shareholding in a London-listed company, Falcon Oil & Gas.
Falcon is the junior partner in a joint venture to explore gas tenements with Australia’s Origin Energy.
Vekselberg’s representative on the Falcon board, Maxim Mayorets, stepped down on 1 March. At the time, Origin said it had raised concerns about Vekselberg’s 16% stake in Falcon with the company.
The EN+ Group, a company founded by Deripaska, owns 20% of Queensland Alumina Ltd (QAL), which operates a plant in Gladstone that refines bauxite into alumina. The remainder of the shares are owned by Rio Tinto.
Deripaska formerly controlled EN+, but after he was hit with sanctions by the US in 2018 he reduced his stake to 45% so that it was not captured by the measures against him.
Rio Tinto and an EN+ subsidiary, Rusal, pay QAL to refine the bauxite in proportion to their ownership of the plant. Rusal also buys its share of the bauxite refined by QAL from Rio. In addition, the partners provide debt finance to QAL, also in proportion to their ownership, and in return receive interest payments from the refinery.
The federal government is also considering sanctions against the military junta in Myanmar, more than a year after it seized power in a bloody coup – a delay that has frustrated community figures in Australia.
Foreign affairs department officials last month consulted community and aid groups about proposals that would allow it to impose sanctions on members of the junta, their families and the state-owned enterprises that help to finance the regime.
A fortnight ago the government put the new regulations in place, allowing it additional options for sanctions targeting the junta and its interests.
“As far as I know, the minister of foreign affairs and Dfat are reviewing the sanctions,” said Tun Aung Shwe, the representative in Australia of the National Unity Government (NUG) – a government-in-exile formed after last February’s coup.
“I do think they are now preparing but I haven’t heard about the extent of any sanctions,” he said.
He said he had consistently advocated for targeted sanctions against the junta on behalf of the NUG since being appointed its Australian representative in July last year and was frustrated by the lack of progress.
“Then when I saw the Australian government’s response to the crisis in Ukraine, overnight the Australian government imposed targeted sanctions on the Putin regime,” he said.
“Why not for Myanmar?”
