An investigation by Swedish tax authorities that concluded sanctioned Russian oligarch Oleg Deripaska maintains control of Aughinish Alumina parent company Rusal was based on “presumptions rather than proof”, lawyers for the company have said.
Documents obtained by The Irish Times reveal behind-the-scenes efforts by Rusal to push back against possible restrictions on the Russian-owned group, which includes the Co Limerick refinery, the Kubal smelting facility in Sweden and several smelters in Russia.
A legal firm representing Rusal’s Swedish arm argued that stopping shipments of aluminium from Kubal would lead to “imminent and irreparable” economic harm. Similar to Aughinish Alumina, the operation of the Swedish smelting facility has come under significant political focus in recent months.
A ruling from Skatteverket, Sweden’s tax authority, concluded that the Rusal group remains under the control of Deripaska, a figure previously described as “Putin’s favourite oligarch”, who is subject to EU sanctions.
The US imposed sanctions on Deripaska in 2018. A subsequent deal saw the oligarch agree to reduce his stake in energy conglomerate EN+, which owns Rusal, to prevent the company and Aughinish from being economically blacklisted.
The recent Swedish investigation concluded that Deripaska in fact still owns 53.7 per cent of EN+, and as such Rusal, Kubal and Aughinish should be subject to sanctions.
In a May 12th letter, Boies Schiller Flexner, a US law firm founded by legal heavyweight David Boies, told Sweden’s foreign minister Maria Malmer Stenergard that the tax authority’s decision rested “on presumptions rather than proof”.
Rusal’s ownership arrangements had severed “control” from any sanctioned person and those “safeguards” had been accepted by Swedish courts in 2022, the correspondence said.
Kubal had “no reason to believe” there had been any breaches of the deal negotiated with US authorities to remove Deripaska’s controlling position in the group. The company lodged an appeal against the tax authority’s ruling in June, arguing it failed to prove the oligarch owned at least half of EN+.
The outcome of the legal battle in Sweden could have big implications for Rusal’s operations inside the EU.
The European Commission is separately considering whether to propose targeting Aughinish Alumina’s exports to Russia in the next round of EU sanctions on Moscow this autumn.
Exports of alumina from Aughinish significantly increased in the years following the 2022 invasion of Ukraine, leading to concern the material is ultimately fuelling Russia’s war effort.
Kubal relies on alumina from Aughinish, which it then smelts into aluminium to sell.
A letter to Stenergard from Kathleen Shannon, a partner in Boies Schiller Flexner, warned shuttering the Swedish facility would result in the loss of 2,500 direct and indirect jobs.
Boies stepped back as chairman of the legal firm in late 2024 following controversies over aggressive tactics employed when representing Harvey Weinstein and fraudulent blood-testing start-up Theranos.
