LME Analysis of RUSAL Sanctions

SEATTLE (Scrap Monster): The LME acknowledges that the Sanctions have caused concern in the market.

Firstly, the LME recognises that certain Members have raised concerns as to how to settle LME Contracts with sanctioned persons. While it is for Members to determine how to settle Contracts with sanctioned persons, the LME is willing to work with Members to explore appropriate solutions as far as possible. Members who would like to discuss particular concerns are invited to contact the Exchange.

Secondly, the LME recognises that certain Members and Clients are concerned that, if they were (in the course of settlement of an LME Contract) to take delivery of LME Warrants relating to metal of Rusal Brands, this could place them at risk of violating the Sanctions. In particular, the LME understands, from its informal discussions with stakeholders thus far, that market participants are generally comfortable that dealing in Warrants of Rusal Brands relating to metal which has been produced and supplied by Rusal prior to 6 April 2018 would not constitute a Sanctions risk, provided that:

(a)    such dealings do not involve any blocked persons (as defined in the Sanctions) directly or indirectly;

(b)   (b) the metal was produced and supplied by Rusal prior to 6 April 2018 and Rusal no longer had any property interest in the metal after that date; and

(c)    (c) neither Rusal nor any blocked persons (as defined in the Sanctions) would contribute or receive funds, goods or services in connection with any dealings in the metal.

However, certain market participants have concerns that dealing in Warrants of Rusal Brands relating to metal which has been produced and supplied by Rusal on or after 6 April 2018 may constitute a Sanctions risk.

Courtesy: www.lme.com