UK imposes sanctions on steel company Evraz, linked to Roman Abramovich | Evraz
The British government has imposed sanctions on Evraz, the multinational steel company partly owned by billionaire Roman Abramovich that was once among Britain’s biggest companies.
The Foreign Ministry said Thursday that Evraz “operated in sectors of strategic importance to the Russian government” and that the action would “further diminish Putin’s financial reserves and siege economy, and support continued resistance.” of Ukraine”.
Evraz’s head office is in the Mayfair district of London, but it has extensive mining and steel operations in Russia, with more than 70,000 employees.
The UK and its allies, including the US and EU, have used sanctions against Russian companies and businessmen as one of the main tools in responding to the invasion of Ukraine.
Evraz’s measure is believed to be the first time a former member of the FTSE 100 has faced sanctions. It completes the fall from grace of a business that was valued at over £5billion as recently as January.
Its membership in the index meant that the company’s shares were held by a wide variety of investors managing retirement funds, including BlackRock, Schroders Investment Management, Vanguard and Legal & General.
Shares in Evraz were suspended from trading on the London Stock Exchange in March after the UK government highlighted its alleged strategic importance to Russia when imposing sanctions on Abramovich, who owns a 29% stake in the society. Its board of directors also resigned after the sanctions against Abramovich.
The government had, in Abramovich’s sanctions designation, alleged that Evraz “potentially supplied steel to the Russian military that could have been used in the production of tanks.” That charge, which was strenuously denied by Evraz, was not included in the company’s sanctions designation on Thursday.
In a statement in March, Evraz said he did not expect the company itself to be hit with sanctions because Abramovich did not have “effective control.” He also denied that his steel was used to build Russian tanks, saying he only supplied steel to “the infrastructure and construction sectors”.
However, Evraz signed a five-year contract in 2012 to supply railway wheels and “metal” to UralVagonZavod, a Russian company that is the world’s largest battle tank manufacturer and manufactures T-72s. and T-90s, both in service in Ukraine. today. A person familiar with the contracts said they contained provisions limiting them to civilian use only.
A spokesman for Evraz said: “Russia supplies long steel to the infrastructure and construction sectors for civilian purposes only.”
In its Thursday announcement, the Foreign Office said: “Evraz plc produces 28% of all Russian railway wheels and 97% of railway tracks in Russia. This is vitally important as Russia uses rail to transport key military supplies and troops to the frontline in Ukraine.
He added that the new sanctions would “further deter companies operating in strategic sectors in Russia”.
Sanctions include an asset freeze, which means no UK citizen or company can do business with the company. However, UK sanctions guidelines suggest that companies subject to sanctions are generally allowed to pay employees and cover other “basic needs” such as rent, utilities or property management costs.