Oleg Deripaska, a Russian aluminum magnate and one-time business partner of Paul Manafort, was once thought to be worth over $5 billion; but that was before the most recent round of sanctions – before, that is, Deripaska was included among the Newly-Sanctioned Russians.  

Most of Oleg’s fellows in that camp are not particularly worried about primary sanctions, because most of them don’t hold significant assets in the US of the kind that can be frozen by primary sanctions.  Deripaska may be different, however, because he is thought to be the mystery man who paid $15 million for a mansion near Washington’s Embassy Row, next door to Kellyanne Conway. If he does own that piece of real estate, he can’t pull his money out of it because it’s frozen.

But $15 million is chump change compared to what Deripaska stands to lose from the bite of the newly-imposed secondary sanctions.  The core of his fortune is a Russian aluminum company called Rusal. Upon news of the sanctions, Rusal’s stock price dropped by 50 percent.  Why? Say for example that Rusal wants to sell aluminum to a customer in Germany. As a practical matter, that sale will have to be facilitated in some way by a German or other non-Russian bank.  Secondary sanctions allow the Treasury Department to put such a “facilitating” bank on a list of firms with which US banks may not do business. Unable to function without access to US financial markets, those German or other non-Russian banks will have no choice but to stop working with Rusal; and Rusal’s export business collapses overnight.

Powerful stuff, those secondary sanctions.  Indeed, it was secondary sanctions that brought Iran to the nuclear bargaining table.  It will be a shame if President Trump guts them.