Glencore's Payments to Sanctioned Ex-Partner May Be a Model

(Bloomberg) -- Glencore Plc, the world’s biggest commodities trader, is challenging the U.S. sanctions regime. Some big players will be watching.

While the company said it’s resuming payments to Dan Gertler, its longtime partner in Democratic Republic of Congo, still under U.S. financial sanctions, Glencore says it will avoid falling foul of U.S. authorities by not using dollars or U.S. banks.

Another Glencore partner will want to know how this strategy plays out. In April, the U.S. imposed sanctions on Russian billionaire Oleg Deripaska who was forced to start divesting from his companies United Co. Rusal and En+ Group Plc. If Glencore can find a work-around, he may reconsider his options.

Meantime, European governments are still trying to figure out what kind of business their companies can do with Iran, since U.S President Donald Trump canceled the nuclear deal.

For Glencore, however, it’s not entirely virgin territory. In 2016, it participated in a 10.5 billion-euro ($12 billion) purchase of a stake in Russian energy giant Rosneft PJSC. The sanctions didn’t explicitly prohibit such a deal, but the mood music wasn’t the best.

Now, if Glencore is able to find a bank willing to process its payments to Gertler, other customers may be knocking on its door.

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