In the letter Treasury issued Wednesday, it said it was revising its view “based on information we did not have at the time the report was submitted to Congress.”

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Gapontsev has said that he never belonged on the list and that he had feared that Congress might use the list as a tool for applying pressure on the Kremlin. He said that unlike the Russian oligarchs, he built his company over three decades based on its advanced laser technology, not Kremlin connections.

Under sanctions law, targets could be banned from entering the United States, and their assets could be frozen. Some lawmakers in 2018 quickly launched a letter-writing initiative aimed at getting financial institutions to identify the assets of people on the list as a way to make banks skittish about doing business with them.

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Treasury wouldn’t budge on the listing, however, and Gapontsev filed suit in federal court Dec. 3, 2018.

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The Treasury said in a settlement Wednesday that Gapontsev did not belong on the list under Section 241 of the Countering America’s Adversaries Through Sanctions Act. It said that it was “of the opinion that, if it had to create the unclassified report today, Dr. Valentin Gapontsev would not be listed among oligarchs in the Russian Federation.”

The CAATSA legislation was passed by overwhelming margins in Congress on Aug. 2, 2017, in a rare show of bipartisanship. The measure demanded both classified and unclassified lists of “the most significant senior foreign political figures and oligarchs in the Russian Federation, as determined by their closeness to the Russian regime and their net worth.”

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“Ever since the Treasury Department issued the 2018 CAATSA report to Congress, we have asserted that it was wrong in declaring Dr. Gapontsev to be a Russian oligarch. We are pleased that the Treasury has finally admitted this much in its letter,” Angelo Lopresti, IPG Photonics’ general counsel, said in a statement.

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Gapontsev earned his doctorate and worked at the Moscow Institute of Physics and Technology. In 1990, at age 51, he started IPG Photonics, which produces high-power fiber-optic lasers for telecommunications and cutting materials. He also opened facilities in Burbach, Germany.

But he soon moved the firm to the United States, then his biggest market. BellSouth was one of his main customers. He raised $100 million of private-equity investments from U.S. firms.

“During a court hearing, the U.S. Government conceded that the U.S. Treasury based its unclassified CAATSA oligarch report entirely on a list taken from a 2017 Forbes Magazine article,” Lopresti added.