By Brian Blackstone in Zurich and Ann Simmons in Moscow 

The World Economic Forum said Sunday that sanctioned Russian businessmen may attend January's Davos event, after Moscow threatened to boycott the annual gathering of the business and political elite.

The decision fends off a dispute that risked overshadowing the event that attracts a who's who from governments, finance ministries and businesses around the world. Last year's conference included President Trump and a large U.S. delegation. The summit is supposed to be a largely nonpolitical gathering at which topics related to the global economy are discussed.

Russian aluminum magnate Oleg Deripaska, construction billionaire Viktor Vekselberg and banker Andrey Kostin had been asked not to attend the prestigious economic gathering to avoid problems with American delegates, according to Russian officials. In response, Russian Prime Minister Dmitry Medvedev said Moscow would boycott the high-profile event unless the organizers reneged on their decision to block the tycoons from attending.

On Sunday, Alois Zwinggi, head of compliance at WEF, said the organization was pleased that Russia would "send a high-level government delegation to Davos."

"Should the delegation include individuals under sanction, all necessary measures have been undertaken to ensure that their presence would be fully compliant with current legal conditions," he said.

There was no immediate response to The Wall Street Journal's requests for clarification over what was meant by the sanctioned men being "fully compliant."

This came after Russian state news agency RIA Novisti cited a government source on Saturday as saying that an official delegation would now take part in the forum, and that "the level of the delegation and its composition will be decided later."

There was no immediate response from the Kremlin or Russian legislators regarding the decision to allow Messrs. Deripaska, Vekselberg and Kostin to attend. It was unclear whether the blacklisted businessmen would attend now they have the all clear.

All three have previously been regular attendees. Mr. Deripaska had been known for hosting lavish parties at the forum intended to showcase Russia's financial success and openness for business despite Western restrictions that have increased animosity with the U.S. and the European Union.

The U.S. blacklisted the men along with about three dozen others in April in response to Russian meddling in American elections, cyberattacks on critical U.S. infrastructure, the Kremlin's military intervention in Ukraine and its supplying of bombs to the regime of Syrian President Bashar al-Assad.

Mr. Kostin told Russian state media in November that if the issue over his attendance wasn't settled, the state-owned bank of which he is chief executive, VTB, wouldn't send a delegation.

The absence of an official Russian delegation from Davos would have been largely symbolic for Moscow, which is intent on showcasing a united front with its oligarchs and its indifference to Western sanctions, threats by the U.S. to pull out of the Cold War-era missiles treaty and snubs to its business elite.

Mr. Putin is courting friends outside Europe, in Asia and the oil-rich Arab world, and has demonstrated his readiness to forge ahead with joint ventures and development projects there.

In November, Mr. Putin told the official Russian news agency TASS that the Davos forum would lose out by barring the attendance of Russian businessmen and that by doing so the organizers were essentially "shooting themselves in the foot."

Such venues were intended to bring people together "outside of any political restrictions," Mr. Putin said.

The Russian president later told TASS that businessmen and companies could decide themselves whether to participate in the event.

Mr. Putin also insisted that if Russia were to skip the Davos gathering, it wouldn't affect Russia's authority in the global economy, TASS reported. In an effort to push the Kremlin's narrative that U.S. sanctions are have little impact, Mr. Putin has continued to insist that his country's economy is holding strong and missing out on Davos definitely would "not affect Russia's prestige in the global economy."

The Russian president told the news agency that the authority of any country in the global economy depends primarily on the economic power of the state, the structure of its economy and macroeconomic indicators.

"In this regard, I can say that, in general, we are achieving goals that we set for ourselves and feel confident," Mr. Putin was quoted as saying.

The Russian president isn't expected to attend January's forum. Although he has described the gathering as a good platform, he told TASS in November "I virtually never go there."

He last attended in 2011. Prime Minister Medvedev stopped attending the gathering after 2013.

Write to Brian Blackstone at brian.blackstone@wsj.com and Ann Simmons at ann.simmons@wsj.com

(END) Dow Jones Newswires

December 16, 2018 10:25 ET (15:25 GMT)

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