EU’s Sanctions and Belarus’s Counter-Sanctions (as of 4 August 2023)

BACKGROUNDER No. 18 / 04.08.2023

Yauheni Preiherman

 

Even throughout the normalization period between Belarus and the EU in 2016–2020, the EU’s minimum sanctions regime against Minsk remained effective. Restrictive measures included an arms embargo, a ban on the export of goods for internal repression, as well as individual sanctions against four Belarusian citizens listed in connection with the unresolved political disappearances in 1999 and in 2000. Since the 2020 presidential election, Brussels has already adopted six packages of restrictive measures. Once the Russia–Ukraine war broke out, the sanctions–counter-sanctions trend reached an all-new scale.

1st package: October 2020

On 1 October 2020, the European Council called on the Belarusian authorities to “end violence and repression, release all detainees and political prisoners, respect media freedom and civil society, and start an inclusive national dialogue.” To compel Minsk to take appropriate steps, the EU leaders instructed the Council to adopt restrictive measures. The decision was formalized on the following day, 2 October, and implied individual restrictions (a ban on travel to the EU, an asset freeze in the EU, as well as a prohibition for EU citizens and companies to make funds available to those listed) against 40 citizens of Belarus. Those individuals were identified as responsible for “repression and intimidation against peaceful demonstrators, opposition members and journalists in the wake of the 2020 presidential election, as well as for misconduct of the electoral process.” However, the top leadership of Belarus was not listed.

On the same day, Minsk announced a list of counter-sanctions against EU officials, while stressing that “the single list of banned people also applies to the framework of integration associations, of which Belarus is a member.” However, Belarus declined to publish its list, citing the “established civilized diplomatic practice.” Minsk also recalled its ambassadors to Warsaw and Vilnius for consultations, suggesting that Poland and Lithuania follow suit, and demanded that these two countries reduce the number of diplomatic staff in Minsk. Furthermore, all contacts between the EU diplomats and the Belarusian government agencies were transferred exclusively to the Ministry of Foreign Affairs.

2nd package: November 2020

On 6 November, the EU Council expanded the list of Belarusian citizens subject to individual restrictions by adding 15 people. The inclusion of Aliaksandr Lukashenka made the second package of sanctions stand out.

On 17 November, Minsk announced its countermeasures:

• Equivalent additions to the list of counter-sanctions for each of the EU countries, with listed individuals banned from entering not only Belarus, but also the Union State of Belarus and Russia;
• Downgrading to the expert level of the country’s participation in the Eastern Partnership;
• Suspension of the EU–Belarus Coordination Group and the Human Rights Dialogue “until the EU decides to amend the policies of the European Bank for Reconstruction and Development and the European Investment Bank, which at that stage decided to freeze their cooperation programmes with Belarus.”

3rd Package: December 2020

On 17 December, the EU Council imposed a third round of restrictive measures against another 27 Belarusian individuals and seven companies. The latter were subject to an asset “freeze” and a ban on receiving funds from the EU citizens and companies. The list targeted high-ranking officials, as well as “economic actors, prominent businessmen and companies benefiting from and/or supporting the regime of Aliaksandr Lukashenka.”

As before, it was stressed that the purpose of those sanctions was to “put pressure on the Belarusian political leadership to prevent further violence and repression, to release all political prisoners and other unjustly detained people, and to initiate a genuine and inclusive national dialogue with broader society.”

In response, Minsk announced an expansion of its own list of personae non gratae in the EU and its intention to undertake “a number of legal actions.” Furthermore, a “decision was made to restrict the operation of a number of political foundations in the Republic of Belarus, as well as to review the implementation of a number of so-called humanitarian, educational and cultural programmes, which are pursued by relevant political institutions in Belarus, including those operating under the auspices of foreign embassies.”

4th Package: Ryanair Incident

As early as 24 May, the day after the incident with the Ryanair plane in Belarusian airspace, the European Council formulated its unambiguous political position to approve a significant increase in restrictive measures against Belarus, including the imposition of economic sanctions. In addition, the Council urged the EU aviation authorities and companies to avoid overflight of Belarus and ban overflight of EU airspace by Belarusian airlines and prevent access to EU airports of flights operated by such airlines.

On 21 June, the EU adopted the 4th package of sanctions against Belarus to add 78 individuals and eight entities, bringing the total up to 166 and 15, respectively. Later, on 24 June, the EU published a new decision concerning restrictive measures, which were referred to as “sectoral sanctions” in the media, although the decision itself identified them as “further targeted economic sanctions”:

• Prohibition of the sale, supply, transfer or export of equipment, technology or software intended primarily for use in the monitoring or interception of the internet and of telephone communications, as well as dual-use items that can be used for military purposes and by listed persons, entities or bodies in Belarus;
• Further trade restrictions concerning petroleum products, potassium chloride and goods used for the production or manufacturing of tobacco products;
• Restrictions on access to the EU capital markets; prohibition on the provision of insurance and re-insurance to the Belarusian government and Belarusian public bodies and agencies;
• Cessation of payments by the European Investment Bank under current agreements within the framework of public sector projects and technical assistance contracts in force;
• Decision that the EU member states should take actions in order to limit the involvement in Belarus of multilateral development banks of which they are members.

However, the impact of the decisions concerning oil refining and the potash sector was essentially postponed until the expiry of earlier contracts. Moreover, the sanctions did not apply to all of Belarus’s key exports of potash fertilizers and oil products.

On 28 June, Minsk reciprocated with a package of counter-sanctions as follows:

• Suspended its involvement in the Eastern Partnership;
• Launched the procedure for suspending the readmission agreement with the EU;
• Recalled Belarus’s permanent representative to the EU for consultations;
• Suggested that the EU ambassador to Belarus leave for Brussels for consultations;
• Banned entry to Belarus for representatives of the EU structures and member states who had contributed to the imposition of the restrictions.

5th Package: Migrant Crisis

In August 2021, a migrant crisis began to unfold on the Belarus–European Union border. Following its escalation in autumn the EU Council on 15 November broadened the listing criteria for the application of restrictive measures against Belarusian entities and individuals. The decision allows targeting individuals and entities “organizing or contributing to activities by the Lukashenka regime that facilitate illegal crossing of the EU’s external borders.” It was also decided to suspend the visa facilitation agreement for Belarusian officials. On 2 December, the EU adopted the 5th package of restrictions against Belarus “over continued human rights abuses and the instrumentalization of migrants.” It expanded the sanctions list by adding 17 individuals and 11 entities. Specifically, the new measures affected Belavia Airlines, several hotels and tour operators.

On 6 December, Minsk imposed its own package of economic sanctions against the EU member states (and nine other states) “in response to illegal external sanctions pressure aimed at undermining the sovereignty of Belarus and the welfare of Belarusian citizens.” Minsk introduced a ban on the import of a number of food products and equivalent restrictions for airlines, as well as expanded the list of persons who would be denied entry in Belarus and the Union State. In addition, the Belarusian Foreign Ministry said that “a number of other non-public steps will be taken,” whereas integration processes within the Union State and the Eurasian Economic Union and collaboration with the countries of the “Far Arc” would be expedited to strengthen the country’s economic security.

Lithuania and the “Technical” Amendment

Early 2022 saw a new round of the sanctions–countersanctions spiral associated with Lithuania’s decision to halt the transit of Belarusian potash fertilizers through its territory starting 1 February. Minsk accused Vilnius of violating its obligations under bilateral and multilateral agreements and voiced its intention to file a lawsuit. In retaliation, Belarus banned rail transit through its territory of refined oil, as well as chemical and mineral fertilizers loaded at Lithuanian Railways stations.

On 17 February, the EU Council adopted a regulation (published on 18 February), which was drawn up as a technical amendment to the restrictive measures already in effect.

However, that decision effectively expanded the list of Belarusian entities subject to the sanctions by adding two organizations — JSC Development Bank of the Republic of Belarus and JSC Bank Dabrabyt.

Along with the previously listed Belarusbank, Belinvestbank and Belagroprombank, those two were prohibited to make new loans or credit with a maturity exceeding 90 days, or deal with securities with a maturity exceeding 90 days. Commenting on the regulation, the Foreign Ministry of Belarus said that “appropriate arrangements on our part will follow when and to the extent that we deem necessary.”

6th Package: War in Ukraine

The day of 24 February became a new dividing range for Belarus–EU relations, as well as the sanctions–counter-sanctions confrontation.

The reason is naturally not the EU’s decision adopted on that day to extend the restrictive measures against Belarus until 28 February 2023, but the commencement of the Russia–Ukraine war. A few hours into the hostilities, the EU High Representative issued a declaration which, among other things, condemned “the involvement of Belarus in this aggression against Ukraine.” On the same day, the European Council called for “urgent preparation and adoption of a further individual and economic sanctions package that will also cover Belarus.” On the following day, 25 February, the EU Council included 20 Belarusian persons, who “facilitated the Russian military aggression from Belarus,” into the sanctions decision on Russia.

On 2 March, the EU Council began to adopt a “military” package of restrictions targeting directly Belarus. Sanctions were additionally imposed on 22 high-ranking members of Belarusian military personnel “in view of their role in the decision making and strategic planning processes that led to the Belarusian involvement in the Russian aggression against Ukraine.” New trade restrictions were introduced as well. They apply to intermediate materials used in the production of tobacco goods, iron and steel products, rubber products, wood products, and cement products. Further restrictions were also imposed on exports of dual-use goods and technology, and certain advanced goods and technology which might contribute to Belarus’s military, technological, defence and security development.

On 9 March, the EU expanded its restrictive measures against the Belarusian financial sector:

• Disconnected three banks (JSC Development Bank of the Republic of Belarus, JSC Bank Dabrabyt and JSC Belagroprombank) and their subsidiaries from the international financial messaging network SWIFT;
• Prohibited transactions with the National Bank of the Republic of Belarus related to the management of reserves and assets, as well as the provision of public financing or financial assistance for trade with, or investment in, Belarus;
• Prohibited the listing and provision of services in relation to shares of Belarusian state-owned entities on EU trading venues starting 12 April 2022;
• Significantly limited flows of funds from Belarus to the EU by prohibiting banks to accept any deposits from Belarusian nationals or natural persons residing in Belarus in excess of EUR 100,000, open accounts of Belarusian customers at the EU central securities depositories, and sell euro denominated securities to Belarusian customers;
• Banned the provision of euro denominated banknotes to Belarus.

Belarus’s counter-sanctions lunge was worded in early April. Resolution No. 209 of the Council of Ministers dated 6 April 2022 “On the list of foreign states performing unfriendly acts against Belarusian legal entities and/or individuals” defined the list of “unfriendly countries”, which included all of the EU member states. As a consequence, these countries and their residents became subject to the restrictions specified in Presidential Decree No. 93 dated 14 March 2022 “On additional measures to ensure stable operation of the economy”:

• The Ministry of Finance, agent banks and other legal entities were enabled by a corresponding decision of the Council of Ministers (its Presidium) to discharge obligations in the national currency;
• The Council of Ministers (its Presidium) was enabled to introduce a fee for premature termination of contracts (credit, lease, etc.), initiated by foreign organizations or citizens;
• The Council of Ministers was empowered to impose an increased tax rate on incomes of foreign organizations from payments due in Belarus (interest incomes, royalties, dividends, etc.);
• Participants (shareholders) of Belarusian entities, which are residents of the listed countries, were prohibited from disposing of shares (stocks) in the authorized funds of Belarusian entities;
• The implementation of international agreements to avoid double taxation may be suspended.

Also on 6 April 2022, the Council of Ministers and the National Bank of Belarus passed Resolution No. 212/10, which instructs repaying the principal and interests on foreign public loans received from lenders from “unfriendly countries” in Belarusian rubles at the official rate effective on the day of actual payment.

Furthermore, Presidential Decree No. 137 of 7 April 2022 “On enforcement documents” approved the suspension of the execution of enforcement documents issued in favour of residents of “unfriendly countries.” The document introduced an obligation for banks and other financial institutions to turn down any payment requests under enforcement documents independently submitted by the said residents without the payer’s consent.

On 8 April, the EU Council prohibited Belarusian freight forwarders from working in the European Union (including transit through the EU) starting 9 April. However, restrictions may not apply to some groups of goods — pharmaceutical, medical, agricultural, and food, as well as mail and humanitarian goods. Minsk reciprocated with equivalent restrictions. On 16 April, Belarus imposed a ban on the passage of cargo vehicles (trucks and tractors) registered in the EU across the customs border of the EAEU. The few exceptions include vehicles carrying mail and live animals. At the same time, carriers from the EU are allowed to travel through specially designated checkpoints in Belarus to perform cargo handling and recoupling. This mechanism is designed to partially compensate for losses suffered by Belarusian carriers. On 5 May 2022, the Belarusian government additionally introduced a ban for carriers registered in the EU to move bulky cargo through Belarus (except for car transporters and cargo with technological characteristics that do not allow going to the established checkpoints for cargo handling and recoupling). Also, the list of the checkpoints was expanded, as well as the list of the gas stations where trucks with European numbers are allowed to refuel.

7th Package: War in Ukraine and Domestic Situation

On 3 June 2022, the EU approved new restrictive measures against Belarus. At this point, it has become difficult to follow the numbering of the sanctions packages as EU justifies its decisions by both the war in Ukraine, where sanctions against Belarus are occasionally paired with those against Russia, and the domestic situation in Belarus. Therefore, we will define the new restrictive measures of 3 June as the 7^th package, although they consist of two different decisions. Yet, the overall justification in both documents is the same – “in view of the situation in Belarus and the involvement of Belarus in the Russian aggression against Ukraine”.

Council Implementing Regulation (EU) 2022/876 expanded the sanctions list by 12 individuals and 8 legal entities (charged with the “repression of civil society and the democratic opposition” or with “benefit[ing] from and support[ing] the Lukashenko regime”). Their assets in the EU are frozen, EU citizens are prohibited from providing them with financial resources, while the sanctioned individuals are also prohibited from entering the EU. Council Regulation (EU) 2022/877 (related to “Russia’s war on Ukraine”) removed JSC “Belinvestbank” – that is, already a 4^th Belarusian bank – from SWIFT. It also expanded restrictions on the sale, supply, transfer or export of dual-use goods and technology onto another 24 legal entities.

8th Package: War in Ukraine and Domestic Situation

The President of the European Commission, Ursula von der Leyen, announced the next package of restrictions against Belarus in mid-January 2023; yet, due to disagreements between the EU member states, the new sanctions package was adopted only on 3 August. Like the previous one, it has the same justification – “in view of the situation in Belarus and the involvement of Belarus in the Russian aggression against Ukraine”.

Council Implementing Regulation (EU) 2023/1591 and Council Implementing Decision (CFSP) 2023/1592 of 3 August 2023 added 38 individuals and 3 entities to the sanctions list (the EU claims they are “responsible for serious human rights violations, contribute to the repression of civil society and democratic forces, as well as those who benefit from and support the Lukashenko regime”). Their assets in the EU are frozen, EU citizens are prohibited from providing them with financial resources, while the sanctioned individuals are also prohibited from entering the EU. Thus, the total number of Belarusian nationals subject to such EU sanctions now stands at 233 individuals and 38 legal entities.

Council Regulation (EU) 2023/1594 of 3 August 2023 introduced the following export restrictions “in response to Belarus’s continuous involvement in Russia’s war of aggression against Ukraine”:

• export ban on goods and technology suited for use in aviation and the space industry, including aircraft engines and drones;
• prohibition of sale, supply, transfer or export of firearms, their parts and essential components and ammunition;
• further export restrictions on goods used by Russia for its war of aggression against Ukraine, including semiconductor devices, electronic integrated circuits, manufacturing and testing equipment, photographic cameras and optical components;
• extended export ban on dual-use goods and technology.

Essentially, Council Regulation 2023/1594 aims at equalising export restrictions against Belarus and Russia.

 

 

Yauheni Preiherman

Director, Minsk Dialogue Council on International Relations