On June 21, 2021, the United States, the EU, the UK, and Canada announced coordinated sanctions following the forced and unlawful landing of a Ryanair flight in Minsk and the detention by Belarusian authorities of journalist Raman Pratasevich and Sofia Sapega, in May 2021. The sanctions include new EU sectoral-style sanctions against certain sectors of the Belarusian economy, as well as targeted financial sanctions against dozens of individuals and entities in connection with alleged human rights violations and the violent repression of civil society, democratic opposition, and journalists in Belarus.
The new sanctions follow the reactivation, on June 3, 2021, of longstanding sanctions against nine Belarussian companies and their subsidiaries by the US Treasury Department’s Office of Foreign Assets Control (OFAC), as discussed in our April 20, 2021 blog post.
New EU Sanctions
Designations of individuals and entities
The EU Council adopted new targeted sanctions against 78 individuals and 8 entities (Council Decision (CFSP) 2021/1001; Council Implementing Decision (CFSP) 2021/1002; Council Regulation (EU) 2021/996; Council Implementing Regulation (EU) 2021/997; Council Implementing Regulation (EU) 2021/999). Among those targeted are also several prominent business figures whom the EU considers to support and benefit from the Lukashenko regime. EU sanctions targeting Belarus now apply to a total of 166 persons and 15 entities.
Those designated are subject to an asset freeze and EU operators are prohibited from making funds available to them. In addition, individuals are subject to a travel ban to the EU.
Sectoral sanctions against Belarus
The EU Council has adopted EU legislation as set out in Council Decision (CFSP) 2021/1031 and Council Regulation (EU) 2021/1030, which provides for sectoral sanctions, similar to those adopted against the Russian economy. This type of sanctions is different from the targeted financial restrictions and travel bans affecting individuals and entities. The sectoral sanctions include:
- a prohibition on the sale, supply, transfer or export to anyone in Belarus or for use in Belarus of specific equipment, technology or software intended primarily for use in the monitoring or interception of Internet and telephone communications;
- a prohibition on the provision of technical assistance, financial assistance or brokering services related to specific equipment, technology or software intended primarily for use in the monitoring or interception of Internet and telephone communications to anyone in Belarus or for use in Belarus;
- a prohibition on the provision of any telecommunication or Internet monitoring or interception services to, or for the benefit of, the Belarusian Government, public bodies, corporations and agencies or any person or entity acting on their behalf or at their direction;
- a prohibition on the sale, supply, transfer or export dual-use goods and technologies for military use or to specified persons, entities or bodies in Belarus (no listings have been issued for this purpose yet);
- a prohibition on the provision of technical assistance, financing or financial assistance related to dual-use goods and technologies for military use or to specified persons or entities in Belarus (no listings have been issued for this purpose yet);
- restrictions on trade in petroleum products, potassium chloride (‘potash’), and goods used for the production or manufacturing of tobacco products. For example, with respect to petroleum products, it is prohibited:
- to import the listed petroleum products into the EU if they originate in Belarus or have been exported from Belarus;
- to purchase petroleum products which are located in or which originated in Belarus;
- to transport petroleum products if they originate in Belarus, or are being exported from Belarus to any other country;
- to provide, directly or indirectly, technical assistance, brokering services, financing or financial assistance, including financial derivatives, as well as insurance and re-insurance, related to the prohibitions set out in the aforementioned points;
- restrictions on access to EU capital markets for i) Belarus, its Government, public bodies corporations or agencies, ii) the institutions listed in Annex IX and those owned by such institutions and iii) those acting on the behalf or at the direction of the aforementioned institutions. These restrictions concern:
- dealings with transferable securities and money-market instruments with a maturity exceeding 90 days; and
- new loans or credit with a maturity exceeding 90 days;
- prohibitions on providing insurance and re-insurance to the Belarusian government and Belarusian public bodies, corporations and agencies; and
- the European Investment Bank will stop any disbursement or payment under any existing agreements in relation to projects in the public sector, and any existing Technical Assistance Service Contracts.
For most of the above prohibitions there is the possibility to benefit from exceptions or to obtain derogations.
New UK Sanctions
The UK government announced the designation of 11 individuals and two entities under The Republic of Belarus (Sanctions) (EU Exit) Regulations 2019 (S.I. 2019/600). Among those targeted are senior-ranking officials in the Belarusian regime and BNK (UK) Ltd, an exporter of Belarusian oil products. UK sanctions targeting Belarus now apply to a total of 99 individuals and 9 entities.
Those designated are subject to an asset freeze and UK persons and any person within the UK are prohibited from dealing with the funds or economic resources of – or making funds/economic resources available to, or for the benefit of them. The prohibition on dealing with the funds or economic resources of those designated also extends to any legal entities they own or control, directly or indirectly, even if the particular entity is not itself listed by the UK as a designated person. In addition, the designated individuals are subject to a UK travel ban.
The press release accompanying the June 21 announcement also stated that the “UK is also developing plans for further measures targeting specific sectors of the Belarusian economy.”
New US Sanctions
In conjunction with the EU and UK announcements, OFAC named 16 individuals and five entities as Specially Designated Nationals (SDNs) pursuant to Executive Order (EO) 13405 of June 20, 2006, “Blocking Property of Certain Persons Undermining Democratic Processes or Institutions in Belarus.” The targets include President Alexander Lukashenko’s press secretary and the chairperson of the upper house of the Belarusian Parliament. The five SDN entities are:
- The Internal Troops of the Ministry of Internal Affairs of the Republic of Belarus;
- The Main Directorate for Combating Organized Crime and Corruption of the MVD of the Republic of Belarus;
- Directorate of Internal Affairs of the Brest Oblast Executive Committee;
- State Security Committee of the Republic of Belarus (the Belarusian KGB); and
- The Akrestsina Detention Center.
Blocking sanctions under EO 13405 prohibit US persons from dealing, directly or indirectly, with SDNs designated under the EO as well as any legal entity owned 50 percent or more by any SDNs. Property and interests in property of SDNs (and entities owned 50 percent or more by them) are blocked (frozen) when in the United States or within the possession or control of a US person.
OFAC also issued General License 3 (GL-3) under EO 13405 authorizing US persons to engage in transactions that are necessary and ordinarily incident to requesting, receiving, utilizing, paying for, or dealing in licenses, permits, certifications, or notifications issued or registered by the Belarusian KGB for the importation, distribution, or use of information technology products in Belarus. Any goods or technology exported or re-exported to, or provided in, Belarus that are subject to the Export Administration Regulations (EAR) must be licensed by the US Commerce Department to qualify for GL-3. GL-3 only authorizes the payment of fees to the Belarusian KGB of up to US$ 5,000 per calendar year.
As explained in OFAC FAQ 913, GL-3 “does not authorize the exportation, reexportation, or provision of any goods, technology, or services to the Belarusian KGB or any other blocked person, except for the limited purposes of complying with rules and regulations administered by, and certain actions and investigations involving, the Belarusian KGB or requesting certain licenses or authorizations for the importation, distribution, or use of information technology products in Belarus.” FAQ 912 states that GL-3 “only authorizes certain transactions and activities with the Belarusian KGB acting in its administrative capacity” and only for the limited purposes described in the GL.
Meanwhile, Canada imposed targeted sanctions against 17 individuals and five entities in Belarus pursuant to the Special Economic Measures (Belarus) regulations. The targets align with those of the EU and the UK.