On Monday 21 June 2021 the governments of the United Kingdom, the European Union, Canada and the United States made a joint statement announcing co-ordinated new sanctions on Belarus. The new sanctions were imposed in response to the forced diversion of a Ryanair flight to Minsk, Belarus on 23 May 2021 and the subsequent arrest of opposition journalist Raman Pratasevich, and his companion Sofia Sapega, and to ongoing concerns about the Belarusian regime’s attacks on human rights and the suppression of democracy under its president Alexander Lukashenko.
The UK has sanctioned 11 new individuals and 2 entities under the Republic of Belarus (Sanctions) (EU Exit) Regulations 2019 (S.I. 2019/600) (the “Belarus Regulations“). The new designations are subject to a targeted asset freeze and UK nationals, UK companies and persons within the territory of the UK are prohibited from dealing with their funds or economic resources, making funds or economic resources available to them, or engaging in activities which would circumvent these prohibitions. The designated persons are also subject to a travel ban which prohibits them from entering the UK.
The individuals designated include:
- senior officials in the government and the Airforce who were responsible for the interception and landing of the aircraft carrying Pratasevich and Sapega and their arrest and treatment in detention;
- the chairman of the national television channel which recorded and broadcast the interview with Pratasevich which is widely believed to have been filmed under duress; and
- other officials involved in the continued suppression of democracy and human rights following the fraudulent presidential elections of 9 August 2020.
The two entities designated are:
- Belaeronavigatsia Republican Unity Air Navigation Services Enterprise, which is responsible for Belarusian air traffic control; and
- BNK (UK) Ltd, an exporter of Belarusian oil products which is believed to be controlled (directly or indirectly) by President Lukashenko.
The press release published on 21 June 2021 announcing the new sanctions states that the UK “is also developing plans for further measures targeting specific sectors of the Belarusian economy.” These measures are expected to be similar to the EU sectoral sanctions discussed below. We will update this briefing once they have been introduced.
The EU has imposed new targeted asset freezes and travel bans under Council Implementing Regulation (EU) 2021/997) (and Council Regulation (EU) 2021/996 amending Council Regulation (EC) 765/2006 and Council Decision (CFSP) 2021/1001 amending Decision 2012/642/CFSP) on 78 persons and 7 entities which include:
- public prosecutors and members of the judiciary responsible for politically motivated rulings against journalists and protestors and government and police officials responsible for the inhumane and degrading treatment of detainees;
- senior figures in the media and government responsible for providing false information about the outcome of the presidential election;
- members of Lukashenka’s close family;
- prominent businessmen with close relationships with Lukashenka, including significant Russian investor Mikhail Guteriyev;
- government ministers and members of the Air Force responsible for the forced diversion of the Ryanair flight to Belarus;
- Belaeronavigatsia (responsible for air traffic control) and its director general; and
- several entities that have benefitted from the Lukashenka regime.
There are now a total of 166 people and 15 entities subject to asset freezes and travel bans under the EU’s Belarus regime. EU nationals, EU companies and persons within the territory of the EU are prohibited from dealing with the funds or economic resources of these designated persons, making funds or economic resources available to them, or engaging in activities which would circumvent these prohibitions. There are exemptions available for humanitarian assistance, environmental projects and nuclear safety.
On 24 June 2021 the EU also imposed a range of sectoral sanctions, which are similar to those targeted at the Russian economy, under Council Regulation (EU) 2021/1030 and Council Decision (CFSP) 2021/1031. They include prohibitions 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 (“Annex IV Equipment“);
- the provision of technical assistance, financial assistance or brokering services related to Annex IV Equipment to anyone in Belarus or for use in Belarus;
- 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;
- the sale, supply, transfer or export dual-use goods and technologies for military use or to persons, entities or bodies in Belarus listed in Annex V;
- the provision of technical assistance, financing or financial assistance related to dual-use goods and technologies for military use or to Annex V persons or entities in Belarus;
- the sale, supply, transfer or export of goods used for the production or manufacturing of tobacco products to anyone in Belarus or for use in Belarus;
- importing specified petroleum products into the EU if they originate in Belarus or have been exported from Belarus; purchasing such products located in or originating in Belarus; transporting them if they originate in or are being exported from Belarus; or providing technical assistance, brokering services, financing or financial assistance related to these prohibitions;
- the import, purchase or transfer of potassium chloride (“potash”) products, a common ingredient in fertiliser, listed in Annex VIII from Belarus;
- dealings with transferable securities and money-market instruments, or new loans or credit, with a maturity exceeding 90 days issued after 29 June 2021 by (a) Belarus, its government, public bodies, corporations or agencies, (b) the institutions listed in Annex IX or non-EU entities owned by them, and (c) anyone acting on behalf or at the direction of such institutions;
- providing insurance and re-insurance to the Belarusian government, its public bodies, corporations and agencies;
- disbursements or payments by the European Investment Bank under any existing agreements in relation to projects in the public sector, and the suspension of any existing Technical Assistance Service Contracts.
Member states are also required to take actions in order to limit the involvement in Belarus of multilateral development banks of which they are members. Limited exceptions apply to most of the prohibitions listed above and there are licensing grounds available in some circumstances.
Some media critics suggest the sanctions do not go far enough, in particular because the restrictions on trading potash only affect products with a percentage of potassium chloride below that contained in the main export of state-owned Belaruskali, the world’s top potash producer. Belarus’ response to date, however, which includes recalling its permanent representative to the EU and asking the EU representative in Minsk to leave the country, imposing a travel ban on the EU officials involved in drafting the sanctions and withdrawing its cooperation in assisting the EU to combat illegal migration and organised crime, suggests the sanctions are already having some political impact.
On 21 June 2021 the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated 16 individuals and 5 entities under Executive Order (“E.O.”) 13405 of June 16, 2006 in response to, inter alia, the “reckless forced diversion of a commercial Ryanair flight and arrest of journalist Raman Pratasevich . . . and his companion, Sofia Sapega . . . .” You can read our more detailed blog post on the sanctions imposed by OFAC here.
Whilst some entities and individuals have been designated under the UK, EU and US lists, each government has also designated individuals and entities that do not appear on the other lists. Companies with a nexus to the UK, EU and US will therefore need to screen against all three lists. Companies will also need to ensure they are screening thematically to capture any of the new sanctions aimed at sectors of the Belarusian economy which are relevant to their business, and to adjust these processes to include the expected UK sectoral sanctions once they are introduced.