United States, European Union, United Kingdom and Canada Coordinate Further Sanctions Against Belarus
In an interesting announcement, the US, EU, UK and Canada implemented additional sanctions against Belarus. The coordinated announcement reflected the Biden Administration’s diplomatic commitment to joint sanctions actions. The strategy is designed to increase the impact of sanctions programs in response to President Lukashenko’s pushing of a humanitarian crisis resulting from the migrant crisis in Eastern Europe. This humanitarian crisis resulted in widespread condemnation by Western allies.
On December 2, 2021, the US, EU, UK and Canada jointly announced new sanctions against Belarus government officials, state-owned businesses, and other organizations. In addition, several individuals will be subject to travel bans preventing them from entering or transiting the EU and UK. The US also announced new financial sectoral sanctions, similar to those already imposed by the EU, UK and Canada. The recent coordinated action follows a first round of sanctions by the same organizations in August 2021.
The US Department of Treasury’s Office of Foreign Asset Control (“OFAC”) announced additional sanctions.
OFAC issued Directive 1, as a new sectoral sanction which prohibits US persons from dealings in new debt with a maturity of greater than 90 days by the ministry of Finance or the Development Bank of Belarus.
OFAC also designated 20 additional individuals, 12 entities and three aircraft to the Specially Designated Nationals List (“SDNs”). The designated individuals are known close associates to Lukashenko. The targeted sanctions are focused on Belarus’ defense, security, tourism, and potash sectors, and include three major companies: Kidma Tech OJSC, OJSC Belarusian Potash Company, and Agrorozkvit LLC.
OFAC also released a new General License 5 which authorizes wind-down transactions involving Belarusian Potash and Agrorozkvit (or any entity 50 percent or more owned by these entities). General License includes a clarification that no transactions with Belaruskali OAO are authorized. Belaruskali was officially designated by OFAC on August 9, 2021.
The EU added 17 individuals and 11 entities. The new designations target political officials, airlines, tour operators and hotels that were facilitating the migration crisis for political purposes. Additionally, the EU added Belorusneft, the state-owned oil company, and Belshina, a tire manufacturer.
The UK added 8 Belarus individuals and froze the assets of OJSC Belaruskali, a potash fertilizer producer, which was already designated by the United States.
On December 2, 2021, Canada added 24 individuals and 7 entities to its Special Economic Measures Regulations for Belarus. The new entities included Tsentrkurot, the state-owned tourist operator, and the Presidential Sports Club.
Switzerland is expected to expand its list under the coordinated actions and sanctions against President Lukashenko and the Belarus government. While such coordinated actions may prpove to be more effective in practice, for trade compliance officers, the overlapping and distinct aspects of the various sanctions regimes presents certain challenges.