Sanctions - Belarus
European Union (EU) sanctions have been in place against prominent individuals in Belarus since 2004 by way of the EU Common Position 2004/661/CFSP evolving into EU Regulation 765/2006, which sanctioned 36 people, including President Lukashenko. The United States (US) initiated similar sanctions against 10 individuals in 2006 through Executive Order 13045.
In recent years and following Britain’s exit from the EU, there is now a larger and more coordinated set of sanctions in place from the EU, UK, USA and Canada, though there are many differences too. On 2 December 2021, EU sanctions covered 183 individuals and 26 entities; UK sanctions covered 107 individuals and nine entities; US sanctions covered 84 individuals and 51 entities; and Canadian sanctions covered 96 individuals and 12 entities.
The sanctions were extended to certain bulk trades with Belarus, most notably potassium chloride (potash), petroleum products and tobacco. It should be noted that US and UK sanctioned entity Belaruskali is one of the largest potash producers in the world, accounting for 20% of global supply. Carriage of military and dual-use goods, monitoring technology and aircraft parts is also banned.Members should therefore check all parties to a voyage – including the charterer, shipper, physical supplier, consignee, receiver, local agents, banks and cargo insurers − against the lists of specially designated nationals (SDNs) and prohibited activities before considering undertaking any trade with Belarus or involving Belorussian individuals or entities. Regardless of a Member’s operational or flag state, trading with or on behalf of an SDN, or breaching a sanctioned trade, may result in severe penalties and possible loss of insurance cover.
The fifth update to EU sanctions against Belarus was set out in EU Regulation 2021/2124 of 2 December 2021. This added a further 17 individuals and entities to the SDN list started in 2004. The full list of 183 individuals and 26 entities can be found in Annex I of the consolidated text of EU Regulation 756/2006.
The prohibited activities, as set out in Article 1, are:
to sell, supply, transfer or export, directly or indirectly, equipment which might be used for internal repression
to provide, directly or indirectly, technical assistance related to the goods and technology listed in the EU Common Military List
to provide any telecommunication or internet monitoring or interception services
to sell, supply, transfer or export, directly or indirectly, dual-use goods and technology
to sell, supply, transfer, or export goods used for the production or manufacturing of tobacco products
to import 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; and to transport petroleum products if they originate in Belarus or are being exported from Belarus to any other country
to import, purchase or transfer, directly or indirectly, potassium chloride (‘potash’) product from Belarus, whether or not originating in Belarus.
The regulations provide the CN codes for prohibited potash trading, as follows.
Competent authorities in EU member states can authorise an exemption for contracts concluded before 25 June 2021 for shipment of dual-use goods and technology, tobacco products, petroleum products and potash, and for ancillary contracts necessary for the execution of such contracts. Authorisation can also be obtained for the import of non-lethal military equipment and armoured vehicles intended for protective use of EU personnel in Belarus, though authorisation for monitoring equipment can only be given if it is clear the equipment will not be used for repression by the Belarusian government.
For dual-use goods and technology, the prohibitions do not apply to exports, sale, supplies or transfers related to maintenance and safety of existing civil nuclear capabilities for non-military use. The prohibitions also do not apply to purchases in Belarus of petroleum products which are required to meet the essential needs of the purchaser in Belarus or of humanitarian projects in Belarus.
With regard to the SDNs in Annex I, Article 2 states that:
- All funds and economic resources belonging to, or owned, held or controlled by the natural or legal persons, entities and bodies listed in Annex I shall be frozen.
- No funds or economic resources shall be made available, directly or indirectly, to or for the benefit of the natural or legal persons, entities and bodies listed in Annex I.
- The participation, knowingly and intentionally, in activities the object or effect of which is, directly or indirectly, to circumvent the measures referred to in paragraphs 1 and 2 shall be prohibited.
As always, EU sanctions apply within EU territory, on board any vessel under jurisdiction of an EU member state, to any EU national, to any entity incorporated or constituted under the law of an EU member state, and to any entity in respect of any business done in whole or in part within the EU. Given most maritime trade to and from Belarus has to pass through EU member states or EU territorial waters, it will most likely be subject to EU sanctions.
Following its exit from the EU on 31 January 2020, the UK enacted its own Belarus sanctions legislation on 31 December 2020 through The Republic of Belarus (Sanctions) (EU Exit) Regulations 2019, which come under the Sanctions and Anti-Money Laundering Act 2018. The regulations have replaced, with substantially the same effect, relevant existing EU legislation and related UK regulations. However, the SDN list is published separately, both within the global UK Sanctions List and on its own as the Current list of designated persons: Belarus. At 4 February 2022 this named 108 individuals and 10 entities subject to asset freeze.
Specifically, the regulations impose trade prohibitions relating to:
military goods and military technology
dual-use goods and technology
internal repression goods and technology
interception and monitoring goods and technology
interception and monitoring services
technical assistance relating to aircraft
tobacco industry goods
Part 6 covers licencing and exception provisions. For tobacco industry goods, potash and petroleum products, a licence may be granted for the export, making available, supply or delivery if it relates to the execution of contracts concluded before 9 August 2021 or ancillary contracts necessary for the execution of such contracts. For more detail Members should refer to Republic of Belarus sanctions: guidance dated 19 October 2021.
With regard to enforcement, the regulations apply to any UK national anywhere, or anyone within UK territory. Any breach of the trade sanctions prohibitions in the regulations is triable either way and carries a maximum sentence on indictment of 10 years’ imprisonment or a fine (or both). Any breach of the trade licensing provisions is also triable either way and carries a maximum sentence on indictment of 2 years’ imprisonment or a fine (or both).
Members should also note that, as set out in Part 9, Royal Navy officers and British police can board, search for and seize prohibited goods on any ship anywhere in the world subject to authority from the Secretary of State.
US sanctions have largely mirrored those of the EU, with the latest being set out in Executive Order 14308 of 9 August 2021. Together with Executive Order 13045 of 16 June 2006, these cover (as of 2 December 2022) 84 Belarusian individuals, 51 entities and three aircraft. SDN details can be found by selecting the programmes ‘Belarus’ and ‘Belarus-EO14038’ at the Office of Foreign Assets Control’s (OFAC) sanction search list.
Executive Order 14308 specifically states that the designated individuals include anyone known, ‘to operate or have operated in the defense and related materiel sector, security sector, energy sector, potassium chloride (potash) sector, tobacco products sector, construction sector, or transportation sector of the economy of Belarus.’ Additionally, non-US persons will risk sanctions themselves if they have, ‘materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of,’ prohibited activities.
Both orders state that, ‘All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person, of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in’.
Directive 1 under executive order 14308 also states that all transactions in, provision of financing for, and other dealings in new debt with a maturity greater than 90 days issued on or after 2 December 2021 by the Belarus Ministry of Finance and Development Bank are prohibited by US nationals and within the USA, unless licensed or otherwise authorised by OFAC.
With regard to potash trading, OFAC designated major potash exporter Belaruskali on 9 August 2021. Under OFAC General Licence 4 of August 2021, transactions with the company were allowed to wind down until 8 December 2021. On 2 December 2021 OFAC added Belarusian Potash Company and its subsidiary Agrorozkvit to the list of designated entities for their roles in facilitating potash exports on behalf of Belaruskali. OFAC General Licence 5 of 2 December 2021 provides a similar winding-down authorisation for transactions with these two companies and their subsidiaries (including those over 50% owned) until 1 April 2022. Russian-owned potash fertilizer manufacturer Slavkali was also added to the designated list in December 2022. The company’s new Chinese-funded potash mine at Nezhinsky is the largest investment project in the country.
Members can find further details including frequently asked questions on the US Department of the Treasury page on Belarus sanctions.
On 24 February 2022, OFAC announced further sanctions against Belarus because of their support for Russian aggression against Ukraine. Two banks (plus subsidiaries), ten entities (with some related senior management) in the Belarussian defence and security industries, and three officials with close ties to President Lukashenka. Full details of OFAC’s actions and the list of designated entities can be found here.
Members are strongly advised to avoid all trades involving any designated entity or one which is more than 50% owned by a designated entity.
The information provided by the Club and in particular through its website is not and is not intended to be exhaustive. Every effort is made to ensure the accuracy of the information provided. However this cannot be guaranteed given that sanctions measures are subject to alteration by governmental organisations at short notice. Further the information on this site is not, and should not be relied upon as, independent legal advice.
Members are strongly advised to undertake due diligence before fixing any business to or from a sanctioned country in order to ensure that neither the prospective cargo nor the parties to the planned venture are sanctioned. The Club is willing to assist Members where possible but they may nevertheless wish to take independent legal advice.