Executive Summary
The European Union’s (EU) strategy on Belarus since the start of the August 2020 post-electoral crisis has been based on two pillars. One of them has focused on imposing restrictive measures against the authoritarian regime of Aliaksandr Lukashenka, while the second one has envisaged support for civil society, the exiled political opposition and the Belarusian pro-democracy movement. This contribution focuses on the first dimension of the EU strategy, i.e., its sanctions policy against Belarus. It addresses two interrelated questions: “What types of sanctions have been imposed by the EU since August 2020?” and “How can their pressure on the Belarusian regime be increased?”.
This analysis argues that while the EU has imposed comprehensive restrictive measures against Belarus since August 2020, their impact on the Lukashenka regime can be significantly enhanced. The main means to achieve this goal are to: 1) strengthen diplomatic sanctions; 2) expand the list of individuals targeted by personal sanctions; 3) close loopholes and evasion mechanisms used by Russia with the help of Belarusian intermediaries to bypass export restrictions and financial sanctions; and 4) promote closer coordination on the implementation of sanctions between the EU and its international partners.
State of Play
The EU has introduced six packages of sanctions against the Belarusian regime since the start of the 2020 post-electoral protests (see Table 1 for overview). The first three rounds of restrictive measures were triggered by the 2020 fraudulent presidential elections and the violent suppression of peaceful demonstrations. The fourth and subsequent rounds of sanctions resulted from the escalation of human rights abuses in Belarus, the forced landing of a Ryanair flight, the migration crisis instigated by the Belarusian regime on the EU’s borders and the involvement of Belarus in Russia’s war against Ukraine.
The aims of the imposed sanctions are to put pressure on the Belarusian authorities to avoid further violence and end repression, release all political prisoners and other unjustly detained persons, initiate a genuine and inclusive national dialogue with broader society, and end the Belarusian regime’s involvement in Russia’s military aggression against Ukraine.[1] As the situation in Belarus has not improved, notably the level of internal repression has not declined and the Lukashenka regime continues to support Russia in its war against Ukraine, the EU has a rationale for imposing stricter restrictive measures. This necessity has been amplified by Lukashenka’s recent decision to allow a significant Russian military build-up on Belarusian territory, raising the threat that Russia might be planning to open up a new front in its war against Ukraine.[2]
According to the EU’s classification,[3] the restrictive measures introduced against Belarus since 2020 can be roughly divided into three main groups. First, there are diplomatic sanctions, which involve interruption of diplomatic relations with the target country, the recall of diplomatic representatives of the EU and its member states and other similar measures. The second group encompasses targeted sanctions against individuals and entities which are realized through travel bans that prevent listed individuals from entering or transiting through EU territory and asset freezes blocking all accounts in the EU belonging to the sanctioned persons and entities. Targeted restrictive measures against individuals are often referred to as personal sanctions.
The third group consists of economic sanctions, which aim to impose severe economic consequences on the target state and to thwart its abilities to engage in destructive behavior.
Economic sanctions are referred to as export restrictions if the EU bans European entities from selling certain commodities to the target state. In the case of Belarus these commodities mostly include dual-use goods and technologies that contribute to military, technological, defence and security-related development of Belarus.
Economic sanctions are referred to as sectoral sanctions if they target a specific sector of a state’s economy. Examples of sectoral sanctions imposed on the Lukashenka regime include financial sanctions, which place restrictions on the Belarusian banking system; transport sanctions, which impose bans on the Belarusian aviation sector (an airspace ban) and road transport; as well as sanctions focused on strategic sectors of the Belarusian economy, such as wood processing, potash, petrochemicals, rubber and steel industries.
Enhancing the Impact of Sanctions
Diplomatic Sanctions
The EU member states have considerably downgraded their diplomatic relations with Belarus since August 2020. The results of the 2020 presidential election were not recognized and some states, such as Lithuania, went even further by naming the representative of the Belarusian opposition, Sviatlana Tsikhanouskaya, the president-elect of Belarus.[4] Although the EU does not officially recognize Lukashenka as the legitimate leader of Belarus,[5] it is important that this policy of non-recognition is implemented consistently and that Lukashenka is not referred to as “President” in the official discourse or media publications across all EU member states. This measure can help to delegitimize Lukashenka in the eyes of the Belarusian army and law enforcement officers, as well as the Belarusian people.
Many EU member states have recalled their ambassadors from Belarus since the start of the 2020 post-electoral crisis. It is also crucial that the EU strengthens cooperation with the Belarusian democratic forces and supports the removal of representatives of the Lukashenka regime from various international organizations, following the example of the Council of Europe which has recently set up a special “contact group” and launched a new mechanism for regular dialogue with Belarusian democratic forces and civil society.[6] An additional important measure would be to recognize and formalize cooperation with the United Transitional Cabinet of Belarus, which was created by Tsikhanouskaya in August 2022. It functions as a transitional government in exile until new free and democratic elections can take place in Belarus.[7]
Furthermore, it is important that the EU underlines the need to adopt a nuanced approach when discussing the role of Belarus in Russia’s war in Ukraine. It is crucial to distinguish between the Lukashenka regime, which must be recognized as an ally and enabler of the Kremlin’s invasion of Ukraine, and the Belarusian anti-war resistance, which has played an important role in helping Ukraine to fight against Russian aggression. The examples of railway partisans and the Kastus Kalinouski Regiment can be used to emphasize the solidarity of democratic Belarus with Ukraine’s strive for independence and to challenge the narrative of the collective responsibility of Belarusians as “tacit collaborators” with the Lukashenka regime.
Personal Sanctions
The EU has currently introduced personal sanctions against 195 individuals in Belarus, focusing on two main target groups – state officials and regime-linked business elites. This first group consists of senior figures in all branches of power, including Aliaksandr Lukashenka and his family (two of his sons and wife), the Prosecutor General and a number of judges, several members of the Belarusian Parliament and the Committee of Governmental Control (KGB), as well as state officials in various ministries such as the Ministry of the Interior, the Ministry of Defence, the Ministry of Health and the Ministry of Information.
The impact of these sanctions can be increased if 1) they target not only senior officials, but also lower ranks in the “power vertical” who might be more likely to defect from the system; and 2) if they are also extended to the family members of the sanctioned individuals as well as persons who hold the assets of those individuals (proxy holders). Any attempts by the designated individuals to transfer their foreign property and capital to their spouses and other trusted persons should be closely monitored and serve as grounds for introducing fast-track restrictive measures.
Personal sanctions against the second group of individuals – business elites – are more efficient at bringing about economic losses for the Lukashenka regime. Belarus does not have a traditional oligarchic system akin to that in Ukraine, where several powerful individuals and groups have sufficient wealth to influence different spheres of political life. The financial success of businessmen in Belarus is based on having close ties with Lukashenka and his entourage, which makes them entirely dependent on presidential favors and turns them into sponsors of the Belarusian regime (“Lukashenka’s wallets”). In such a system, an authoritarian leader grants a small group of businessmen access to the most lucrative resources and segments of the national economy in exchange for financial contributions and political loyalty. Thus, the competition for resources turns into a struggle to be close to the president and his apparatus. Unlike oligarchs in Russia or Ukraine, Belarusian business elites seldom appear in public and choose to stay in the shadows, which complicates the process of identifying them in order to impose sanctions.
Since 2020, the EU has sanctioned a select group of regime-linked business elites in Belarus, which consists of eight Belarusian individuals,[8] including two sons of businessman Aliaksei Aleksin after he tried to rename his companies and transfer shares to his family members to evade restrictive measures.[9] EU personal sanctions were also imposed on Russian businessman Mikhail Gutseriev and Serbian businessman Bogoljub Karić, both of whom have significant business interests in Belarus.
However, several representatives of big business associated with Lukashenka’s inner circle remain unsanctioned by the EU. Among them is Aliaksandr Moshensky, a tycoon in the food industry, notably dairy products (Savushkin Product) and fish processing business. He is the owner of Santa-Bremor, one of the largest suppliers of fish products to post-Soviet markets and some EU member states. Other business moguls include Paval Tapuzidis, who is active in the tobacco industry and owns several shopping centres in Belarus; Vital Arbuzau, a partner in and chair of Fenox Global Group which specializes in the production and distribution of automobile components for Russian, European and American manufacturers, as well as Aliaksandr Lutsenka, founder of agro-industrial holding Sodruzhestvo Group. Personal sanctions against business elites would be more efficient if they were extended to family members and proxy holders, replicating the case of the restrictive measures on Aleksin and two of his sons.
Economic Sanctions
The EU has imposed comprehensive economic sanctions on the Belarusian regime since August 2020 and closed a number of crucial loopholes which existed after the adoption of June 2021 package of sanctions, in particular on the export of potash and petrochemical products. However, additional measures need to be taken to ensure close synchronization between different sanctions applied to Belarus and Russia in order to prevent Belarus from becoming a hub for the circumvention of EU sanctions.
Export restrictions
The EU has imposed significant export restrictions in relation to Russia but only a limited number of export restrictions vis-à-vis Belarus since the start of the war against Ukraine in February 2022. As a result, the lists of prohibited items in the Harmonized System[10] differ between Russia and Belarus, and many goods which are banned for export to the Russian Federation can be legally purchased by Belarusian intermediaries and then re-exported to recipients in Russia using forged documents. In addition, many intermediaries in Belarus offer their services to bypass sanctions by transporting prohibited goods from the EU to recipients in Central Asia, changing the destination of these shipments from Central Asian states to the Russian Federation after they have crossed the Belarusian border with the EU.[11] Such evasions are easy to implement due to the lack of border checks and customs controls between Belarus and Russia, which were abolished following integration of the two states within the Union State and the Eurasian Economic Union.
Thus, the effectiveness of export restrictions in relation to Russia can be significantly increased if the EU expands the list of restricted goods that cannot be exported to Belarus. In particular, the areas where export restrictions between Russia and Belarus require harmonization include:[12]
- The ban on the sale, supply, transfer or export of goods and technologies suitable for use in oil refining (Article 3b of Council Regulation 2022/328).
- The ban on the sale, supply, transfer or export of goods and technology suitable for use in aviation or the space industry (Article 3c of Council Regulation 2022/328).
- The ban on the sale of luxury goods to any natural or legal person, entity or body in Russia or for use in Russia (Article 3h of Council Regulation 2022/428).
- The ban on maritime navigation goods and technology (Council Regulation 2022/394).
- The ban on the sale, supply, transfer or export of goods that may contribute to the strengthening of Russian industrial capacity (amended Council Regulation 2014/833).
- The ban on goods which contribute to Russia’s military and technological enhancement or the development of its defence and security sector (Council Regulation 2022/576).
Financial sanctions
The EU has imposed a set of financial sanctions on Belarus since June 2021. However, just as in the case of export restrictions, these restrictive measures are much softer than the ones introduced against Russia. The lack of synchronization of sanctions in the financial sector, especially in the area of disconnection from Visa and Mastercard services, has led to a rise of Russian “banking tourism” in Belarus since the start of the war in Ukraine. To bypass international sanctions, Russian nationals travel to Belarus, where they can be issued MasterCard and Visa bank cards by several Belarusian banks and make payments abroad and in international online stores. The number of applications for international payment cards by Russian citizens at Belarusbank, one of the largest banks in Belarus, increased by over 50 per cent in the first months after the war in Ukraine[13].
Banking tourism has been usually combined with shopping trips offered as a package by several tour operators in Russia. Major brands such as Nike, Zara, Levis, Puma and Adidas still operate in Belarus, making it a popular destination for Russian shopping tourism. Those who prefer not to open a Visa or Mastercard can do electronic transfers using the Russian card payment system “Mir” which is operational in Belarus.
Another area where financial sanctions against Russia and Belarus are not synchronized is the suspension of Worldwide Interbank Financial Telecommunication (SWIFT) services. Until now four Belarusian and ten Russian banks have been disconnected from SWIFT as a result of EU sanctions.[14] Expanding this restrictive measure to more Belarusian banks can help to block an important mechanism used by Russia to evade EU financial sanctions. Russia has been able to manage disconnection from SWIFT because it has its own System for the Transfer of Financial Messages (SPFS), which is an analogue of SWIFT. As of 2022, all the Belarusian banks have been connected to the SPFS.
Thus, international payments can be routed using SPFS from a Russian parent to its Belarusian subsidiary (most of the Russian banks excluded from SWIFT have subsidiaries in Belarus) and then, using SWIFT, to European manufacturers or intermediaries. SPFS can also be used to wire payments to intermediaries in Central Asia and the Middle East, where several banks are connected to it.[15] These intermediaries then make international payments from their local bank accounts using the SWIFT network.
Therefore, the EU must adopt additional financial restrictions to close this evasion mechanism used by Russia to bypass financial sanctions through Belarus and other regional intermediaries.
Effective Implementation of EU Sanctions
The effectiveness of EU sanctions can be achieved by their proper implementation and enforcement. In contrast to the United States, where the Office of Foreign Assets Control (OFAC) is responsible for overseeing compliance with and implementation of US sanctions, the EU system of sanctions enforcement is decentralized. EU sanctions are adopted by the EU Council while it is the responsibility of each EU member state to oversee proper compliance with the sanctions regime and report any breaches to the European Commission. The Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) in the European Commission provides guidance on sanctions implementation to member states.
In order to prevent any loopholes or circumvention, closer coordination on sanctions is needed among all the EU member states. Some progress has been already made in this direction and a number of actions were agreed following the first meeting on sanctions implementation at the European Commission in October[16]. They include organizing a structured and comprehensive exchange of best practices among member states on setting up efficient internal structures to oversee implementation and establishing a new mechanism that allows member states to contact each other and exchange information in real time on derogations and authorizations with a cross-border dimension, as well as entities owned and controlled by listed persons. The EU has also recently launched an online whistleblower tool that enables anonymous reporting on sanctions violations.[17]
Additional measures could include more active engagement with the existing expert networks on sanctions, such as the Yermak-McFaul International Working Group on Russian Sanctions,[18] as well as offering support for the creation of new expert groups on restrictive measures, in particular focused on Belarus which has been playing a crucial role in Russia’s war against Ukraine.
The EU should also strengthen coordination of its sanctions with the US and other Western states, such as the United Kingdom, Canada, Norway and Switzerland. Measures should be taken to develop a fast-track mechanism for imposing sanctions against certain individuals ensuring that if an individual is sanctioned in one jurisdiction, this restrictive measure should extend to all the other jurisdictions. The ultimate goal can be the creation of a unified body, e.g., a Coordination Council, with a special representative on sanctions, which will ensure that all the adopted restrictive measures are properly implemented and monitored.
Conclusions and Recommendations
The Lukashenka regime, which has stolen elections, violently suppressed peaceful demonstrations and acted as an ally in Russia’s full-scale invasion of Ukraine, must be placed in complete political, diplomatic and economic isolation. The fates of democratic Belarus and Ukraine are interconnected, and the EU can play a crucial role in supporting Belarusians and Ukrainians in their quests for democratic transformations.
The list of recommendations below aims to increase the effectiveness of the EU’s restrictive measures and ensure that they maximize the cost for the Belarusian regime of continuing repression of civil society and participation in Russia’s war against Ukraine.
- Recommendation 1: The EU should strengthen its policy of non-recognition of Aliaksandr Lukashenka as a legitimate President of Belarus. Diplomatic ties with the Lukashenka regime should be minimized and Belarus should be consistently recognized as a co-aggressor state in Russia’s war in Ukraine. At the same time, the EU should acknowledge, support and emphasize the crucial role of the Belarusian anti-war movement in its fight on behalf of Ukraine against the Russian invasion.
- Recommendation 2: The EU can consider expanding the list of individuals designated under personal sanctions in Belarus in the following ways: a) these sanctions should include not only senior state officials, but also lower ranks in the power vertical as well as target members of their families and proxy holders; b) the list of sanctioned regime-linked business elites can be enlarged by adding four businessmen (Aliaksandr Moshensky, Paval Tapuzidis, Vital Arbuzau, Aliaksandr Lutsenka), as well as the members of their families and proxy holders.
- Recommendation 3: The EU should synchronize the nomenclature in the lists of restricted items for export to Russia and Belarus and prevent Russia from circumventing sanctions through Belarusian intermediaries. Close harmonization is needed on six categories of goods, including trade in equipment for oil refining, goods and technology suitable for aviation and the space industry, as well as sale of luxury goods.
- Recommendation 4: The EU should strengthen its financial sanctions against the Belarusian regime. SWIFT services can be suspended for a larger number of Belarusian banks, particularly those which act as subsidiaries of Russian banks. In addition, EU banks should be prohibited from partnering with SPFS and international banks in Central Asia and the Middle East should be encouraged to disconnect from it.
- Recommendation 5: The EU needs to take further steps to enhance coordination on sanctions among its member states and EU institutions, as well as its international partners, including but not limited to the US, UK and Canada. Some of the measures can include more active engagement with expert networks on sanctions, setting up a fast-track mechanism for imposing personal sanctions as well as creating a Coordination Council on restrictive measures, which will make the EU sanctions policy more centralized. These measures will help to institutionalize knowledge on strategies and techniques for evading sanctions and ensure that the EU’s restrictive measures are properly monitored and implemented.
[1] European Council, EU restrictive measures against Belarus. June 7, 2022, ttps://www.consilium.europa.eu/en/policies/sanctions/restrictive-measures-against-belarus/ (accessed November 20, 2022).
[2] Andrew Higgins, Russian troops will return to Belarus in large numbers, Lukashenko says. New York Times, October 10, 2022, https://www.nytimes.com/2022/10/10/world/europe/belarus-russia-ukraine.html; EU Presidency Says Sanctions May Next Target Belarus. Kyiv Post, November 1, 2022, https://www.kyivpost.com/russias-war/eu-presidency-says-sanctions-may-next-target-belarus.html
[3] European Council, Different types of sanctions. June 3, 2022, https://www.consilium.europa.eu/en/policies/sanctions/different-types/ (accessed November 25, 2022).
[4] Seimas ragina tarptautinę bendruomenę įvertinti Rusijos primetamą sąjungą Baltarusijai. September 10, 2020, https://www.lrs.lt/sip/portal.show?p_r=35403&p_k=1&p_t=272425 (accessed November 20, 2022).
[5] European Council, Belarus: Declaration by the High Representative on behalf of the European Union on the so-called ‘inauguration’ of Aleksandr Lukashenko. September 24, 2020, https://www.consilium.europa.eu/en/press/press-releases/2020/09/24/belarus-declaration-by-the-high-representative-on-behalf-of-the-european-union-on-the-so-called-inauguration-of-aleksandr-lukashenko/ (accessed November 21, 2022).
[6] Council of Europe, Council of Europe launches regular dialogue with Belarusian democratic forces. September 8, 2022, https://www.coe.int/en/web/portal/-/council-of-europe-launches-regular-dialogue-with-belarusian-democratic-forces (accessed November 27, 2022).
[7] Office of Sviatlana Tsikhanouskaya, Sviatlana Tsikhanouskaya announced the United Transitional Cabinet and named its first members. August 9, 2022, https://tsikhanouskaya.org/en/events/video/b9c67e57d4778ba.html (accessed November 20, 2022).
[8] Among the sanctioned individuals are: Aliaksandr Shakutsin (owner of Amkodor holding which specializes in construction, machine building, agriculture and other sectors), Mikalai Varabei and Aliaksandr Zaitsau (co-owners of Bremino Group – a company with business interests in petroleum, coal transit, banking and other sectors), Aliaksndr Shatrou (owner and CEO of LLC Synesis which provided the Belarusian authorities with a surveillance platform, Kipod, used to identify demonstrators by analysing video footage and employing facial recognition software), Siarhei Tsiatseryn (owner of the company “Belglobalstart” which distributes alcoholic drinks and other products) and Aliaksei Aleksin (and two of his sons Dzmitry and Vital Aleksin) with business interests in energy, potash and hospitality, among others.
[9] Council Implementing Regulation (EU) 2022/876, Official Journal of the European Union. June 3, 2022, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32022R0876 (accessed November 20, 2022).
[10] The Harmonized Commodity Description and Coding System, commonly referred to as the Harmonized System, is an international system for classifying goods developed by the World Customs Organization (WCO).
[11] Interview with a representative of National Anti-Crisis Management, November 3, 2022.
[12] Ibid.
[13] Leyla Latypova, Russians Flock to Belarus for Sanctions-Free Shopping Tourism. The Moscow Times, September 7, 2022, https://www.themoscowtimes.com/2022/09/07/russians-flock-to-belarus-for-sanctions-free-shopping-tourism-a78675 (accessed November 21, 2022).
[14] European Council, EU sanctions against Russia explained. n.d., https://www.consilium.europa.eu/en/policies/sanctions/restrictive-measures-against-russia-over-ukraine/sanctions-against-russia-explained/ (accessed November 25, 2022).
[15] Interview with a representative of National Anti-Crisis Management, November 3, 2022.
[16] European Commission, Statement by Commissioner McGuinness on the outcomes of the first meeting of the high-level meeting on sanctions implementation. October 24, 2022; https://finance.ec.europa.eu/news/statement-commissioner-mcguinness-outcomes-first-meeting-high-level-meeting-sanctions-implementation-2022-10-24_en (accessed November 20, 2022).
[17] European Commission, Welcome to the EU Sanctions Whistleblower Tool. n.d., https://eusanctions.integrityline.com/frontpage (accessed November 26, 2022).
[18] Stanford University, The International Working Group on Russian Sanctions. n.d., https://fsi.stanford.edu/working-group-sanctions (accessed November 27, 2022).
