Reed Smith News Flashes

On 24 June 2021, the EU introduced new restrictive measures against Belarus. The measures target key sectors of the Belarusian economy and mark a step-change in EU policy, which, to date, had focused on imposing asset freezes and travel bans against those associated with President Alexander Lukashenko’s regime. Individuals and entities involved in Belarus-related business should examine their transactions and supply chains to ensure compliance.

Political tensions with Belarus have escalated over recent months following violent repression of demonstrators disputing the re-election of Lukashenko, and the forced diversion and landing in Minsk of a Ryanair flight carrying the journalist Roman Protasevich in May 2021. In response to what the EU deems to be serious human rights violations, the EU has now imposed significant restrictive measures on key sectors of the Belarusian economy.

These measures include restrictions relating to the following:

  • The sale, supply, transfer and export of equipment, technology or software intended for use in the monitoring or interception of Internet traffic and telephone communications, and dual-use goods and technologies for military use. The provision of technical assistance, brokering services, financing and financial assistance in respect of such trades is also prohibited.
  • Trade in petroleum products, potassium chloride (“potash”), and goods used for the production or manufacturing of tobacco products, though contracts for the trade of such products entered into before 25 June 2021 are exempt. The provision of technical assistance, brokering services, financing, financial assistance and insurance/re-insurance in relation to the trade in petroleum products is also restricted.
  • Access to EU capital markets through restrictions relating to certain transferable securities, money-market instruments, new loans and credit with a maturity exceeding 90 days issued after 29 June 2021 by the Belarusian government, public bodies and listed state-owned banks.
  • The provision of insurance and re-insurance to the Belarusian government and Belarusian public bodies and agencies is prohibited, while 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.

The U.S., UK, EU and Canada have in tandem imposed travel bans and asset freezes against senior-ranking officials of the Belarusian regime and key state-supporting entities over recent months. As discussed in our previous client alert, the U.S. has also terminated a number of general licenses that previously permitted transactions with some sanctioned Belarusian oil companies.1 Somewhat surprisingly, the measures imposed by the EU are the most restrictive to date.

A UK government press release from 21 June 2021 accompanying the latest round of travel bans and asset freezes suggests that the UK is likely to follow the EU’s lead in imposing measures targeting specific sectors of the Belarusian economy. Accordingly, persons with Belarusian business should evaluate their dealings and continue to monitor developments.