In response to the forced landing of a Ryanair passenger jet and the arrest of a dissident journalist, the U.S. reinstated sanctions on nine state-owned enterprises in Belarus, including nitrogen fertilizer producer Grodno Azot OAO, along with Belarusian Oil Trade House, Belneftekhim, Belneftekhim USA, Belshina OAO, Grodno Khimvolokno OAO, Lakookraska OAO, Naftan OAO, and Polotsk Steklovolokno OAO.
The list, however, does not include potash producer Belaruskali and marketer Belarusian Potash Co. (BPC).
U.S. sanctions were first imposed against Belarus in 2006, and the State Concern for Oil and Chemistry (Belneftekhim), a large, state-owned petrochemical conglomerate, was named as a Specially Designated National (SDN) in 2007. U.S. businesses, citizens, and green card holders were prohibited from doing business with sanctioned entities, and until 2014, Belaruskali was part of the Belneftekhim Concern and had ceased exports of potash under the sanctions.
However, in February 2014, Belarus President Alexander Lukashenko’s government performed a corporate restructuring, moving Belaruskali out from under the Belneftekhim umbrella. As a result of the corporate spinoff, Belarus began shipping potash to the U.S. (GM July 20, 2015).
A bipartisan group of eight U.S. Representatives in 2015 introduced legislation in the U.S. House that sought to reinforce U.S. sanctions against Belarus, designating Belaruskali and BPC as SDN’s and subject to sanctions. However, the bill did not advance.
In the meantime, E.U. foreign ministers are looking at targeted economic sanctions against Belarus. The potash and oil sectors are looking to be likely targets, with reports the economic sanctions could be in place by this summer.
Potash is Belarus’s second top export after refined oil products. BPC has said if the E.U. were to impose sanctions preventing European companies from trading with the Belarus potash industry, Belarus could still be able to divert potash volumes from Europe to other markets, primarily Asia (GM May 28, p. 1). Belarus supplies about 25 percent of the European region’s potash demand, according to BPC.
The E.U. already has sanctions in place against seven Belarusian entities and 88 individuals, including Lukashenko, imposed following the disputed presidential election on Aug. 9 and the regime’s subsequent brutal crackdown on protests and protestors (GM Aug. 21, 2020).
E.U. ministers last week moved to expand the sanctions list against Belarus officials to include officials known or suspected to have been involved in the forced landing of the plane, as well as sanctions against the country’s national airline Belavia.
According to a Bloomberg report late on June 3, citing unnamed diplomatic sources, the E.U. on June 4 is expected to sign off on a ban on Belarusian carriers flying over European airspace, as well as a ban on their landing and taking off from the bloc’s airports. The ban, if approved, could come into force as early as midnight on June 4.
The Belarusian government believes that Western sanctions do not present a threat to the country’s economy, according to a report by Belarus’ state-run national news agency, BelTA, citing a statement by the country’s Prime Minister Roman Golovchenko. The PM made the statement after President Lukashenko hosted a government conference on June 1 to discuss cooperation with Russia.
Commenting on the situation with proposed further sanctions against Belarus, Golovchenko was cited by the report as saying, “logic is absent so much that it is difficult to make projections for now.”
Cited by the report, he said Belarus “is ready for various sequences of events and is confident that the Belarusian economy will not just survive and overcome them, but will get a new incentive in order to actively work on other markets.
“Because the world is not limited to the European region or the North American one. We have the huge Asian and Eastern markets before us,” said Golovchenko.