Welcome to the Sanctions List!

How Dana Holdings is related to the regime.

Two months ago, EUobserver, a Brussels-based publication, published an investigation into Lukashenka-related firms operating in Cyprus. One of them is Dana Holdings, which was in the third package of EU sanctions on Belarus, which is indirect evidence of the veracity of the conclusions reached by the journalists in their investigation, The Village Belarus writes. And today, the company is on the EU sanctions lists.

Two Cypriot real estate companies - Eastleigh Trading and Dana Holdings - are linked to the dictator's daughter-in-law Lilia Lukashenka, the wife of his eldest son Viktar.

And a closer look at them sheds light on the maze of financial ties between Nicosia and Minsk.

Lukashenka's toxicity has sparkled with new colors after he began to brutally crack down on the protesters who took to the streets two months ago (already four months - ed.) after the rigged August elections.

And the EU countries, including Cyprus, agreed on October 12 to freeze his financial assets, if any. The situation worsened on the same day - Lukashenka allowed the police to use live ammunition against the demonstrators, if necessary.

The EU said it could expand sanctions if violence escalates; for example, it could extend to business oligarchs who enriched the dictator, an EU source said.

"The sanctions have a very broad legal basis, and there are literally thousands of names that can be added to them," the source said.

Family business

Lilia Lukashenka was appointed director of Eastleigh Trading by Viachaslau Dudkin, the former head of the anti-corruption department of the Ministry of Internal Affairs of Belarus, who fled the country and gave an interview to the Russian newspaper Kommersant in 2012.

Dudkin said that Lilia Lukashenka and the owner of Eastleigh Trading, Belarusian oligarch Uladzimir Peftsieu, used the firm in fraudulent schemes.

Peftsieu was included in the EU sanctions list in 2011 because he was "a key financial sponsor of the Lukashenka regime."

Lilia Lukashenka currently runs an art gallery in the Dana Holdings group shopping center in Minsk.

But when EUobserver asked if Lilia Lukashenka is an artist, Valery Tsapkala, who ran for the presidency of Belarus, replied: "The art that she knows perfectly well is making money on him [Aliaksandr Lukashenka], making huge concessions to his enterprises-pets."

Eastleigh Trading was still active in 2019, according to its Cypriot corporate files. And its "main activities" were "the activities of a holding company and the purchase, reconstruction, and provision of real estate in Belarus," according to the 2013 audit. The company's shares were owned "exclusively by non-residents" in Cyprus and were directed by a Cypriot financial services firm called Centaur, which does not return calls, according to the audit.

Meanwhile, Dana Holdings group has its headquarters in Minsk and is run by two Serbs - Bojan and Nebojsa Karic, the offspring of the Belgrade business dynasty Karic, with whom Aliaksandr Lukashenka has had friendly ties for many years.

Lilia Lukashenka has also been named a "senior employee" at Dana Holdings subsidiary Dana Astra in 2017 Belarusian financial statements.

The Cyprus branch of this company has not been very active in business lately, judging by the documents, but Nebojsa Karic, who indicated to the Palm Jumeirah island in Dubai, where Aliaksandr Lukashenka often visits, was one of its main shareholders in 2019.

Over the past few years, Dana Holdings has received a number of contracts for the construction of luxury apartments in Minsk. The company was also noticed on the list of those who expressed support for Lukashenka at a time when others were on strike in solidarity with the protesters.

But Dana Holdings denies the accusations.

"This statement is categorically false. Dana Holdings received a building permit through open, competitive processes, in strict accordance with Belarusian legislation," a representative of Dana Holdings of the London and Moscow PR agency EM said.

Dana Holdings also tried to distance itself from Lilia Lukashenka, stating that she was just a designer and did not return to work at Dana Astra after she went on maternity leave three years ago.

Financial labyrinths

The Minsk-Nicosia-Belgrade-Dubai chain sheds light on some of the confusing financial flows between Belarus and the EU. And Cyprus would have to stop (freeze) its activities if it wanted to really sort out its financial relations with Belarus. According to the documents, this small island attracts more foreign investment to Belarus than any other EU country.

Close ties stem from the 1998 Double Taxation Treaty, which allows Belarusian firms to benefit from lower Cypriot taxes through offshore shell subsidiaries (this is an officially registered company that exists only formally - ed.).

According to Belarusian statistics, tax benefits, in the best years, for example, in 2013, amounted to € 1 billion per year.

Some large Belarusian companies have also invested in Cyprus.

According to the annual report, the headquarters of the Belarusian IT firm Asbis, whose revenue is € 1.6 billion, is located in the Cyprus city of Limassol.

The headquarters of Wargaming Group, a Belarusian video game company valued by the American news agency Bloomberg at € 1.3 billion, is located in a glass tower in the Cypriot capital. Wargaming Group bought the largest part (20 percent) of the second-largest lender of Cyprus - Hellenic Bank, according to Cypriot media.

And at least 19 Belarusians, including businessmen and their families, also acquired Cypriot passports between 2017 and 2019, Al Jazeera EUobserver news agency reported, based on leaked Cypriot files.

"Wargaming Group has become very influential in Nicosia," a former Cypriot Central Bank employee told EUobserver.

But for the Cypriot Ministry of Finance, there was nothing reprehensible in this situation. "Financial flows from Cyprus to Belarus are limited," the ministry's website says. "There are no other Belarusian investors [except Wargaming Group] in the Cypriot banking system," he added.

"It should be noted that Cyprus is an international business and financial center with an extensive network of agreements on the avoidance of double taxation. Since this is the case, FDI [foreign direct investment] flows to other jurisdictions are common," the website also says.

The ministry declined to say whether it knows of any firms associated with Lukashenka on its territory.

The ministry also declined to say whether they froze any Belarusian assets the last time the EU imposed sanctions against people like Lukashenka and Peftsieu between 2011 and 2016.

According to Tsapkala, who before joining the opposition ran the HTP in Minsk, Lukashenka could have laundered "more than $ 1 billion (€ 850 million)" thanks to Cypriot firms.

Deep pocket

It is not easy even for EU officials to penetrate the non-transparent Belarusian structures.

Peftsieu, for example, most recently won a landmark case in an EU court in Luxembourg in 2014, which said the EU Council was unable to gather enough evidence to list him.

And it is also difficult for journalists to shed light on this story. When EUobserver asked where Peftsieu now lives and whether he is still associated with Eastleigh Trading, his Minsk-based law firm Revera declined to respond and threatened to sue the site if it mentions his previous EU asset freeze.

"To create an image (probably, of Peftsieu - ed.) contrary to the decision of the Court of General Jurisdiction of the EU is wrong, misleading, and causes great damage," a representative of the law firm Dmitry Archipenko said by e-mail.

Peftsieu and his wife Volha Makarenka used to live in Malta, and Volha Makarenka also set up 12 companies in the British Virgin Islands while he was still under EU sanctions under the so-called Panama Papers.

But "we do not give you [EUobserver] the right to publish any information about Mr. Peftsieu or his family members," Archipenko said.

"Mr. Peftsieu has not visited Belarus for many years, does not conduct any business, neither in Belarus nor in the EU, does not own any shares in European companies and, according to my information, is currently writing books," Archipenko also said.