Economist: The U.S. Sanctions Will Cause Painful Effect of Secondary Sanctions

The U.S. sanctions against Lukashenka have one remarkable feature.

Last week, the United States announced the intention to restore the previously cancelled unilateral sanctions against nine Belarusian enterprises. They are Belneftekhim, Belshina, Grodno Azot, Grodno Khimvolokno, Lakokraska, Naftan, Polotsk-Steklovolokno, Belarusian Oil Trading House and Belneftekhim USA.

U.S. businesses and citizens will be forbidden to enter into economic and financial relations with these enterprises, and all their property and accounts in the U.S. will be frozen.

Vadim Iosub, a senior analyst at Alpari Eurasia, said in a commentary to udf that the U.S. sanctions situation was a "paradox."

"U.S. sanctions will affect large enterprises that play a prominent role for the budget. In the meantime, I think these businesses don't have a lot of shipments from and to the U.S. Due to the low turnover, the damage may not be very significant," Iosub said.

However, there is a big "but."

"Some U.S. sanctions lead to so-called secondary sanctions. The main intrigue is whether European companies can cooperate with sanctioned Belarusian companies and whether non-U.S. banks can cooperate with Belarusian companies. If there is an effect of secondary sanctions, the damage may be painful," says Iosub.