1 December 2022, Thursday, 0:21
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Entire Economic Spheres Can Be Paralised in Belarus

Entire Economic Spheres Can Be Paralised in Belarus

No one will mollycoddle the usurper anymore, he has been written off.

The UK and Canada have joined European sanctions adopted earlier, while the U.S. has adopted its package. Opponents of the government argue that U.S. sanctions are much tougher than European ones and can inflict a significant blow on major sectors of the economy. The U.S. sanctions, unlike the European ones, come into effect immediately and provide for the so-called secondary sanctions, Nezavisimaya Gazeta reported.

The adoption of sanctions by the U.S., the UK and Canada is timed to the anniversary of the presidential election in Belarus, which launched a major political crisis. The report of the British Foreign Office reads the maintenance of Aliaksandr Lukashenka's air fleet, as well as trade in potash, petroleum products, dual-use products and goods used in the manufacture of cigarettes, fall under the ban.

The sanctions also include a ban on lending to the Belarusian authorities, the purchase of their securities, insurance and reinsurance by state bodies. Russian businessman Mikhail Gutseriev, "providing support to the government of Belarus," also fell under the sanctions.

Canadian sanctions contain the same sectoral restrictions, as well as 72 people, including Aliaksandr Lukashenka and his son Viktar, press secretary Natallia Eismont, Information Minister Igor Lutski, heads of security agencies, judges, several businessmen close to the government and five companies. These are state enterprises MAZ, BelAZ, Belaeronavigatsia, and two private companies - Bremino Group and New Oil Company, which are owned by businessmen called "wallets" of Lukashenka - Aleksei Oleksin and Nikolai Vorobei.

It should be recalled that similar sectoral sanctions were previously adopted by the EU. Experts note that a significant drawback of the European sanctions is that they do not come into force until the already concluded contracts expire, which is at least until late this year. Furthermore, the main groups of exported potash fertilisers are excluded from the sanctions. The published information does not yet make it clear how the British sanctions will work. It is of interest because the United Kingdom is the second largest importer of Belarusian oil products after Ukraine. It accounts for 19.5% of export revenues from the sale of oil and oil products, which amounted to USD 720 million in 2020. Furthermore, the inclusion of Canada and the UK in the sanctions impedes the ability of the Belarusian authorities to find bypasses to the European sanctions.

The U.S. sanctions may be much more significant, experts say. They include the following companies: Belaruskali, Belneftegaz, Belkaztrans, Belkaztrans Ukraine, Absolutbank, Energo-Oil, New Oil Company, Dana Holdings, Dana Astra, Petrobitumen Plant, Bremino Group, Dubai Water Front, Emirates Blue Sky, Inter Tobacco, Interservice and the Grodno Tobacco Factory; four state organizations (National Olympic Committee, Department of Internal Affairs of Gomel Regional Executive Committee and Investigative Committee) and youth public association Shok Sports Club. The aforementioned businessmen Vorobei and Oleksin are also on the American list. Besides them, there is also Serbian businessman Nebojsa Karic, as well as 20 individuals, including MPs, business directors, athletes, officials and representatives of law enforcement agencies. In addition, the U.S. will adopt sectoral sanctions in the next six months. They are currently being developed.

The sanctions aim to encourage Lukashenka "to allow a fair international investigation into the causes of the Ryanair diversion, immediately release all political prisoners, stop persecuting activists and dissidents, including those abroad, and initiate a credible and inclusive political dialogue with the democratic opposition, civil society representatives, which could result in a free and fair presidential election under OSCE observation". The statement was published on the website of the White House.

Most importantly, the U.S. sanctions come into force immediately after their adoption, except for the permission to complete the relationship with Belaruskali until December 9. There are no exceptions, but secondary sanctions are implied, said the representative of democratic forces of Belarus, leader of the Popular Crisis Management, ex-minister and former diplomat Pavel Latushko, commenting on the U.S. decision. Secondary sanctions, in his opinion, are a "strong tool for a new phase of pressure on the regime".

Economist Ales Olekhnovich states that the new American sanctions will kill entire industries of the Belarusian economy, and the potash industry in the first place, which brings in 3 billion foreign currency earnings annually. "The U.S. closes the loophole remaining after the imposition of the EU sectoral sanctions. Only some codes of products, making up to 15% of Belkali production, are left there. When Europe imposed the sectoral sanctions for the first time, it was guided by the principle "do not harm yourself". Belkali products will be banned entirely because the U.S. sanctions apply to all products," he said in an interview with Nasha Niva. "No one will mollycoddle with Lukashenka anymore; he has been written off," he said confidently.

The sub-sanctioned companies won't be able not only to sell their products but also to buy equipment and generally conduct settlements in dollars, even if we are talking about cooperation with such countries as China and Russia, the experts say. In addition, Belarusian businesses, in general, will face difficulties, even if the company is not on the sanctions list, because many counterparties will find it easier to refuse cooperation with them than to try to understand whether it's possible or not.

So far, the experts find it complex to estimate Belarus' losses in numbers because a lot is unclear: such sanctions have never been imposed before. However, they believe it will be more than the 2-3% of GDP named earlier by head of government Roman Golovchenko.