The fourth package of sanctions against Belarus. The main thing

The European Union imposed new sanctions on Belarus: 78 people and eight companies were included in the sanctions list.Among them are people from the inner circle of President ALEXANDER LUKASHENKO and Russian businessman Mikhail Gutseriev.

The Council of the European Union on June 21 finally adopted the fourth package of restrictive measures against Belarus. Eight legal entities and 78 individuals fell under them, mostly Belarusian citizens, but there are also Russians among them, in particular businessman Mikhail Gutseriev.

This decision, according to a statement from the Council of the EU, was made due to the increase in cases of serious human rights violations in Belarus and "brutal repression against civil society, democratic opposition and journalists." The purpose of the measures taken, as indicated in the decision of the council, is to put pressure on the political leadership of Belarus so that it starts a “genuine and comprehensive dialogue” with society and stops repression.

The statement stipulates that seven individuals and one legal entity were included in the list in this new round of restrictive measures due to the “forced and illegal landing of a Ryanair aircraft in Minsk” on May 23 this year and the detention of the former editor-in-chief of the Nexta TELEGRAM channel Roman Protasevich and his girlfriends, Russians Sofia Sapieha. This incident endangered aviation security, the decision states.

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Among those included in the list are also several businessmen who "support the Lukashenka regime and benefit from it." “These sanctions send another strong signal to regime supporters that their continued support of Alexander Lukashenko comes at a cost,” the EU said in a statement.

EU restrictive measures against Belarus now apply to a total of 166 individuals and 15 legal entities. The assets of these individuals are subject to a freeze, and EU citizens and companies are prohibited from providing funds to those on the list. Individuals are additionally also subject to an entry ban that prevents them from entering or transiting through EU territory.

On the day of the announcement of European sanctions, the price of Eurobonds of Belarus on the Frankfurt Stock Exchange with maturity in 2031 fell to 85% of the face value, by 6.13 percentage points compared to the previous trading day, the yield on them rose to 8.89%. At the same time, there was no sharp decline in the Belarusian ruble - by 21:00 Moscow time in international trading it was losing 0.7% against the DOLLAR and 1% against the euro.

Who is on the new list

About 50 people from the new list are Belarusian judges and prosecutors who pass sentences on cases of protests, as well as against journalists. In connection with the forced landing of the Ryanair aircraft, Defense Minister Viktor Khrenin, Air Force Commander and Chief of the General Staff, Transport Minister Alexei Avramenko and several other people were subject to restrictions. For the expulsion of students who participated in the rallies, three rectors of state universities were included in the list. Six deputies of the Belarusian parliament were also sanctioned, including Oleg Gaidukevich from the Committee on International Affairs.

The European Union also imposed sanctions against members of the family of President Alexander Lukashenko. He himself was on the sanctions list earlier, like his eldest son Viktor, who heads the national Olympic Committee. On June 21, the EU also added Viktor's wife, Lilia Lukashenko, to the list. As stated in the EU decision, it is associated with companies such as Dana Holdings / Dana Astra and the Belkhudozhpromysly concern. The Belarusian media call the Serbs Bogoliub and Dragomir Karich as the owners of Dana Holdings. The company is implementing large development projects in MINSK and is already under sanctions.

The middle son of the president, Dmitry Lukashenko, also fell under the sanctions. He is the chairman of the presidential sports club and through him conducts business and controls several enterprises, from which he benefits, according to the EU materials.

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The list includes several influential Belarusian businessmen and their companies. Among them is the DIRECTOR of Synesis Alexander Shatrov. He is responsible for the company's decision to grant authorities access to the Kipod platform, which analyzes video and recognizes faces. Other Shatrov companies have government contracts, the EU decision states. Another person involved, the owner of the Belglobalstart company, Sergei Teterin, was named one of the country's leading entrepreneurs, who is part of Lukashenka's close circle. Teterin is engaged in the distribution of alcoholic beverages, products, furniture, and heads the tennis federation. One of the most closed businessmen in Belarus, Aleksey Oleksin, also fell under sanctions. According to Brussels, he has a close relationship with Lukashenka and his son Viktor. The Oleksina company owns, among other things, the Alexandria 2 complex,

Among the companies that fell under the sanctions are Logex, a customs broker engaged in the transportation of goods to RUSSIA and Asia, the New Oil Company, a business of Nikolai Voroby, which specializes in the sale of petroleum products produced by the Naftan refinery, and the UAE-registered company Sohra, which exports trucks and tractors. , building materials and potash fertilizers.

Why Gutseriev was sanctioned

The EU Council explained the imposition of sanctions against Russian businessman Mikhail Gutseriev as follows: “Mikhail Gutseriev is a well-known Russian businessman with business interests in Belarus in the energy, potash and other sectors. He is a longtime friend of Alexander Lukashenko and through this has amassed significant wealth and influence in the political elite of Belarus. "Safmar" - a company controlled by Gutseriev, was the only Russian oil company ("Safmar" - a holding, which includes oil companies. -), which during the energy crisis between Belarus and Russia in early 2020 supplied raw materials to Belarusian refineries ".

As Gutseriev said, his business in Belarus began with the construction of gas stations and oil depots, the modernization of refineries. Now Safmar receives oil products from processing at Belarusian refineries and sells them to Belarusian gas stations of Russian companies. In 2011, GCM Global Energy plc, owned by Gutseriev, signed an investment agreement with Belarus on the creation of the second largest fertilizer production there, the Nezhinsky GOK. The operator of the project is Slavkaliy registered in Belarus, which is part of the Safmar group.

Shares of companies owned by the Gutseriev family reacted to the billionaire being on the sanctions list with a decrease. For example, the shares of the retailer of household appliances and electronics M.Video on the Moscow Exchange in the first minutes after the announcement of sanctions fell by more than 4%, to 612 rubles. per share (the paper ended the main trading session, losing 4.48% to the closing level on Friday, June 18). According to the reporting of the M.Video-Eldorado retailer, the ultimate beneficial owner of the company is not Mikhail Gutseriev himself, but his son Said.

Other assets of the Gutserievs traded on the stock exchange also showed negative dynamics. Safmar Financial Investments, which combines the logistics and financial assets of the Safmar family holding, completed the main trades, losing 1.45%, and the oil company RussNeft - almost 1%.

What effect will the sanctions have?

Previously, the European Union focused sanctions on individuals, but now the list includes enterprises that are important for the entire Belarusian economy, said Ivan Timofeev, associate professor at MGIMO, program director of the Valdai Club Foundation. “Measures against enterprises are a serious step that is in line with the approach of the United States , which previously refused to renew the license for transactions for nine Belarusian companies,” the RBC expert said.

“The goal of Brussels’ actions since August last year is to force the Belarusian authorities to stop the repressions, cancel the repressive decisions and release political prisoners, as well as force the authorities to dialogue. Based on last year’s experience and three decades of sanctions before that, we can confidently say that nothing will be achieved,” said Yevgeny Preygerman, director of the Minsk Dialogue Council on Foreign Relations. Sanctions are hurting, destroying the infrastructure of Belarus' relations with the EU, but as long as Minsk retains Russia's support, there will be no change, he adds.

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An important factor that pushed the US and the EU to take more decisive action against Belarus was the rapprochement between Minsk and Moscow after the elections in 2020, Timofeev said. In his opinion, Moscow is able to provide Belarus with direct financial assistance in order to overcome the damage from the sanctions. Perhaps the more important issue is to provide the infrastructure to service transactions between Russian and Belarusian enterprises. “The question of creating such an infrastructure at the level of the Union State can be raised. This may require the transfer of settlements to rubles and national currencies, if many Belarusian companies are denied access to transactions in euros and dollars,” the expert concluded.

The European Union has long shied away from imposing tough sanctions against Belarus, but could not ignore the incident with the forced landing of a Ryanair flight, Arkady Moshes, director of the research program for the EU's Eastern Neighborhood and Russia at the Finnish Institute of International Relations, told RBC. “For ten months, the European Union endured the ongoing repressions in Belarus and the presence of a large number of political prisoners in the country, but in Europe they could not help but react to the action with the landing of a flight heading from one country of the union to another - this simply would not correspond to the ambitions of the EU as a serious regional and global player,” the expert says.

Although the EU has previously included a wide list of the Belarusian elite in the sanctions lists, for example, after the elections in 2010, the restrictions introduced now against enterprises can seriously hit the economy of the republic, Moshes noted. The damage to Belarus from the sanctions will depend, firstly, on what share of exports to the EU will be affected by the restrictions, and secondly, on Russia's ability to compensate for the economic losses of Minsk, he believes.

According to Moshes, the sanctions will have a moderate impact on the domestic politics of Belarus. A wide community of dissatisfied with the regime has already formed in the republic, and these people do not need to prove that the course of the authorities is wrong, the expert believes. “If we talk about Lukashenka's supporters, then some of these people are ready to go all the way and rally around the leader. But the other part - inert adherents of the regime - can distance themselves from it, realizing that the continuation of the current situation threatens with serious economic losses and a deterioration in their standard of living, ”summed up Moshes.

Restrictions on companies should not have a global effect on the economy, rather they will affect the owners and employees of companies, Lev Lvovsky, a senior researcher at the BEROC Center for Economic Research, told Tut.by.

On June 21, the Belarusian sanctions lists were also expanded by the usa, CANADA, Great Britain. The United States, in particular, extended sanctions to the Belarusian KGB, internal troops, the Internal Affairs Directorate of the Brest Regional Executive Committee, and the detention center at Akrestsina.

EU candidate countries - North Macedonia, Montenegro, Serbia and Albania, as well as Iceland, Liechtenstein and Norway - have joined the ban for Belarusian air carriers on the use of EU airspace and airports.