EThe European Union has agreed on the introduction of sectoral sanctions against Belarus. They affect the oil sector, the production of potassium chloride, and also restrict access to European capital markets.
The European Union has imposed sectoral sanctions against certain sectors of the Belarusian economy, organizations and individuals. This is stated in the statement of the EU Council, published on June 24.
The sanctions affect the oil sector, the production of potassium chloride, and also restrict access to European capital markets.
“The Council today introduced new restrictive measures against the Belarusian regime in response to the escalation of serious human rights violations in Belarus, brutal repression against civil society, the democratic opposition and journalists, as well as the forced landing of a Ryanair plane in Minsk on May 23 and the related detention of journalists Roman Protasevich and Sofia Sapieha,” the report says.
Sectoral sanctions against Belarus suggest:
- Prohibition on the sale, supply or transfer of equipment, software and technologies for monitoring, as well as interception of telephone communications and the Internet.
- A ban on the sale, supply or transfer of dual-use goods that can be used by Minsk for military purposes.
- Prohibition of trade with Belarusian producers of petroleum products and potash fertilizers, as well as goods for the production of tobacco products.
- Restriction of access to the EU capital markets, insurance and reinsurance of the Belarusian government, state bodies.
- A ban on financing projects of the Belarusian public sector by the European Investment Bank. EU member states should limit the participation of their banks in Belarusian state projects.
- European organizations are prohibited from using financial instruments, investment services and transferable securities of Belarusbank, Belinvestbank and Belagroprombank.
In 2020, Belarus ‘ exports to the EU countries amounted to $5.5 billion, according to the data of the National Statistical Committee of Belarus (Belstat). This is 19% of the total export of goods of the republic and 49% of its exports to countries outside the CIS. The volume of accumulated foreign direct investment (FDI) of the EU in Belarus as of 2019 amounted to 3.2 billion euros, according to the data of the European Commission.
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Belarus has government Eurobonds in circulation in the amount of about $3.3 billion with maturities in 2023 & ndash;2031 (about 18% of the country’s total external public debt). Some Western investors have already sold off these bonds, citing reputational costs and incompatibility with the principles of ESG (environmental, social and corporate Responsibility), Reuters reported in June. However, according to Reuters, Belarusian sovereign notes are still in the portfolios of such European holders as UBS (Switzerland), NN IP (the Netherlands), Aberdeen Standard Investments (Great Britain).
Until recently, European multilateral institutions also continued to allocate small loan funds to Minsk. As of March 31, 2020, Belarus ‘ debt to the European Bank for Reconstruction and Development (EBRD) and the Northern Investment Bank of the Scandinavian and Baltic Countries amounted to $110 million, according to last year’s prospectus of Belarusian Eurobonds. In addition, last year the European Investment Bank (EIB) approved the provision of a loan to Belarus for €15 million to support the healthcare system.
According to the Comtrade international database, in 2020, the EU countries imported potash fertilizers from Belarus for $206 million. Including Poland & mdash; for $77.6 million, Belgium & mdash; for $49 million. Potassium is also part of the Belarusian complex fertilizers (NPK), one of the elements of which is potassium, the import of such fertilizers to the EU from Belarus amounted to another $116 million, it follows from the Comtrade database.
The export of tobacco products from Belarus has been classified since 2016 (as well as the supply of weapons, radioactive elements, and precious metals). But, according to Eurostat, in 2020, the import of tobacco and beverages from Belarus amounted to only 19 million euros.The import of petroleum products from Belarus to the EU countries in 2020 amounted to $289.5 million (including $85 million to Poland, $142 million to the Baltic states).