Overview
On August 9, 2021, the United States, United Kingdom and Canada announced further coordinated sanctions to mark one year since the allegedly fraudulent 2020 Belarusian presidential election in response to the continued undermining of democracy and human rights violations by the Lukashenko regime. The new sanctions follow the imposition by the United States, United Kingdom, European Union and Canada, on June 21, 2021, of targeted financial sanctions against dozens of individuals and entities as well as EU sectoral-style sanctions against certain sectors of the Belarusian economy, as discussed in our June 28, 2021 blog post.
New US Sanctions
The US measures include a new executive order (“EO”), 44 new additions to the Specially Designated Nationals and Blocked Persons List (“SDN List”), a new general license (“GL”) and three new frequently asked questions (“FAQs”) regarding those measures.
New EO
The new EO 14038 is entitled “Blocking Property of Additional Persons Contributing to the Situation in Belarus” and contains a number of notable measures. First, the EO expands the category of persons who may be designated by the Secretary of the Treasury as an SDN to include, among others, persons determined to be responsible for or complicit in, or to have directly or indirectly engaged or attempted to engage in:
- actions or policies that threaten the peace, security, stability, or territorial integrity of Belarus;
- actions or policies that prohibit, limit, or penalize the exercise of human rights and fundamental freedoms (including freedoms of expression, peaceful assembly, association, religion or belief and movement) by individuals in Belarus, or that limit access to the internet or print, online, or broadcast media in Belarus;
- electoral fraud or other actions or policies that undermined the electoral process in a Republic of Belarus election;
- deceptive or structured transactions or dealings to circumvent any US sanctions by or for or on behalf of, or for the benefit of, directly or indirectly, the Government of Belarus or any person whose property and interests in property are blocked pursuant to EO 14038 or Executive Order 13405 (Blocking Property of Certain Persons Undermining Democratic Processes or Institutions in Belarus); and
- public corruption.
- to be a leader, official, senior executive officer, or member of the board of directors of an entity engaged in the above activities, certain activities enumerated in EO 13405, or which is blocked under EO 14038 or EO 13405;
- to be a political subdivision, agency, or instrumentality of the Government of Belarus;
- to be or have been a leader or official of the Government of Belarus;
- to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any activity described above or any person designated pursuant to EO 14038; and
- to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, the Government of Belarus or any person designated pursuant to EO 14038.
- the defense and related materiel sector;
- security sector;
- energy sector;
- potassium chloride (“potash”) sector;
- tobacco products sector;
- construction sector;
- transportation sector; or
- any other sector of the Belarus economy as may be determined by the Secretary of the Treasury.
- exporting, making available, supplying and delivering or transferring items that could be used for the interception or monitoring of telecommunications (as specified in Schedule 2A, Amended UK Regulations) in Belarus, as well as related provision of technical assistance, financial services, funds and brokering services. This prohibition also covers interception and monitoring services to – or for the benefit of – the Government of Belarus;
- exporting, making available, supplying and delivering or transferring dual-use items that are for use by the Belarusian military, any other military end-user or for any military use, as well as related provision of technical assistance, financial services, funds and brokering services;
- importing, acquiring or supplying and delivering potash (as specified in Schedule 2B, Amended UK Regulations) originating in – or consigned from – Belarus;
- importing, acquiring or supplying and delivering petroleum products (as specified in Schedule 2B, Amended UK Regulations) originating in – or consigned from – Belarus, as well as the provision of technical assistance, financial services, funds and brokering services related to the acquisition or supply and delivery of these items;
- exporting, making available or supplying and delivering specified goods used for the production or manufacture of tobacco industry products (as specified in Schedule 2B, Amended UK Regulations) to or for use in Belarus; and
- the provision of technical assistance related to aircraft when this is provided to or for the benefit of eight designated persons identified in the Foreign, Commonwealth and Development Office’s August 9, press release. The Republic of Belarus sanctions: guidance (“UK Statutory Guidance”) identifies the following eight aircraft that – as of August 9, 2021 – the UK government considers relevant to this prohibition:
- Gulfstream G550 – Registration number: EW-001PJ;
- Boeing 767-300 – Registration number: EW-001PB;
- Boeing 737-800 – Registration number: EW-001PA;
- Mil Mi-8 helicopter – Registration number: EW-002DA;
- Mil Mi-8 helicopter – Registration number: EW-001DA;
- AgustaWestland AW-139 helicopter – Registration number: EW-001PH;
- Embraer ERJ-135BJ Legacy – Registration number: P4-MSG; and
- Bombardier BD-700 1A10 Global Express XRS – Registration number: P4-GMS.
- prohibitions on providing insurance and re-insurance services to: (1) Belarus; (2) a Belarusian authority; (3) an entity that is wholly owned by Belarus or a Belarusian authority; or (4) those acting on behalf of – or at the direction of – any of the foregoing persons; and
- restrictions on access to UK capital markets for: (1) Belarus; (2) a Belarusian authority; (3) entities that are wholly owned by Belarus or a Belarusian authority; (4) credit or financial institutions that are majority owned by Belarus or a Belarusian authority and those non-UK entities majority owned by such institutions; and (5) those acting on behalf of – or at the direction of – the aforementioned institutions. These restrictions target direct or indirect:
- dealings with transferable securities or money-market instruments (excluding instruments of payment) issued after noon British Summer Time on August 9, 2021 with a maturity exceeding 90 days; and
- new loans or credit arrangements with a maturity exceeding 90 days.
- public bodies and agencies subordinate to the President of Belarus, including the Administration of the President of Belarus and the Committee of State Control;
- the Council of Ministers of Belarus and each of its members;
- any Ministry of the Government of Belarus;
- any public body, agency or state concern subordinate to the Council of Ministers of Belarus;
- any State Committee of Belarus;
- the National Bank of Belarus; and
- any local government body of Belarus, including the Councils of Deputies and Executive Committees.
- dealing in transferable securities and money market instruments, including treasury bills, certificates of deposit and commercial papers but not including instruments of payment, issued by specific entities or individuals identified in the Canadian Regulations;
- transacting in, provide financing for or otherwise dealing in debt of longer than 90 days’ maturity, including bonds, loans, debentures, extensions of credit, loan guarantees, letters of credit, bank drafts, bankers’ acceptances, discount notes, treasury bills, commercial paper and other similar instruments in relation to specific entities or individuals identified in the Canadian Regulations;
- providing insurance or reinsurance to specific entities or individuals identified in the Canadian Regulations;
- importing, purchasing, acquiring, shipping or otherwise dealing in any petroleum goods referred to in Part 1 of Schedule 2 of the Canadian Regulations, wherever situated, that is exported from Belarus, as well as providing any financial, technical or other services such as insurance or reinsurance related to goods subject to this prohibition; and
- importing, purchasing, acquiring, shipping or otherwise dealing in any potassium chloride goods referred to in Part 2 of Schedule 2 of the Canadian Regulations, wherever situated, that is exported from Belarus.