EU Lifts Most Sanctions Against Belarus, Next Steps for US Unclear

Maury Shenk, Guy Soussan, Anthony Rapa, and Edward Krauland
February 17, 2016
Steptoe International Compliance Blog  

The Council of the European Union announced on February 15 that it has decided to permanently lift an asset freeze on most persons and entities under the EU’s Belarus sanctions program.  The decision applies to 170 individuals (including Belarus’ president Alexander Lukashenko) and three entities, all of whom were subject to a 4-month suspension of sanctions adopted in October 2015 (and due to expire at the end of February).  The EU will maintain sanctions against four individuals believed to be directly associated with the disappearance of Lukashenko's political opponents, as well as an arms embargo on Belarus.  We expect the Council to adopt legislation imminently to implement these decisions.

The United States, as we previously advised, issued a general license in October 2015 that permits US persons to engage in transactions with the following nine entities, or any entities that they directly or indirectly own 50 percent or more, individually or in the aggregate:

  • Belarusian Oil Trade House
  • Belneftekhim
  • Belneftekhim USA, Inc.
  • Belshina OAO
  • Grodno Azot OAO
  • Grodno Khimvolokno OAO
  • Lakokraska OAO
  • Naftan OAO
  • Polotsk Steklovolokno OAO

The US general license will remain in effect through April 30, 2016, unless extended or revoked.  It seems likely that the United States will continue the sanctions relief in effect.  However, despite the February 15 EU announcement, it is not clear whether the United States will issue permanent sanctions relief in concert with the EU position, or if it will extend the general license for a defined period of time.

The February 15, 2016 decision of the EU to largely lift its sanctions against Belarus with some exceptions, and the US Government’s previous issuance of a general license valid through April 30, 2016 reflect some positive actions by the Lukashenko administration, including the release of all political prisoners in August 2015 and improved conduct of presidential elections, without violence, in October 2015.  And more practically, the apparent desire of President Lukashenko to position Belarus somewhere between Vladimir Putin’s Russia and the EU has made improved relations with Belarus politically expedient for the EU and US.

We will continue to monitor developments related to Belarus sanctions.  If you have any questions about these issues, please contact Maury Shenk at +44 20 7367 8050 in our London office, Guy Soussan at +32 2 626 0535 in our Brussels office, or Anthony Rapa at +1 202 429 8120 and Ed Krauland at +1 202 429 8083 in our Washington office.  You can also follow us on Twitter (@SteptoeIntlReg).  Further commentary is available on the Steptoe International Compliance blog.