Belarus Sanctions: UK imposes new economic sanctions on Belarus

• United Kingdom

• Financial services disputes and investigations
• Litigation and dispute management

16-08-2021

On 9 August 2021, the UK imposed a raft of new economic sanctions in respect of the Belarusian regime, one year since the disputed presidential elections. The package of aviation, trade and financial sanctions has been introduced through amendment to the Republic of Belarus (Sanctions)(EU Exit) Regulations 2019 in response to the Lukashenko regime’s continued efforts to undermine democracy and commit human rights violations. The US and Canada also announced new sanctions measures on the same day. 

These further sanctions follow on from designations that the UK imposed on 21 June 2021, as part of a unified foreign policy effort from the UK, Canada, the US and the EU. For more information about these designations, see our previous briefing here.

Along with previous designations in response to the detention of journalist Roman Protasevich and Sofia Sapega following the unlawful diversion of Ryanair flight FR4978 in May 2021, the new measures represent a significant additional step in placing pressure on the regime. The sanctions are carefully targeted towards Lukashenko, state institutions and those around him, to pressure a change in behaviour, whilst aiming to, as far as possible, minimise any unintended consequences for the Belarusian population.

We have summarised the key features of the new economic sanctions. In light of these measures and the current dynamic nature of this space, businesses should consider whether it would be appropriate to carefully review transactions and supply chains for any, direct or indirect, Belarusian-nexus to ensure compliance, specifically those operating in the affected sectors.

UK Sanctions and Trade Restrictions

The comprehensive sanctions package includes:

• aviation measures preventing Belarusian air carriers from flying over or landing in the UK and prohibiting the provision of technical assistance to President Lukashenko’s fleet of luxury aircraft;

 The Aviation-related technical assistance restrictive measures also apply to an additional seven designated individuals (listed below). Moreover, statutory guidance is being amended to confirm that there is a presumption that technical assistance relating to certain aircraft (also listed below) would be for the benefit of such designated persons:

-        Alexander Lukashenko

-        Viktor Lukashenko

-        Igor Sergeenko

-        Ivan Tertel

-        Viktor Khrenin

-        Natalia Eismont

-        Ivan Kubrakov

-        Mikhail Gutseriev

-        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

-        Bombardier BD-700 1A10 Global Express XRS - Registration number: P4-GMS

• trade measures on potash, petroleum products, interception and monitoring goods and technology, goods used in cigarette manufacturing, and dual-use goods and technology to reduce revenue flowing into the regime, and to limit the regime’s access to items which could enable it to repress the Belarusian population. Notably missing from the UK sanctions in respect of potash and petroleum products is a ‘grandfathering’ provision. Pursuant to the EU sanctions, the prohibitions did not apply to any contracts executed before 25 June 2021, or to ancillary contracts necessary for the execution of such contracts. As ‘grandfathering’ is not permitted under the UK restrictions on potash and petroleum products, businesses should carefully consider whether they have any existing contracts, including term deals, that might be impacted; and

• financial measures prohibiting the direct or indirect purchase of transferable securities and money-market instruments issued by Belarus, Belarusian authorities, an entity wholly owned by Belarus or a Belarusian authority, a credit or financial institution majority owned by Belarus or a Belarusian authority, an entity incorporated or constituted under the law of any country other than the UK and majority owned by a Belarusian credit or financial institution, or anyone acting on behalf of or at the direction of a Belarusian credit or financial institution, or entities majority owned by such credit or financial institutions. The measures also prohibit a person from directly or indirectly granting a loan or credit, or entering into any arrangement with any of the above persons or institutions.

The package also includes a prohibition on the provision of insurance and reinsurance to Belarus, Belarusian state bodies, an entity wholly owned by Belarus or a Belarusian authority and anyone acting on their behalf or at their direction. This prohibition does not apply, however, to persons who are in charge of a ship or aircraft and are temporarily acting at the direction of the Belarusian authorities for certain specified purposes. Further, changes have also been made to UK foreign policy to further tighten the existing arms embargo.

It is a criminal offence to contravene any of the sanctions, as well as to enable or facilitate the contravention of or to circumvent any of the prohibitions in the regulations.

Designations

As noted above, the UK government has also designated Mikhail Gutseriev. Mr Gutseriev is a prominent Russian businessman, a long standing associate of Lukashenko and one of the main private investors in Belarus. The sanctions imposed on him include an asset freeze, travel ban and technical assistance relating to aircraft. These have been imposed because Mr Gusteriev is understood to have provided support to the Belarusian Government, for example, through use of his business interests.

How can Eversheds Sutherland help?

If you would like further guidance on Sanctions please visit our latest Sanctions guide here or please get in touch with the contact details provided below.