EU strengthens sanctions compliance while US considers Belarusian transit of Ukrainian grain
On 30 May, the European Council agreed on its sixth package of sanctions against Russia and pledged to increase its pressure against Belarus. On the other side of the Atlantic, US and UN representatives suggested temporarily relieving sanctions against Belarus in exchange for transporting Ukrainian grain that is being blockaded at Black Sea ports.
This suggestion represents a u-turn in US policy towards Belarus and puts the EU in a difficult position. The EU has adopted unprecedented measures against both Belarus and Russia following the Russian aggression against Ukraine. At present, the EU is trying to improve its sanctions compliance mechanisms.
Although the “sanctions relief for grain” transaction could in principle help to alleviate hunger and even famine in parts of Africa, this may also undermine the integrity of Europe’s sanctions policy towards the Belarusian regime, which continues to commit gross human rights violations and to provide a base for Russia’s aggression against Ukraine.
Sanctions as a “natural habitat” for the Belarus regime
In the past, EU-Belarus relations had a cyclical nature, with periods of sanctions and deteriorating bilateral cooperation — 1997-1999, 2004-2008, 2011-2015 — interspersed with the restoration of dialogue. The EU has adopted sanctions in response to every significant election or referendum marked by serious fundamental rights violations in the country except for the 2001 and 2015 presidential elections.
A graph illustrating the cyclical nature of EU sanctions. Source: From Sanctions to Summits: Belarus after the Ukraine Crisis.
Following the fraudulent 2020 presidential election and post-election violence, the EU enacted three rounds of sanctions against Belarus. The sanctions pressure gradually increased. The fourth and the fifth sanctions packages targeted Belarusian oil and potassium exports following the Ryanair plane diversion as well as the instrumentalisation of migrants for political purposes.
Due to the suspension of the transport of Belarusian fertilisers by the Lithuanian railways in compliance with the US sanctions in 2022, the reorientation of Belarusian oil and potassium products to alternative markets faced structural and logistical challenges, which were further compounded by the war in Ukraine. After the Russian invasion of Ukraine, EU pressure against Belarus has ramped up. There are EU sectoral bans on wood, cement, steel, and rubber products, financial restrictions on transactions with the Belarusian Central Bank, as well as the prohibition on road transport between the EU and Belarus. Belarus is now one of the most sanctioned states in the world.
But sanctions have been a “natural habitat” for the Belarusian regime since 1997. The restoration of cooperation in 2008 and 2015 followed previous instances of sanctions on Belarus. The Belarusian authorities have consistently managed to convince the EU to lift sanctions in exchange for a few concessions, such as the release of political prisoners or minor amendments to the Belarusian Electoral Code. Both in 2008 and 2015, the EU was ready to make concessions and relax sanctions even though they did not fulfil the objectives of democracy promotion in Belarus. The Russian war in Georgia in 2008, the illegal occupation of Crimea and the destabilisation of Donbas in 2014 made stability in Belarus more important for the EU than a real democratic transformation.
In a similar vein, the Belarusian regime might have calculated to use Russian aggression against Ukraine as a tool for its external legitimation in 2022. Those hopes did not materialise. In 2022, the EU sanctioned Minsk as a co-aggressor along with Moscow. Peace talks between Ukraine and Russia—previously conducted in Minsk—were swiftly moved to Istanbul. This does not mean that Minsk will stop its efforts to engage in a dialogue with the West. The Belarusian regime has a well-tested recipe of remaining in power by playing Russia against the West and trading political prisoners for the relief of sanctions. This is a scenario that the EU must be careful to avoid, or it risks repeating past mistakes.
Tightening up EU sanctions
Up until 2022, the EU lacked sufficient tools for the enforcement of its sanctions. According to some allegations, in 2020 the Belarusian authorities used Czech-made stun grenades against peaceful protestors in Belarus supplied in violation of an EU arms embargo on Belarus in place since 2011. Similar claims are relevant with respect to German-made body armour. Those incidents signal the proper implementation and enforcement of EU sanctions remain up for question.
In contrast to the United States, where the Office of Foreign Assets Control oversees compliance and implementation issues concerning US sanctions, in the EU, the final decision stays in the hands of member states. The decentralisation of sanctions monitoring risks the divergent application of sanctions across the EU. In this respect, the growing oversight role of the Directorate-General for Financial Stability, Financial Services, and Capital Markets Union (DG FISMA) will certainly bring more harmonisation to EU sanctions implementation.
Following Russia’s invasion of Ukraine, the coordination at the EU level on financial investigations has been strengthened via the Freeze and Seize Taskforce and Europol’s Operation Oscar. The Commission also foresees criminal responsibility for any sanctions breaches. Such measures change the preventive nature of sanctions by aligning breach punishments with criminal penalties.
The “grain for sanctions” deal poses a dilemma
The improvement of EU sanctions monitoring contrasts with discussions on the potential relief of sanctions measures in exchange for the transport of grain. Such a preliminary lifting of sanctions or any trade-off will undermine the objectives of EU sanctions against Belarus. The relaxation of sanctions may also send the wrong signal to Belarusian civil society—their Belarusian cause being subsumed under a bigger deal on Ukraine.
Therefore, any potential discussion on the future easing of sanctions in exchange for some concessions by the Belarusian authorities should take place with the involvement of Belarusian civil society, experts, academia, and representatives of the democratic forces.
Given that the EU-Belarus relationship has long been marked by a cycle of rapprochement and retrenchment, the EU would keep more leverage if it suspends sanctions instead of lifting them. The temporary suspension of sanctions to alleviate hunger in Africa would increase the EU’s bargaining power since it can be reversed if the regime resumes behaviour deemed problematic by the EU.
University of Tubingen
Belarus and its neighbourhood become a dead end for Europe
In the fifth round of EU sanctions adopted in response to Putin’s invasion of Ukraine, the union prohibited freight transport on member state territory by Russian and Belarusian carriers from 16 April.
Alongside the EU prohibitions on flights and the Baltic States’ decision to close their ports to Belarus, the new restrictions doom the country and its neighbourhood to degradation.
Transit sanctions on Belarus are a part of an economic war against Russia launched in response to its invasion of Ukraine, rather than a part of a realistic plan for regime change in Minsk.
All roads lead to Russia
After Brussels banned Belarusian and Russian heavy goods vehicles (HGVs) from entering the EU territory, many branch operators expected the worst. They feared Minsk would mirror the response and prohibit all EU freight carriers from entering the country. So far, the Belarusian government has taken a milder course. It has restricted EU-based HGVs from moving inside Belarus farther than 50 km. All HGVs will have to deposit their freight at logistics centres in Belarus. From these centres, transportation will be taken over by Belarusian or Russian firms.
Brussels’ move didn’t come from the blue. Poland and Lithuania began unofficially limiting the transit of goods via Belarus approximately a year ago. For example, in mid-February, Lithuania and Poland processed only 60 per cent of the daily, officially agreed to norm. Last week, the Belarusian State Border Committee complained that Polish and Lithuanian authorities were processing less than 40 per cent of the mutually agreed norms for HGV trade.
The bad news, therefore, was not unexpected in Minsk. But it still comes as a blow. HGV transport had been a growth industry, ranking second behind IT in Belarus’ export of services. The Belarusian Ministry of Transport calculates, that in 2021, the value of transport services had increased by almost 40 per cent to $4.3bn. This is the fastest growth rate in the sector’s history. Of this growth, automobile transport companies provided 76 per cent of the total.
Much of this business presumably involved the transport of goods to and from the EU. Minsk continues to withhold accurate statistics. The disruption of supply will not only result in economic decline. It will also reorientate Belarusian citizens more firmly to Russian, Chinese, and other non-Western sources of consumption. Divisions with the EU will not only be political but increasingly a cultural divide, too. This may prove to be the worst blow to regional cooperation and reintegration.
Belarusian access to the sea
Roadway transportation has been exacerbated by continuing difficulties with shipping Belarusian exports and imports. Belarus, as a landlocked country, is now totally dependent on Russian ports. Other neighbouring countries have prohibited Belarusian entities from using their seaports. After the EU introduced limitations on the export of Belarusian oil products, Minsk signed a February 2021 agreement with Moscow on the export of these goods via Russian ports. A one-sided Belarusian dependence on Russia is solidifying.
Minsk has worked to retain access to the sea. Two years ago, Lithuania started to restrict Belarusian potash exports. After Vilnius had rejected the Belarusian investors’ offers to develop the Lithuanian port of Klaipeda, Minsk looked for alternative export routes. Officials redirected leftover credit from a Russian loan to finance a nuclear power plant. In the second half of 2021, these funds were used to begin construction on Belarus’ own, purpose-built port facility near Saint Petersburg, in Russia. These terminals, built specifically for the export of potash, will enter service in 2023.
So, last November, while Vilnius announced the forthcoming prohibition of Belarusian potash transport via its territory, Minsk did face a problem. But it also had a solution literally under construction. In fact, the Lithuanian government acted on its own initiative—US and EU sanctions at the time did not require such measures from Vilnius.
After the problems with potash exports, Minsk then encountered increasing limitations and bans on other types of cargo. By early 2022, Belarus found itself semi-blockaded by all neighbouring states except Russia. It is reported that since March, the Estonian government has banned all transit—even for Belarusian oil products not included in EU sanctions—via Estonia.
In March, Belarusian dictator Alexander Lukashenka announced (and Russian President Vladimir Putin later confirmed) that in two years Belarus would have its “own ports” on Russia’s Baltic shores. Minsk plans to concentrate its imports and exports via these seaports. Construction is reportedly already underway. This case suggests the Belarusian government is working to maintain its agency, rather than simply capitulating to directives from Moscow. Not only has Minsk avoided going to war for Putin, but it also proactively seeks to relieve political and economic pressure from Russia by taking the initiative.
However, the ports of North-Western Russia may not provide a full-fledged alternative for Belarusian firms. Indeed, in a few months, they may lose up to 90 per cent of container cargo volumes, warn Russian logistics experts. These losses would result from the newest round of Western sanctions, decisions taken by European trade hubs, and global container shipping lines, which all aim to stop working with Russia. Of about twenty major container shipping lines, fourteen have already refused to work with Russia. It appears the rest are about to do so, too. Only one, China’s COSCO, appears ready to keep moving Russia-related goods. At the same time, large oceangoing ships (especially from South-East Asia) cannot reach North-Western Russian ports, because of the shallowness in the Baltic Sea. Instead, cargo must be reloaded on small feeders in some European havens to be then brought to Russia.
In this grim situation, Belarusian state media like to emphasise that neighbouring countries, by cutting the links with Belarus, are making this region of Europe into a dead end. Decreasing transit and trade will generate poverty for all involved.
For example, with the loss of the Belarusian potash business, cargo turnover at Lithuania’s Klaipeda port is forecast to fall by almost a third. In addition, Latvian railways are set to lose about a third of total freight turnover (last year, Belarusian freight made up 27 per cent).
However, Belarus itself is also becoming a dead-end. Its significance for both its closest allies, Russia and China, is rapidly fading. The main cause is the ongoing disruption of links between Belarus and its neighbours. Belarus is central to the region between the Black and Baltic seas. The entire area faces a decline with dim prospects for development.
This article cites just some of the numerous instances illustrating how general sanctions imposed on Belarus, and upon entire branches of its economy so far failed to make the regime capitulate. Instead, they drive the region into poverty and Belarus into Putin’s hands. Even worse, many of these sanctions were imposed on Belarus for actions taken by Russia. In a paradox, they further limit any autonomy of Belarus from Russia and at the same time punish it for Russia’s actions. Future efforts to promote democracy and prosperity in the region require revising this approach.