US Issues New Belarus Sanctions, Debt Dealing Restrictions Alongside Allies

The Office of Foreign Assets Control this week sanctioned an additional 20 people, 12 entities and three aircraft for aiding the Alexander Lukashenko regime in Belarus. The agency also imposed new restrictions on dealings in Belarusian sovereign debt, and issued a new general license and 10 new frequently asked questions to provide guidance on the new sanctions.

The designations, issued Dec. 2, are the U.S.’s fifth round of sanctions against Belarus since the country’s illegitimate presidential elections last year, and were announced alongside similar measures by the European Union, the United Kingdom and Canada. Each sanctioned a range of high-ranking officials and government-linked entities for their involvement in human rights violations and helping the government organize illegal border crossings through Belarus to the EU.

“The United States stands alongside its international partners and allies in imposing costs on the Lukashenko regime for its deplorable behavior, including migrant smuggling,” OFAC director Andrea Gacki said, adding that the U.S will continue to pursue multilateral penalties against the Lukashenko regime for “flaunting” human rights.

As part of the sanctions, the U.S. issued a new Directive 1, which blocks certain transactions, financing or dealings by U.S. people with certain Belarusian debt. The directive specifically restricts activities “in new debt with a maturity of greater than 90 days” issued on or after Dec. 2 by the Belarus Finance Ministry or Belarus Development Bank.

OFAC issued several new FAQs to provide guidance on the directive, including FAQs 940, 941, 942, 943, 944, 945, 946, 947 and 948. Notably, OFAC said its 50% rule doesn’t apply to the restrictions outlined in Directive 1, and defined debt as “bonds, loans, extensions of credit, loan guarantees, letters of credit, drafts, bankers’ acceptances, discount notes or bills, or commercial paper.”

The U.S. said the directive follows similar actions by the EU, the U.K., Canada and Switzerland, which have all targeted new issuances of Belarusian sovereign debt in the “primary and secondary markets in an effort to hold the Lukashenko regime responsible for its ongoing malign behavior.”

OFAC also issued new Belarus General License No. 5, which authorizes activities necessary to wind down transactions involving two newly sanctioned companies, Open Joint Stock Company Belarusian Potash and Agrorozkvit, or any entity they own by 50% or more. Those transactions are authorized through April 1. In FAQ 939, OFAC stressed that the new general license doesn’t authorize “direct transactions” with Belaruskali OAO, which was sanctioned in August (see 2108090033).

OFAC’s designations target a range of high-profile government officials and agencies, including the Republican Unitary Enterprise Tsentrkurort, the country’s state-owned tourism company; JSC Transaviaexport Airlines, a government controlled cargo carrier and its aircraft EW-78843 and EW-78779; CJSC Beltechexport, a defense industry exporter; and AGAT Electromechanical Plant OJSC and Joint Stock Company 140 Repair Plant, state-owned enterprises that produce equipment for the country’s military.

In a joint statement, the U.S., Canada, the U.K. and the EU called on the Lukashenko regime to release its political prisoners, stop oppressing its people and halt the “irregular migration across its borders” into the EU. “Those -- in Belarus or in third countries -- who facilitate illegal crossing of the EU’s external borders should know this comes at a substantial cost,” the countries said.