The Belarusian leader faces two basic scenarios, writes Valdai Club Programme Director Ivan Timofeev. The first is to “swallow” Western sanctions, to keep a low profile and, at least temporarily, not to carry out similar demarches. The second way would entail a new round of escalation, playing on other topics that are painful for the West. But this scenario could lead to a new escalation of sanctions.
Another package of sanctions has been introduced against the Republic of Belarus. The USA, UK and Canada simultaneously announced restrictive measures against a number of Belarusian officials, security officials and persons close to the government structures. The restrictions also affected a number of Belarusian legal entities. These countries openly say that the imposed sanctions are a response to the “migration crisis” on the Belarusian-Polish border, as they believe the Belarusian authorities engineered the crisis. The new sanctions are a signal that countries will not be able to play such games with migrants without expecting a tough response. The Belarusian leader has at least two scenarios of retaliatory steps — to “swallow” the new sanctions and keep a low profile, or to amp up the stakes again.
The new sanctions against Minsk are notable for several reasons. First, the course of toughening the introduced measures continues. If in 2020, against the background of the presidential elections and public protests, the restrictive measures were more symbolic and a means of signalling, then in the summer of 2021 it became clear that the West clearly did not want to limit itself to cosmetic measures. The course of sanctions is being developed. Second, the US and EU are aligning and harmonising their sanctions. Brussels mirrored the US measures in August 2021 in part, while Washington mirrored some of the EU summer restrictions. We observe this synchronisation of actions among the Western allies towards Belarus. Britain and Canada also maintain close coordination with their allies, although they have not repeated the decisions verbatim. Fourth, US sanctions pose the greatest threat to Minsk.
Western sanctions are nothing new for Belarus. Their history stretches back to the 2000s. The EU began to introduce them in 2004, and by 2012 there were 243 individuals and 32 organisations in the black list At the time, Washington also introduced blocking sanctions against a number of Belarusian individuals. Both the EU and the US reacted to the concentration of political power in Belarus, accusing the current authorities of manipulating the elections and suppressing the opposition. The legal mechanisms of those times are still in force, although in response to the softening of domestic policies, the EU and the United States reduced the number of persons under sanctions or introduced temporary exemptions. By 2016, only four people remained in the black lists of the EU, and the United States issued a general license toward previously blocked Belarusian enterprises.
Clouds reappeared on the horizon in 2020, and after the incident with the Ryanair flight, the pressure on Minsk increased significantly. The European Union has expanded its lists of blocked persons. By June 2021, these were 166 individuals and 15 legal entities, including such large companies as MAZ and BELAZ. Sectoral sanctions have been introduced. Among them are bans on the supply of defence products, goods for the tobacco industry, restrictions on importing a number of petroleum products and potash fertilizers, a ban on transactions with government debt securities with maturities of more than 90 days, a ban on the insurance of government agencies of the Republic of Belarus, and a ban on the European Investment Bank’s operations with Belarus. The United States initially limited itself to blocking sanctions against officials, but after the Ryanair incident, it also took tougher measures. Washington did not renew the general license for nine Belarusian enterprises that were previously on the black list. In August 2021, President Biden signed Executive Order 14038, which set up a stricter legal framework for sanctions against Belarus. Blocking sanctions were introduced against 21 organisations, including large Belarusian enterprises. The UK, Switzerland and Canada have updated their sanctions regimes.
The December round of sanctions continued the course of tough measures. The EU has expanded its list of blocked persons, including some companies that the Americans previously blocked. The United States, for its part, has also expanded its number of sanctioned individuals. In both cases, they targeted officials, security officials and other persons involved, according to the sanctions initiators, in the “migration crisis”, as well as companies and organisations connected with the Belarusian authorities. In addition, other Belarusian enterprises, not involved in the crisis but important from the point of view of exports and obtaining foreign exchange earnings, were also subject to sanctions. On top of that, the Americans imposed sectoral sanctions on the financial sector, barring American individuals from purchasing Belarusian debt securities with a maturity of more than 90 days. The UK and Canada took more modest measures, blocking a number of individuals and businesses.
Of course, the measures that were taken will not yet lead to the collapse of the Belarusian economy. A significant proportion of the country’s trade is with Russia. However, in a number of areas, sanctions are still quite painful, especially in the field of oil refining and the production of potash fertilizers. The most problematic are the US sanctions. Those included by the US Treasury in the list of blocked persons face seriously complications in their international activities. Any transactions in dollars and all economic transactions with American citizens, companies, or persons directly or indirectly associated with the United States are closed for them. The interpretation of the number of such persons is extremely wide. As a result, many foreigners face criminal or administrative responsibility in the United States. Any business with any significant international dimension fears coercive US measures and keeps its distance from blacklisted individuals. That is why US sanctions are so important in the first place.
Apparently, the “migration crisis” really was a demonstration that Minsk will not leave the summer sanctions unanswered. Belarus cannot give Washington and Brussels a proportional economic response. However, it is quite capable of causing concern in other areas, including migration.
Now the Belarusian leader faces two basic scenarios. The first is to “swallow” Western sanctions, to keep a low profile and, at least temporarily, not to carry out similar demarches. He has opted for such manoeuvres in the past, which have led to the relaxation of sanctions. The second way would entail a new round of escalation, playing on other topics that are painful for the West. But this scenario could lead to a new escalation of sanctions. The West is in a better position here. Its safety margin is higher, and the measures can be more and more serious. In addition, Brussels, Washington and other players will most likely link the lifting of sanctions to a political transition in Belarus, and not on the terms of the current government.
Strengthening ties with Russia would be a logical step for Minsk to take, given the current conditions. At least it is necessary to develop the financial infrastructure of the Union State of Belarus and Russia, which would secure bilateral transactions from the influence of third countries. Russia can mitigate damage from foreign sanctions. However, it is unlikely to fully compensate for them.