On December 2, 2021, the U.S. Department of Treasury, Office of Foreign Assets Controls (OFAC) introduced several new measures and updated its Frequently Asked Questions as part of its recently expanded Belarus Sanctions program. Issued in coordination with allies in Canada, the United Kingdom (UK), and the European Union (EU), these actions include:
- A new directive restricting U.S. transactions in new Belarusian sovereign debt issued by the country's Ministry of Finance or Development Bank with a maturity greater than 90 days. The EU, UK, Canada, and Switzerland have imposed similar restrictions on sovereign debt dealings;
- A new license authorizing the wind-down of transactions involving two Belarusian entities, Open Joint Stock Company Belarusian Potash Company and Agrorozkvit LLC; and
- The addition of 32 Belarusian individuals and entities and three aircraft to OFAC's Specially Designated Nationals (SDN) list. These additions target the family of Belarusian President Alexander Lukashenko and the country's defense and potash sectors.
These measures were taken pursuant to Executive Order 14038, issued by President Biden in August 2021 to increase pressure on the Lukashenko government for reported human rights abuses, corruption, and anti-democratic behavior, especially after the county's disputed 2020 presidential election. The latest round of sanctions relates to concerns that Russian-backed Lukashenko is aggravating a migrant crisis on the Belarusian-EU border. In a press statement, U.S. Secretary of State Anthony J. Blinken called on the Lukashenko government "to end its crackdown on members of civil society, independent media, the political opposition, athletes, students, legal professionals and other Belarusians; to immediately release all political prisoners; to engage in a sincere dialogue with the democratic opposition and civil society; to fulfill its international human rights obligations; to stop its coercion of vulnerable people; and to hold free and fair elections under international observation."
This also reflects the Biden administration's growing dissatisfaction with Russian influence in the region and, accordingly, its increased willingness to put pressure on Russia and its allies for aggression there. As you may recall, earlier this year the Biden administration issued expansive new sanctions targeting Russia, designating various parties for election interference, cyber activity, and human rights abuses.
As tensions with both Belarus and Russia continue, businesses should be prepared for the United States and its allies to impose additional sanctions or export restrictions. We continue to monitor developments and potential countermeasures related to activity in the region. If you have any questions regarding how these recent developments may affect your business, please reach out to Venable's International Trade and Logistics Group for guidance.
* The authors would like to thank Anna Perina, a law clerk in Venable's Washington, DC office, for her assistance in preparing this article.