European Policy of Sanctions Runs into Trouble

Европейская политика санкций столкнулась с кризисомBy Anton Taras
Translated by the ODB

This article was initially published on on 6 February 2012

The European sanction policy towards Belarus has many layers: there are travel restrictions for some representatives of the Belarusian state heading to the European Union, Belarusian officials are banned from holding their assets in the EU, and, selling certain types of arms that can be used for repressions to the country is illegal. While the first and the last type of restrictions has been widely discussed and criticized in the media, the second type – holding assets in the EU – is rarely publicly questioned, one of the reasons being lack of accessible information on this topic.

However, it seems that the times of secrecy about the failings of EU’s economic sanctions towards Belarus are over.

According to the information obtained by, one of the leading international human rights advocacy organisations is preparing for publication a report on the situation in Belarus. The report will pay a lot of attention to the criticism of the European sanctions – both visa-related and economic –towards the representatives of the Belarusian state.

As indicated in the draft of the report, imposing travel restrictions and freezing European bank accounts of selected citizens of Belarus has been a purely symbolic gesture and did not lead to any real change in the country. The European member states lack the political will and unity to apply serious economic pressure on the Belarusian government. This partly has to do with the economic interests of several European countries. While the EU politicians condemn the government in Minsk, some European banks and enterprises continue doing business as usual with the country, with the Austrian Raiffeisen Bank, German Deutsche Bank and BNP Paribas of France being cited as examples.

“At the same time, Belarusian businessmen from Lukashenka’s trusted circles who serve as “regime’s money bags” continue doing business in Europe unhampered, opening subsidiaries and freely using banking accounts”, continues the draft.

On June 20th, 2011, the European Council has imposed sanctions on Vladimir Peftiev, a Belarusian businessman, and on three companies associated with him: closed joint stock company “Beltechexport”, closed joint stock company “Sport-pari” and private unitary enterprise “BT Telecommunications”. In the Council’s documents Peftiev is referred to as “president Lukashenka’s main economic adviser and a key financial backer of Lukashenka’s regime”. According to the European rules, all financial means and assets of the individuals and companies subject to sanctions should be frozen within the borders of the EU, and no resources should be put at these individuals’ or companies’ disposal directly or indirectly. Any action to circumvent the restrictions is prohibited.

However, civil rights activists possess information proving, that even after the imposition of sanctions Peftiev continues to conduct successful business transactions in Europe. And his European partners are actively trying to lobby for the lifting of sanctions that interfere with his business interests.

(Peftiev has filed a lawsuit against the Council at the European Court. The Council refrained from comments on the matter.)

Some sources indicate that the French bank Societe Generale might be among those ignoring Brussels’ sanctionrules. The assets of two Belarusian officials who were subject to sanctions were not frozen, and probably transferred to a non-EU bank instead. Societe Generale ignored BelaPAN’s official request for information on this matter. It should be noted that “Belrosbank” is a member of the international banking group Societe Generale, so the French bankers probably have a cause for concern over their Belarusian assets and thus a reason to be more cooperative with the government in Minsk.

According to a widespread opinion, Belarusian regime survives mainly thanks to Russia’s financial backing. The authors of the soon to be published report, however, conclude that in 2011, Belarus economically benefited more from its relationships with the West, than from those with the East. The document states that the Belarusian exports to the European Union grew by 221% last year compared to 2010; the share of exports to the EU has thus reached 38% of all national exports.

The data from the National Statistics Committee of Belarus does not contradict the numbers from the report either, although the complete report on the trade with the EU for 2011 has not been published yet. In the period from January to November the exports increased 2,2 times and reached USD 14,063.9 bn.

It is clear that the European sanctions policy in its current form failed to contribute to the improvement of the human rights situation in Belarus. It is even possible that the regime dialed up its brutality throughout 2011 as a response to the sanctions.

This explains the two opposing approaches to the problem of human rights currently existing in the Belarusian human rights organisations. Some call for a tougher EU stance towards Belarus and the introduction of the new “narrow economic sanctions”. Other organisations hold the view that it makes more sense to moderate the sanctions and, for instance, take the names of the heads of universities, journalists and the businessman Vladimir Peftiev off from EU’s “black list”. The proponents of this view considerthis course to be more likely to lead to the release of political prisoners.

The latter view, obviously, fits in with the line of the official Minsk. There is some information indicating that Belarusian diplomats in Brussels offered to release political prisoners in return for taking the edge off the sanctions in January 2012.

It is still unclear whether the EU is going to change its approach to solving the Belarusian issue, and what direction that change could take. The answer to this question is likely to become clear on February 27th, at the next meeting of the European Council. The options are quite limited: expand the black list, downsize it, or do nothing.

Despite various critical voices, the EU is unlikely to moderate its sanctions. For one, all decisions of the Council are made collegially, and there is no unity about how to deal with Belarus among the EU member states. Also, the opponents of a tougher stance have a strong lobby force. Secondly, European politicians need to preserve face, and a turnaround with a withdrawal of the ultimatum about the release and vindication of the Belarusian political prisoners would be considered a sign of EU’s weakness both in and outside Belarus.