UK’s blocking and sectoral sanctions in respect of Belarus
On Monday, August 9, 2021, Great Britain expanded its blocking sanctions in respect of the Republic of Belarus by introducing sectoral sanctions. Apart from Great Britain, also the USA and Canada introduced some alterations in their sanctions regimes (these will be covered below).
After exiting from the European Union, Great Britain has been conducting an independent sanctions policy
Therewith, Great Britain’s sanctions policy and sanctions list in respect of the Republic of Belarus are broadly similar to the European Union’s restrictive measures and sanctions list, covered by us in the previous article.
The alterations were adopted on the ground of The Republic of Belarus (Sanctions) (EU Exit) (Amendment) Regulations 2021 (Regulations 2021). The Regulations amend the basic Great Britain’s Sanctions Regulations in respect of the Republic of Belarus – The Republic of Belarus (Sanctions) (EU Exit) Regulations 2019 (Regulations 2019).
Due to the adoption of Regulations 2021, we have prepared a brief review of the main provisions of Great Britain’s sanctions regime in respect of the Republic of Belarus.
1. Blocking sanctions in respect of particular persons (art. 11, Regulations 2019)
Regulations 2019 establishes the following restrictions for designated persons:
- prohibition of transactions with financial assets (funds) and/or economic resources (asset freeze) owned, held or controlled by any designated persons
- prohibition of making available financial assets and/or economic resources, directly or indirectly, to designated persons or to their benefit
Funds and economic resources are quite broad notions and comprise, in particular:
- physical cash
- accounts receivable
- security papers
- letters of credit
- movable and immovable property
- intangible assets
The restrictions also apply to crypto assets (crypto currency, NFT, DeFi 2, etc.).
The full list of ‘designated persons’ comprises 100 natural persons and 9 corporations.
The sanctions also apply to legal entities owned or controlled by a designated person.
A company is deemed to be owned or controlled by a designated person, where:
- such person owns over 50% of such company’s capital
- such person owns at least 50% of such company’s voting rights
- or such person can appoint/dismiss most members of such company’s board of directors
Even in the absence of the above indications, a company will still be deemed to be owned or controlled by a designated person, should there be other indications implying that such company is acting to designated person’s benefit.
2. Financial market, loans and insurance (art. 15, Regulations 2019)
Financial market. Prohibition of direct/indirect transactions with marketable securities or money-market instruments, provision of investment services, where:
- such securities or instruments have a period of maturity over 90 days
- such securities have been issued by a relevant person
- such securities have been issued after Regulations 2021 came into effect
Loans/credits. Prohibition of direct/indirect loan/credit transactions and other transactions providing, directly or indirectly, loans or credits to relevant persons, where the period of maturity exceeds 90 days.
Insurance. Prohibition of insurance/re-insurance the Republic of Belarus; its government authorities; entities owned by the Republic of Belarus or government authorities, and any persons acting to their benefit or at their direction.
For the purpose of applying the above restrictions, a relevant person means:
- the Republic of Belarus
- a Belarusian authority
- a legal entity wholly owned by the Republic of Belarus or a Belarusian authority
- a credit/financial entity or financial institution predominantly owned by the Republic of Belarus or a Belarusian authority
- a legal entity located outside Great Britain, predominantly owned by a credit/financial entity or financial institution mentioned in cl. 4
- any person acting to the benefit or at the direction of entities mentioned in cl. 4 to 5
A Belarusian authority denotes the Council of Ministers, ministries, bodies subordinated to the Council of Ministers, the National Bank of the Republic of Belarus and some other national and local bodies of state administration.
Unlike European Union, Great Britain has not specified particular credit/financial entities, but stipulated a broader “predominant ownership” criterion.
3. Commercial sanctions: dual-use goods/technology; tobacco industry goods; potash; petroleum products (art. 18 to 27, Regulations 2019)
Similarly to European Union, Great Britain has introduced sectoral sanctions in respect of some categories of products.
Dual-use goods and technology. Prohibition on exports of military products to Republic of Belarus was in place already before Regulations 2021. Major alterations apply to dual-use goods. Regulations 2021 prohibit exports of dual-use goods for military application to the Republic of Belarus.
Regulations 2021 also prohibit any provision, supply, transportation, transfer, technical or financial support/maintenance of dual-use goods for military application to any persons associated with the Republic of Belarus or to the Republic of Belarus.
Furthermore, prohibition applies to exports of products (services) and technology designed for the interception and monitoring of communications. Also, prohibition applies to any actions related to exports of such products: transfer, transportation, financial/technical and other support/maintenance.
Tobacco industry goods. Regulations 2021 have introduced a prohibition on exports, supply and provision of products to the Republic of Belarus to be used in Belarus in 4 product categories: filters, cigarette paper, tobacco flavouring agents and machines for nervation/cutting tobacco leaves (Annex 2B to Regulations 2021).
Potash. Regulations 2021 have introduced a prohibition on imports of potash from the Republic of Belarus (or of Belarusian origin). The Regulations also feature prohibition of any participation in supplying or transporting of potash of Belarusian origin or from the Republic of Belarus to third countries or among third countries. Prohibition, in general, of purchasing potash, either of Belarusian origin or located in the territory of the Republic of Belarus.
The restrictions apply to goods in 6 product categories specified in Annex 2B to Regulations 2021 (TNVED codes 31042010, 31042090; 31052010; 31052090; 31056000; as well as 31059020 or 31059080 in respect of fertilisers containing potash chloride).
Petroleum products. The same restrictions as for potash are specified by Regulations 2021 in respect of petroleum products. Additionally, prohibition is stipulated for any technical support for imports/purchase of petroleum products of Belarusian origin or located in the territory of the Republic of Belarus, as well as for financial services, funding, broker’s services involving import, purchase, supply or transportation of such petroleum products.
The restrictions apply to goods in 5 product categories specified in Annex 2B to Regulations 2021 (TNVED codes 2710, 2711, 2712, 2713, 2715). Please note that the list does not include category 2709 (crude petroleum) and 2714 (bitumen and asphalt).
Aviation industry. Regulations 2021 also stipulate a number of restrictions in respect of Belarusian aviation companies and specific airplanes (art. 29, Regulations 2019).
4. Area of application and responsibility
Great Britain’s sanctions, by analogy with the sanctions regime imposed by the European Union, are obligatory for all persons/entities in the territory of Great Britain, including maritime belt.
The sanctions are obligatory for, regardless location:
- British citizens
- citizens of British overseas territories (Bermudas, British Virgin Islands, Gibraltar, etc.)
- British subjects
- companies registered or incorporated in Great Britain
Laws of Great Britain prescribe criminal liability for violations of sanctions regime: imprisonment (in some cases, up to 10 years) and/or imposition of a fine.