EU tightens sanctions on Belarus, targeting dual-use, high-tech goods, mineral products, potash, timber, cement and steel products, machinery, tightens capital markets and insurance | White & Case srl

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Written by our Global Sanctions Team

On March 2, 2022, the EU issued an extensive set of new sanctions against Belarus in response to its involvement in Ukraine. Existing restrictions on dual-use items, potash, tobacco-related products and mineral products have been extended, and a total import ban now applies to wood, cement and steel products, to rubber tires and a wide range of machinery. Old “grandfather” clauses allowing the enforcement of previous contracts involving trade restrictions, disbursements under existing loans to listed banks and the provision of (re)insurance services to certain parties no longer apply . The EU has also added other Belarusian parties to its assets freeze list.

Trade Restrictions1

Effective March 3, 2022, existing restrictions on supplies of dual-use goods and related services have been expanded to reflect those imposed on Russia,2 while those on trade in potash, minerals and tobacco products have also been strengthened.

  • Dual use, military and high-tech: Existing trade restrictions on supplies of dual-use items have been extended to a ban on the export of all dual-use items, regardless of their origin, to any person in Belarus or use Belarus.3 This prohibition also covers financing or related financial assistance, brokerage services, technical assistance (including assembly, testing, training, and repair), and other services related to manufacturing, care and use of these items. In line with EU sanctions against Russia on these articles, exemptions apply (subject to specific notification and clearance requirements) in certain cases, e.g. for intergovernmental cooperation, humanitarian purposes or personal purposes to travel to Russia. Pre-existing contractual activities may be allowed under Member State authorization, to be requested before 1 May 2022. Similarly, the EU has imposed an export ban on a wide range of goods and technologies considered to contribute to development of the military and technological improvement of Belarus. , including related support/services.4 As with the EU sanctions against Russia, the extensive restrictions cover various items that are not normally covered by EU dual-use controls but are covered by the US Trade Control List. United ; this includes items for the electronics industry (e.g. microprocessors, semiconductors) and information security, sensors, lasers, navigation/avionics, marine and aerospace/ propulsion items. Similar exemptions and related notification and authorization requirements generally apply to those applicable to dual-use items.
  • The tobacco: The list of items subject to supply restrictions has been expanded to now also include knives and cutting blades for use in machinery,5 and related brokerage services, technical assistance, financing or financial assistance (including financial derivatives and (re)insurance). The old grandfather clause allowing contracts entered into before June 25, 2021 has been removed with immediate effect, now effectively prohibiting all supplies of covered goods and services under those contracts as well.
  • Mineral products: Existing import restrictions on “petroleum oils and gaseous hydrocarbon products” now apply more broadly to “mineral products” (the list being expanded to include oils and other coal tar distillation products (tariff item 2707).6 The execution of contracts prior to June 25, 2021 is no longer permitted.
  • Potash products: Existing import restrictions on most potash products have now been extended to cover all potash products (i.e. the entire tariff subheading 3104 20), and contracts prior to June 25, 2021 can no longer be executed.

Also in force from March 3, 2022, import/purchase and transport restrictions now apply to the following products, which means that they cannot be directly or indirectly imported, purchased or transported, if they originate in Belarus or are exported from Belarus. Related technical assistance, brokerage, financing or financial assistance (including financial derivatives and (re)insurance are also prohibited. Contracts concluded before March 2, 2022 (and ancillary contracts) can only be executed until June 4, 2022:

  • Woodwooden articles and charcoal;7
  • Cement and articles of cement, concrete or artificial stone;8
  • All steel products;9
  • New tire rubber tires;ten
  • A wide range of machinery.11

Access to the European capital and insurance market

Since March 3, 2022, capital market sanctions in force against the Republic of Belarus, its state bodies and five banks12 have been tightened. Withdrawals or disbursements under contracts prior to June 25, 2021 are no longer authorized. The provision of insurance or reinsurance to the Belarusian government, its public bodies or natural legal persons acting on their behalf or at their instructions under contracts prior to June 25, 2021 is now prohibited.13

Freeze of assets

In recent days, the EU has expanded its asset freeze list to include more Belarusian nationals.14 All funds and economic resources in the EU owned or controlled by these listed parties must now be frozen. In addition, no funds or economic resources may be made available – directly or indirectly (for example, through companies owned or controlled by them) – to or for their benefit, unless authorized or exempted.

1 See Regulation 2022/335, available here, amending Regulation 765/2006, latest consolidated version available here, not yet reflecting recent amendments to Regulation 2022/212, available here.
2 See our alert here.
3 Previously, the ban was restricted to military end-use and military end-users only.
4 See the new appendix Va.
5 See revised Annex VI.
6 See revised Annex VII.
7 See the new Annex X, which covers the whole of Chapter 44 of the EU Combined Nomenclature.
8 See the new Annex XI, which covers tariff headings 2523 and 6810.
9 See the new Annex XII, which covers all of Chapters 72 and 72 of the Combined Nomenclature.
10 See the new Annex XIII, which at this stage only contains tariff heading 4011.
11 See the new Annex XIV, containing many headings from Chapters 84 and 85 of the Combined Nomenclature.
12 See Annex IX.
13 The existing exemption for the provision of compulsory or civil liability insurance for risks located in the EU or the provision of insurance to Belarusian diplomatic/consular missions in the EU remains in place.
14 See Council Implementing Regulations 2022/332 here and 2022/353.

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