On 29 June 2024, the EU adopted a new Belarus sanctions package by amending Council Regulation (EU) 765/2006 (the “EU Belarus Sanctions“), effective from 1 July 2024. The amending regulation can be found here.
The new package increases the alignment of the EU Belarus Sanctions with the EU’s sanctions against Russia (including those contained in Regulation (EU) 833/2014 (the “EU Russia Sanctions“), as recently updated), in order to address the risk of circumvention.
The new Belarus package introduced several additional restrictions across different sectors, including:
- New export-related restrictions on industrial goods, maritime navigation equipment, oil refining and LNG technology, and luxury goods over specified values.
- Restrictions on the provision of intellectual property rights and trade secrets relating to goods subject to export-related restrictions.
- Restrictions on the transit of certain goods via Belarus.
- New import-related restrictions on Belarusian crude oil, gold, and diamonds, and other revenue-generating goods.
- Enhanced anti-circumvention measures, including certain obligations on EU companies to undertake steps relating to their non-EU subsidiaries and counterparties to ensure compliance with EU sanctions; and to prevent the re-export of certain items to Belarus (including “no Belarus” contract clause requirements).
- Prohibitions on the provision of business services and software to the Belarusian state, including its Government, public bodies, corporations and agencies, and to any person acting on behalf or at the direction of the foregoing.
- Expansion of the criteria under which parties may be listed as designated persons.
- Investment restrictions relating to the Belarusian energy sector.
- Certain claw-back rights as regards contracts/transactions impacted by the EU Belarus Sanctions.
- Expanded reporting obligations as regards “information which would facilitate the implementation” of the EU Belarus Sanctions.
As with other new measures in the EU Belarus Sanctions, the above controls include various exemptions, grandfathering and authorisation grounds which should be carefully reviewed alongside the restrictions.
Please see further details below on the latest measures and as always please contact your usual contacts in the Baker McKenzie international trade compliance team for support as needed.
Expansion of items subject to export or import restrictions
The new package adds restrictions on additional items subject to export or import restrictions (and related services), including:
- Import restrictions on the, direct or indirect, purchase, import and transfer of the following items which originated in or were exported from Belarus:
- crude oil (as listed in Annex XXIII of the EU Belarus Sanctions);
- diamonds and products incorporating diamonds (as listed in Parts A, B and C of Annex XXIX to the EU Belarus Sanctions); and
- ‘goods which allow Belarus to diversify its sources of revenue’ (as listed in Annex XXVII of the EU Belarus Sanctions).
- Import restrictions on the, direct or indirect, purchase, import and transfer of gold (as listed in Annex XXI and Annex XXII to the EU Belarus Sanctions) where the gold originated in Belarus and has been exported from Belarus into the EU after 1 July 2024. Restrictions also apply in relation to certain gold products processed in a third country that incorporate prohibited gold that originated and was exported from Belarus.
- Export restrictions on the, direct or indirect, sale, supply, transfer and export, of:
- ‘goods which could contribute in particular to the enhancement of Belarusian industrial capacities’ (as listed in Annex XVIII to the EU Belarus Sanctions);
- maritime navigation goods and technology (as listed in Annex XXIV to the EU Belarus Sanctions);
- luxury goods with a value exceeding EUR 300, unless otherwise specified (as listed in Annex XXV to the EU Belarus Sanctions); and
- goods and technology suited for oil refining and liquefaction of natural gas (as listed in Annex XX to the EU Belarus Sanctions),
to any person, entity or body in Belarus or for use in Belarus.
- It is now prohibited to sell, licence or transfer intellectual property or trade secrets relating to the goods and technology noted above (or goods already subject to such export restrictions) or related to the provision, manufacture, maintenance and use of such goods and technology, directly or indirectly to any person, entity or body in Belarus or for use in Belarus.
Transit controls
New prohibitions have been added to prevent certain goods exported from the EU from being transited via the territory of Belarus, including in relation to the export of the following:
- dual-use goods and technology (as listed in Annex I to Regulation (EU) 2021/821);
- goods which ‘contribute to Belarus military and technology enhancement’ (as listed in Annex Va to the EU Belarus Sanctions);
- certain machinery, including certain filters, valves and pumps (as listed in Annex XIVa to the EU Belarus Sanctions);
- goods and technology suited for use in aviation or the space industry (as listed in Annex XVII, to the EU Belarus Sanctions); and
- certain goods and technology, including jet fuel and crane lorries (as listed in Annex XIX to the EU Belarus Sanctions).
It is now also prohibited to purchase, import, or transfer, directly or indirectly, diamonds and products incorporating diamonds (as listed in Parts A, B and C of Annex XXIX to the EU Belarus Sanctions), of any origin, if they transited via the territory of Belarus.
Anti-circumvention
The EU has further strengthened its anti-circumvention measures in seeking to ensure EU sanctions are not undermined by the activities of parties outside the EU. These additions are consistent with the expanded anti-circumvention measures recently added to the EU Russia Sanctions under the 14th package, and include the following in particular:
- A requirement for EU entities to “undertake their best efforts to ensure” that their non-EU subsidiaries do not “participate in activities that undermine” the EU Belarus Sanctions.
- A requirement to introduce a “no Belarus” clause for items listed in Annexes XVI, XVII, XXVIII and Annex XXX to the EU Belarus Sanctions (and firearms and ammunition in Annex I to Regulation 258/2012). Currently, this applies only to contracts involving EU exporters and not their non-EU subsidiaries. The restrictions includes certain grandfathering relating to existing contracts.
- From 2 January 2025, EU operators selling goods on the list of common high priority items (listed in Annex XXX to the EU Belarus Sanctions) to third countries are required to implement due diligence mechanisms and controls capable of identifying and mitigating risks of re-exportation to Belarus.
- The scope of “circumvention” has been broadened to include participation in activities without deliberately seeking to circumvent sanctions, but being aware that participation may have that purpose or effect and accepting that possibility.
Services and Software
The new package introduces a services ban which prohibits the provision of business services and software to the Belarusian state, including its Government, public bodies, corporations and agencies, and to any person acting on behalf or at the direction of the foregoing.
- The scope of restricted services is the same as under the EU Russia Sanctions and includes restrictions on the following services: accounting, auditing, bookkeeping and tax consulting, business and management consulting, public relations, architectural and engineering, legal advisory, IT consultancy, market research and public opinion polling, technical testing and analysis, and advertising.
- Equally, the software restrictions are the same as under the EU Russia Sanctions and prohibit the sale, supply, transfer, export, or provision, directly or indirectly, of software for the management of enterprises and software for industrial design and manufacture (as listed in Annex XXVI to the EU Belarus Sanctions).
- Notably (and unlike under the EU Russia Sanctions), these restrictions do not extend to services provided to all private Belarusian entities.
- There is a winddown period for services strictly necessary for the termination by 2 October 2024 of contracts concluded before 1 July 2024. Services can also be provided for the exclusive use of EU and “partner country” owned entities until 2 January 2025. The partner countries are currently Norway, Switzerland, USA, Japan, UK South Korea, Australia, Canada, New Zealand, Liechtenstein and Iceland.
- Associated services restrictions also apply prohibiting the provision of technical assistance, brokering services, other services, financing and financial assistance related to the software and services.
The new package also expands prohibitions relating to goods in the Common Military List of the EU by prohibiting the provision of brokering services related to such goods or related to the provision, manufacture, maintenance and use of such goods, to any person, entity or body in Belarus or for use in Belarus. It is important for companies to continuously assess their risk exposure and ensure compliance with the latest implemented measures of the Belarus Sanctions. As always, please do not hesitate to contact the Baker McKenzie international trade compliance team for support whenever needed.
