Expanded sanctions have landed for Belarus following Ryanair diversion

On June 21, 2021, the Canadian government announced the further tightening of sanctions for Belarus, imposing sanctions on these additional 17 Belarusian individuals and five entities, including an air navigation services company, an oil company, a logistics company, and two automobile plants. These mark the first sanctions imposed by Canada against Belarusian entities and follow sanctions imposed against a number of Belarusian officials between September and November 2020 (collectively, the “Belarus Sanctions”), as discussed in our September 30, 2020 and October 19, 2020 articles. This brings the total number of Canadian-sanctioned Belarusian individuals to 72.

According to the Canadian government, the Belarus Sanctions were expanded “in response to gross and systematic violations of human rights occurring in Belarus”. This follows the Belarusian government’s May 23, 2021 diversion and forced landing of Ryanair Flight 4978 and the detention and arrest of two of its passengers: Belarusian journalist, Roman Protasevich, and his companion, Sofia Sapega. The Canadian government called this act, conducted in the context of an unverified bomb threat, yet another indication of the Belarusian regime’s “clear disdain for fundamental human rights – and media freedom in particular”.[1]

As discussed further below, the expanded sanctions were implemented in coordination with measures of the United States, the EU, and the UK, demonstrating that these jurisdictions are united with Canada in their “deep concern regarding the Lukashenko regime’s continuing attacks on human rights, fundamental freedoms, and international law”.[2] These coordinated global sanctions are designed to pressure Belarus into cooperating with international investigations, releasing political prisoners, implementing recommendations made by the Organization for Security and Cooperation in Europe, and engaging in meaningful domestic political dialogue.[3]

Restrictions continue in the form of an “asset freeze”, now covering additional individuals and entities

As discussed in our previous article, the individuals (and now entities) listed in the Schedule to the Belarus Sanctions are subject to an asset freeze, which prohibits Canadians and persons in Canada from dealing in property owned, held or controlled by those individuals or entities, facilitating any such dealings, providing financial and related services to them, as well as making any goods, wherever situated, available to them. These measures effectively prohibit engaging in activities directly or indirectly involving listed individuals or entities and the entities that they own or control. The Belarus Sanctions further prohibit knowingly doing anything that causes, facilities or assists in or is intended to cause, facilitate or assist in any such activities.

Asset freezes or similar mechanisms are also widely utilized by Canada’s trading partners.[4]

It should also be noted that Canada’s actions in response to developments in Belarus have not been limited to economic sanctions measures. In late 2020, Canada also suspended the issuance of new permits allowing for the export, transfer or brokering of controlled goods or technology to Belarus.

Businesses need to move quickly to ensure compliance

To ensure compliance, businesses should once again revise their sanctions policies and procedures to reflect these changes, adding the newly listed names, and entities they own or control to screening protocols. This should be done promptly, as the changes are already in force.

According to Global Affairs Canada’s website, these changes, implemented through an amendment to the Regulations Amending the Special Economic Measures (Belarus) Regulations, came into force on June 17, 2021, a full four days prior to being publicly announced. This practice of announcing a change after it has gone into effect has become a longstanding source of complaint for Canadian financial institutions and exporters, who are left scrambling to ensure their practices are compliant after learning about changes that have been force for several days. This underlines the importance of ongoing attentiveness to regulatory developments.

Canada’s response is consistent – but not identical – with that of its global counterparts, which should be taken into account for compliance purposes

As noted above, Canada coordinated its response to developments in Belarus with the United States, EU, and the UK, issuing a joint statement to that effect. Although coordinated, the responses were not identical. The following table highlights some key differences:

 

# of Sanctioned Individuals

# of Sanctioned Entities

General Observations

Prev.

New

Prev.

New

Canada[5]

55

17

0

5

· Canada’s list of sanctioned individuals now includes the Minister of Transport,[6] the Prosecutor General,[7] and the Minister of Defence.[8] The complete list of 72 Belarusian individuals includes approximately 53 government officials.[9]

· The five entities consist of an air navigation services company, an oil company, a logistics company, and two automobile plants.

United States[10]

25

16

13

5

· The United States grouped its new sanctions into four categories: 1) close associates of Belarusian President Alexander Lukashenko, 2) perpetrators and facilitators of violent suppression of peaceful protests following the August 9, 2020 presidential election, 3) the Akrestsina Detention Centre, and 4) orchestrators of the fraudulent election.[11]

European Union[12]

88

78

7

8

· The EU sanctioned a total of 78 new individuals, seven of which were targeted directly in response to the Ryanair Flight 4978 incident.[13]

· The EU sanctioned the same five entities as Canada did, in addition to three other entities with connections to Belarusian politics.[14]

United Kingdom[15]

88

11

7

2

· The UK imposed sanctions on 11 additional individuals, seven of which were imposed directly in response to the Ryanair Flight 4978 incident.[16]

· Only one of the two entities sanctioned by the UK in the most recent round was also sanctioned by Canada. The other entity is a UK entity believed to be controlled by Alexander Lukashenko.[17]

As the above chart demonstrates, even when they purport to closely coordinate with each other when moving against a sanctions target such as Belarus, significant differences in approach to sanctions exist between Canada and its major trading partners. This serves as an important reminder that sanctions-related compliance needs to be considered on a country-by-country basis. Vigilance is required to ensure that compliance programs are calibrated properly to reflect any potential divergence across sanctions regimes.

[1] https://www.canada.ca/en/global-affairs/news/2021/06/canada-imposes-additional-sanctions-on-belarusian-individuals-and-entities.html.

[2] https://www.canada.ca/en/global-affairs/news/2021/06/canada-the-european-union-united-kingdom-and-united-states-impose-sanctions-on-belarusian-individuals-and-entities.html.

[3] https://www.canada.ca/en/global-affairs/news/2021/06/canada-the-european-union-united-kingdom-and-united-states-impose-sanctions-on-belarusian-individuals-and-entities.html.

[4] See e.g., https://home.treasury.gov/news/press-releases/jy0237; https://www.gov.uk/government/publications/financial-sanctions-belarus; https://www.consilium.europa.eu/en/policies/sanctions/restrictive-measures-following-the-2020-belarus-presidential-elections/belarus-timeline/.

[5] https://www.international.gc.ca/world-monde/international_relations-relations_internationales/sanctions/belarus_regulations-reglement.aspx?lang=eng.

[6] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32021D1002&qid=1624321874829.

[7] http://www.prokuratura.gov.by/en/.

[8] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32021D1002&qid=1624321874829.

[9] https://www.mccarthy.ca/en/insights/blogs/terms-trade/canada-casts-wider-sanctions-net-over-belarus; https://www.canada.ca/en/global-affairs/news/2021/06/backgrounder---sanctions-related-to-belarus.html.

[10] https://sanctionssearch.ofac.treas.gov/.

[11] https://home.treasury.gov/news/press-releases/jy0237. The Akrestsina Detention Centre is relevant because it is a place where protesters were arrested, subsequently detained, and said to have been subjected with intense physical abuse in Minsk following peaceful protests against the August 9, 2020 presidential election. The location was designated for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, human rights abuses related to political repression in Belarus.

[12] https://www.consilium.europa.eu/en/policies/sanctions/restrictive-measures-following-the-2020-belarus-presidential-elections/belarus-timeline/.

[13] https://www.consilium.europa.eu/en/policies/sanctions/restrictive-measures-following-the-2020-belarus-presidential-elections/belarus-timeline/.

[14] https://www.consilium.europa.eu/en/policies/sanctions/restrictive-measures-following-the-2020-belarus-presidential-elections/belarus-timeline/.

[15] https://www.gov.uk/government/publications/the-uk-sanctions-list?utm_medium=email&utm_campaign=govuk-notifications&utm_source=fb22851e-ab22-41ae-9f13-4d4269612bb5&utm_content=immediately.

[16] https://www.gov.uk/government/news/uk-imposes-sanctions-on-belarus-following-forced-landing-of-ryanair-flight.

[17] https://www.gov.uk/government/publications/the-uk-sanctions-list?utm_medium=email&utm_campaign=govuk-notifications&utm_source=fb22851e-ab22-41ae-9f13-4d4269612bb5&utm_content=immediately; https://www.canada.ca/en/global-affairs/news/2021/06/backgrounder---sanctions-related-to-belarus.html.

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