First, the sanctions have acquired a sectoral dimension. The sectoral meaning of the sanctions differs from that in which they are used against the Russian defence, financial and energy sectors. In the case of Russia, we are talking about a certain set of restrictions used against a number of organisations from the aforementioned sectors, which is not related to blocking sanctions. For this, a separate list of persons subject to sectoral sanctions (Sectoral Sanctions Individuals) is maintained. They are milder in comparison with blocking sanctions and, in the case of each sector, imply a separate set of restrictive measures. The new sanctions against Belarus are a hybrid of sectoral and blocking sanctions. Specialised executive bodies of the United States are given the opportunity, at their discretion, to block people associated with certain sectors.
That is, this hybrid option is more destructive. In the case of Belarus, we are talking about such sectors as defence, state security, energy, potassium production, the tobacco industry, construction and transport. In other words, the affiliation of an organisation to one of the indicated sectors can in itself become the basis for blocking sanctions.
The latter, in turn, imply a ban on US citizens and organisations carrying out any transactions with a blocked person. Such persons lose, among other things, access to the US market, as well as the ability to use US dollars in their settlements. The US has already used hybrid blocking and sectoral sanctions against Iran and Russia. With regard to Russia, we are talking about the recent Executive Order 14024, which, among other things, targeted Russian citizens associated with the technology sector with
blocking sanctions.
Second, any government structure and its leadership, as well as any organisation that the US authorities consider a government agent or instrument, can now fall under blocking sanctions. This is a broader interpretation in comparison with Executive Order 13405 of 2006. At that time, only those persons who were believed to be involved in the undermining of democratic institutions in the United States were subject to blocking sanctions. Now, any state or state-related organisation can be sanctioned.
Third, the range of actions subject to sanctions has been expanded. In particular, they include actions to undermine the “peace, security and territorial integrity” of the Republic of Belarus, corruption, the violation of freedom of speech and press, etc.
Simultaneously with the issuance of the decree, the US Treasury announced blocking sanctions against 23 individuals and 21 organisations in the Republic of Belarus.
They include: Belneftegaz, Belaruskali, Belkaztrans, Absolutbank, Energo-Oil, New Nafta Company, Dana Holding, Dana Astra, Oil Bitumen Plant, Bremino Group, Dubai Water Front, Emirates Blue Sky, Inter Tobacco, New Oil Company Vostok, Intersevis, and Neman Tobacco.
To this list we need to add nine more large companies, according to which at the beginning of June this year the general license was not renewed. That is, they were no longer exempt from the sanctions.
In part, this list overlaps with the list of 78 organizations specified by the European Union when it introduced
its restrictions in June. Brussels also used sectoral sanctions, but their principle is different from the American one. In particular, certain categories of petroleum products and potash fertilisers were prohibited from being imported into the EU, but significant concessions were made. In the American case, there are no such indulgences. Specific companies are blocked. The general license for Belaruskali, exempting it until December 2021, can be considered a weak consolation. However, such a license is only needed to wind up existing transactions and its extension is far from guaranteed. Along with the US and the EU, the UK has also introduced
new sectoral and blocking sanctions, as well as
Canada and
Switzerland.
The effect of US sanctions will be much stronger in comparison with the restrictive measures of the EU and other countries. This is due to the persistence of US authorities in enforcing compliance, targeting companies, organisations and individuals that violate their sanctions regimes. Over the past 10 years, EU businesses have been slapped with hefty fines by the US Treasury. Their aggregate volume, since 2009, is nearly
5 billion US dollars.