On 29 June 2024, the EU adopted new sanctions against Belarus with Regulation 2024/1865 (hereinafter Amendment Regulation) to Belarus Sanctions Regulation No. 765/2006 (hereinafter Sanctions Regulation), amending existing sanctions, defining new compliance requirements and clarifying important compliance issues – similar to the 14th EU sanctions package against Russia. The Amendment Regulation entered into force on 1 July 2024.
The EU sanctions against Belarus are not identical in content to the EU sanctions against Russia and therefore require a separate examination by EU economic actors.
However, the ongoing problem and risk of circumventing EU sanctions against Russia also requires some coordination between the partly different and partly congruent EU sanctions against Russia and Belarus. For this reason a so-called No Belarus clause was included in the aforementioned Amendment Regulation following the example of the EU sanctions against Russia and their No Russia clause for the same sensitive goods with predominantly the same content.
I. Significant changes
The Amendment Regulation essentially contains the following measures:
- The export bans will be extended to other dual-use items
- Export restrictions will be imposed on other goods that could contribute to strengthening Belarus’ industrial capacities
- The transit of certain dual-use goods and technology through Belarus is prohibited
- Other export restrictions include maritime goods and technologies and luxury goods
- The ban on importing, buying and reselling diamonds from Belarus has been clarified
- The import of gold, coal and crude oil is banned
- The provision of certain services (e.g. architectural and engineering services, IT and legal advice, advertising and technical inspection services) to Belarusian contracting authorities will be prohibited
- In the case of the sale, supply, transfer or export of certain sensitive (war-relevant) goods from different product groups, EU exporters must contractually prohibit their business partners in third countries from re-exporting to Belarus or for use in Belarus (= No Belarus clause)
II. Simultaneous clarifications of the Amendment Regulation
The Amendment Regulation like the Amendment Regulation (2024/1745 of the 14th sanction package) to the EU sanctions against Russia of Regulation 833/2014 provides certain clarifications on compliance issues and imposes the same compliance requirements on EU economic operators for war-relevant goods (= Common High Priority Items, Battlefield Goods).
The clarifications are primarily intended to prevent circumvention of EU sanctions.
1. Clarification on circumvention
Article 1m is reworded after the Amendment Regulation, which following the ECJ jurisdiction (C-72/11, Afrasiabi) makes it clear that participation in circumvention is prohibited not only in the form of an intentionally committed act but also in the form of conditional intent according to which circumvention of the sanctions is merely considered possible and this possibility is accepted with approval. The line to prohibited participation in a circumvention is therefore much narrower than could previously be read from the original provision on circumvention. The amended provision therefore reads as follows (bold emphasis is mine):
Art. 1m
“It shall be prohibited to participate, knowingly and intentionally, in activities the object or effect of which is to circumvent prohibitions in this Regulation, including by participating in such activities without deliberately seeking that object or effect but being aware that the participation may have that object or effect and accepting that possibility.”
2. Clarification on the obligation to undertake best efforts
Against the background of the circumvention of EU sanctions against Russia and Belarus via third countries Art. 8i has been newly included in the Sanctions Regulation, which corresponds to Art. 8a of the Russia Sanctions Regulation 833/2014 (bold emphasis is mine)::
Art. 8i
“Natural and legal persons, entities and bodies shall undertake their best efforts to ensure that any legal person, entity or body established outside the Union that they own or control does not participate in activities that undermine the restrictive measures provided for in this Regulation.”
Recital 33 of the Amendment Regulation explains what the EU means by “undertake their best efforts”. In essence, it calls for an Internal Compliance Program (ICP) for the EU economic operator that is appropriate to the respective risk. Further information on the EU Commission’s ideas in principle on such an ICP can be found in its guide of 8 Sept 2023 (Guidance for EU operators).
3. Clarification on the mitigating voluntary self-disclosure
In recital no. 35 the Amendment Regulation refers to the EU Directive on the harmonization of criminal offences in the event of sanctions violations and their punishment (2024/1226). The implementation of this directive will lead to a tightening of the prosecution and punishment of sanctions violations throughout the EU – including in Germany. Nevertheless, a voluntary, complete and timely self-disclosure should have a mitigating effect. A successful voluntary disclosure is often the product of an functioning ICP.
III. No Belarus Clause
The No Belarus clause pursuant to Art. 8g of the Amendment Regulation corresponds in content to the No Russia clause in Art. 12g of Russia Regulation 833/2014 even if the respective Roman numerals of the Annexes to Goods, the dates and Arabic numerals of the paragraphs differ.
U economic operators who want to sell goods covered by the Annexes to a third country that is not an EU partner country are therefore obliged to agree on a corresponding contractual clause. The EU Commission had proposed a corresponding model clause for Russia in its FAQ. This model clause can also be used for Belarus, or both cases can be combined in one clause.
Even more important than the use of such a clause, however, is the preventive compliance task for particularly sensitive goods of Annex XXX (war-relevant, battlefield, common high priority items), which is defined in Art. 8ga of the Sanctions Regulation (bold emphasis is mine):
Artikel 8ga
“1. Natural and legal persons, entities and bodies that sell, supply, transfer or export common high priority items as listed in Annex XXX to this Regulation shall, as of 2 January 2025,
(a) take appropriate steps, proportionately to their nature and size, to identify and assess the risks of exportation to Belarus and exportation for use in Belarus for such goods or technology, and ensure that those risk assessments are documented and kept up-to-date.
(b) implement appropriate policies, controls and procedures, proportionately to their nature and size, to mitigate and manage effectively the risks of exportation to Belarus and exportation for use in Belarus for such goods or technology, whether those risks were identified at their level or at the level of the Member State or of the Union.
2. Paragraph 1 shall not apply to natural and legal persons, entities and bodies that sell, supply or transfer common high priority items as listed in Annex XXX only within the Union or to countries listed in Annex Vba to this Regulation.
3. Natural and legal persons, entities and bodies shall, as of 2 January 2025, ensure that any legal person, entity or body established outside the Union that they own or control and that sells, supplies, transfers or exports common high priority items as listed in Annex XXX implements the requirements in points (a) and (b) of paragraph 1.
4. Paragraph 3 shall not apply where, due to reasons that it did not cause itself, a natural or legal person, entity or body is not able to exercise control over the legal person, entity or body that it owns.”
For the goods listed in Annex XXX of the Sanctions Regulation, which are identical to the goods listed in Annex XL of the Russia Sanctions Regulation 833/2014 the ICP of the EU economic operators concerned are thus subject to extended requirements. Although the date for this is only January 2, 2025, affected EU economic actors are well advised to act with foresight.
Also, officially only from 2 January 2025, affected EU economic operators are to “ensure” for their subsidiaries in third countries that no circumvention re goods listed in Annex XXX is carried out via them in accordance with Article 8ga (3) of the Sanctions Regulation. In addition, and even before 2 January 2025 the general duty of undertaking best efforts under Art. 8i of the Sanctions Regulation also applies to the goods listed in Annex XXX.
For subsidiaries of EU economic operators so far there is no explicit obligation to use a No Belarus or No Russia clause in certain sensitive cases. However, according to Recital No. 28 of the Amending Regulation the EU Commission will assess whether the clause requirement in its current form prevents circumvention or whether adjustments will be necessary such as an explicit obligation for subsidiaries owned or controlled by EU economic operators to also agree on such clauses.
IV. Result
EU economic operators exporting goods from the EU need an ICP for general export control reasons alone. This is all the more true when EU economic actors are affected by EU sanctions law. In addition, it is particularly important to maintain an effective ICP if EU economic actors are affected by the sanctions against Russia and Belarus especially with regard to the war-related goods covered by Annex XXX and XL of the two Sanctions Regulations.
As part of their due diligence EU economic operators would therefore do well to determine in an analysis their own risk at least once or repeatedly in the event of changes or even continuously to assess it and if necessary to implement risk-mitigating measures.
Article 8j also introduced an obligation for everyone to report potential or detected violations of EU sanctions against Belarus.
The effectiveness of EU sanctions against Russia and Belarus naturally depends to a substantial extent on their effective implementation and application by all parties involved. Without the appropriate attention and support of EU economic actors including through their links with third countries it will be difficult to achieve the objectives of the sanctions. Every well-functioning ICP begins with a clear commitment by the management to compliance, which is followed by a corresponding risk analysis.
