EU Tightens Sanctions on Belarus to Close Luxury Goods Loophole for Russia

The European Union is tightening sanctions against Belarus, aiming to close a loophole exploited by Russia to import luxury cars and other Western goods banned due to the war in Ukraine. EU had previously imposed lighter sanctions on Belarus for supporting Russia’s invasion, which allowed Russia to use Belarus as a backdoor for essential war supplies and high-end items.

The new restrictions aim “to minimize the risk of circumvention”, according to a draft seen by the Financial Times.

The proposed sanctions aim to block Belarus from receiving certain technology, potentially useful for military purposes, along with natural gas. The EU would also cut off their diamond imports, similar to the recent ban on Russian diamonds. If approved by all EU members, a major target would be the flow of luxury cars. Right now, European companies can still sell high-end vehicles to Belarus, but not directly to Russia.

According to a Swizz data company, Trade Data Monitor, in January 2022, the EU only exported $50 million worth of vehicles and parts to Belarus each month. By January 2024, that number skyrocketed to $268 million, making it the biggest category of EU exports to Belarus, with Germany and Poland leading the trade.

Earlier in May, the US issued a direct warning to Austria’s Raiffeisen Bank International for its continued operations in Russia.

Addtionally, US President Joe Biden signed a bipartisan bill that bans the import of uranium from Russia, setting a precedent for sanctions against Russia’s dominant nuclear industry.