Page 64 - bne Magazine February 2023

64 I Eastern Europe bne February 2023
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How companies in Central Asia help Belarus bypass Western sanctions
In a recent investigation, Belarus’ Investigative Centre (BIC) has revealed how private companies in Central
Asia, often set up by former Belarusian government officials, help customers to circumvent the EU sanctions.
Minsk’s new tricks
In late June 2022, Belarus classified its trade statistics not only with Western countries but also with the CIS countries; a convenient timing, as EU wood imports from Kazakhstan and Kyrgyzstan began rising rapidly immediately after the EU sanctions came into effect in June. By October 2022, the EU’s wood imports from Kazakhstan and Kyrgyzstan had risen by 74 and 18,000 times year on year respectively. In total, this amounts to €30mn in export revenues for the two Central Asian countries.
There’s certainly something fishy
about this increase, since Kazakhstan and Kyrgyzstan only have 5% and 6% respective coverage in woodland area; Belarus’ forest cover, on the other hand, is 40%, according to Belarus’ Ministry of Forestry. In June and August last year, Kazakhstan’s government and Kyrgyz authorities also prohibited the export of certain wood products in order to protect their domestic wood industries.
Wary of Minsk’s new tricks, Lithuanian customs were the first to notice this sharp increase in wood imports from Central Asia. According to the deputy
bne IntelliNews
In the EU’s 2022 March sanctions package against Belarus, sanctions were expanded to cover all wood working products (i.e. everything under customs code 44). Moreover, the Forest Stewardship Council (FSC) chose to suspend its trading certificates for Belarus, which made it even harder
for Belarus to sell its products on the global market.
The including of products under customs code 44 in the EU sanctions has resulted in a drop of more than 30 times for the export of Belarusian wood products to the EU since June 2022.
Woodwork products are an important extra income for the Belarusian state budget and have previously been especially expanded during times when major income sources such as revenues from refined oil products falter. This year, Western sanctions have deprived Belarus of some major export revenues meant for its state budget such as those derived from fertiliser and oil product exports.
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However, Minsk was not about to roll over and accept that its woodwork products had been shut out from the EU market. On September 5, 2022, Belarus’ Deputy Prime Minister Piotr Parkhomchik told state Belarusian media that “there will be private companies that will build bridges so that the products (woodwork products)
“There will be private companies that will build bridges so that the (woodwork products) we produce could enter the European market”
we produce could enter the European market.” A few days later, the chairman of Belarus’ State Customs Committee, Vladimir Orlovsky, said that Belarus’ “old tricks” weren’t working anymore. Instead, Belarus would have to resort to “unconventional approaches” to get around Western sanctions.
director of Lithuanian customs, Vygantas Paigozinas, “The tell-tale signs are absolutely undeniable. We find markings on packaging, extra sets of documents that directly show that the goods come from Russia or Belarus and not from the countries in which the declaration was made at the initial stage. There are such cases, we recorded it, and not just one.”