Belarus, EU sanctions and the $1mn bounty

EUobserver understands the provisional roll-call includes oligarch Yuriy Chizh, several companies owned by another regime billionaire, Vladimir Peftivev and a handful of officials. Peftiev is already under a visa ban and asset freeze, along with three of his firms - a decision he is currently fighting in the EU court in Luxembourg.

"You wouldn't believe how many [people] have come through here," a senior EU official told this website on the queue of NGOs, diplomats and companies telling him in recent weeks why Peftiev should be let off.

The official, as well as other sources, such as Ales Michalevic, a dissident who fled Belarus last year, says that Peftiev has put up a $1 million reward for anybody who can get him de-listed.

"I have not seen any evidence that Peftiev should be on the list. It's the police, the KGB, and the judges that should be on it," a contact from one 'anti-Lukashenko' NGO told this website. A Brussels-based 'anti-Lukashenko' NGO recently sent a letter to EU officials containing 25 names - including Peftiev's - of people who it says were put on the register unjustly.

This website is not saying who the NGOs are because it is possible that the individuals who distributed the list came under pressure to do the dirty work.

EUobserver also contacted Lawin, the Lithuanian law firm which represents Peftiev in the EU court, about the $1 million bounty, but it declined to confirm or deny the information.

Peftiev's conglomerate has a sinister side.

He is the majority shareholder and chairman of Beltechexport, the country's largest weapons manufacturer. It makes aircraft, armoured vehicles and small arms. But its main business is to act as a middleman between Russian arms firms and dictators in Africa, Central Asia, south-east Asia and South America. The US says it has sold weapons to Iran and North Korea.

"It would be a further blow to [Russian President] Putin's reputation to have Russia sell its own weapons directly to these regimes in violation of international prohibitions. So Belarus does it for him," Stanislav Shushkevich, a former Belarusian head of state, told EUobserver.

Peftiev also runs telecoms operator Beltelcom, co-runs marketing business Sport-Pari with Lukashenko's son, Dmitry, and has shares in the country's Internet provider Delovaya Set.

For his part, Chizh has a large array of businesses ranging from petrochemicals to health spas and soft drinks, many of which are active in EU countries.

EU diplomats say Latvia has now joined Slovenia in trying to protect him.

The two countries are willing to agree to the new EU sanctions but only if selected Chizh companies, which do business with their own firms, are left alone. In one example, Chizh is working with a Slovenian company, Riko Group, to build a luxury hotel and electrical sub-stations worth €157 million.

His lobbyists say the EU is wrong in describing him as a financial sponsor of the regime. But their claims are hard to believe in a country in which 70 percent of the economy is officially under state control.

Joerg Forbrig, an expert on Belarus at the German Marshall Fund, believes the wealth of the whole country of 10 million people is managed by a small circle of Lukashenko loyalists. "It's likely that Peftiev [for instance] has insights into broader business practices with the EU than just those involving the companies attributed to him," he said.

Lukashenko last week executed two young men - Uladzislau Kavalyou and Dzmitry Kanavalau, widely believed innocent - for allegedly putting a bomb on the Minsk metro.

In another case, which would be silly if it was not so frightening, 37-year-old Syarhey Kavalenka has been hospitalised after going on hunger strike. His crime was to put an opposition flag on top of a Christmas tree.

One EU diplomat said the executions have changed nothing in terms of Latvia and Slovenia's position. "Everybody knows anyway what the regime is like," he noted. He added that the sanctions decision will probably have to be made by the foreign ministers on Friday because the mid-level talks are unlikely to make a breakthrough.

Lukashenko likes to scoff at EU sanctions.

But they are a serious turn-off for foreign investors at a difficult time for the Belarusian economy and they do damage to his plan to make the country into a transit hub for EU exports and imports.

In one sign of their effectiveness, a high-ranking EU official said his envoys routinely offer to trade political prisoners for EU concessions.

No sanctions can undo what just happened to Kavalyou and Kanavalau.

But if Chizh and Peftiev get off, other EU countries plan to make Latvia and Slovenia pay a political price. "They will be held publicly accountable for their decisions," an EU diplomat said.

Correction: the story originally said Peftiev is doing business with Riko Group. In fact it is a Chizh firm which is involved in the project