Tuesday

22nd May 2018

Lukashenko trying to outwit EU and Russia

Selling arms firms from yourself to yourself, labelling petrol as solvents then petrol again - Belarusian President Alexander Lukashenko is trying to make a living while being squeezed by the EU and Russia.

Lawyers in the European External Action Service are wondering what to do about Belarusian oligarch Vladimir Peftiev's latest bid to avoid EU sanctions.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

  • Putin (l) in Minsk: 'The very fact of my first foreign visit to brotherly Belarus reflects the special nature of our relations' (Photo: kremlin.ru)

Peftiev - Lukashenko's friend and alleged bag-man - is on an EU blacklist along with one of his firms, Beltekh Holding, which owns arms trader Beltechexport. But this week he sold his controlling stake in the holding firm to one Dmitry Gurinovich.

Beltekh Holding says Gurinovich is an alumnus of the Russian Presidential Academy of National Economy and Public Administration and part of the Russian presidential personnel reserve - a pool of people eligible to work in the Russian leader's chancellery.

He does not show up in the published lists of either body, however.

An EU diplomat told this website that Gurinovich in fact "used to be a former advisor or aide of Peftiev or maybe he still is."

He added that the sale is an attempt to evade EU sanctions: "Formally, if the company does not belong to the sanctioned person any more, it should be delisted."

A contact in the Berlin-based institute, the German Marshall Fund, said the transaction means "Peftiev actually sold the company from itself to itself."

Peftiev and three of his firms, including Beltechexport, already have four ongoing lawsuits at the European Court of Justice disputing EU claims that they feed Lukashenko.

Another Lukashenko-linked oligarch, Yuriy Chizh, in March got one of his companies, Belneftegaz, off the EU blacklist after Latvia intervened on his side.

According to Belarusian Tribunal, an NGO based in The Hague, Belneftegaz is part of a family of firms involved in a Russian oil scam worth $880 million a year.

Belarus imports Russian oil at domestic Russian prices. But if it refines it and sells it to Europe it has to pay Russia a duty of between $300 and $500 a tonne. The arrangement does not cover solvents and thinners made using the oil, however.

The NGO says Belneftegaz exports petrol labelled as solvent to Estonia, Latvia, Lithuania and the Netherlands, where it is bought by offshore companies linked to the Belarusian regime, re-labelled as petrol, then sold again to EU companies.

When Russian President Vladimir Putin visited Lukashenko on Thursday (31 May) in his first post-inauguration trip, he told media: "The very fact of my first foreign visit to brotherly Belarus reflects the special nature of our relations."

But in reality, Putin's embrace is more dangerous for Lukashenko than the EU's cold shoulder.

Moscow is trying to strongarm Minsk to fully implement a "state union" which would reduce Belarus to a de facto province of Russia and make Lukashenko one of Putin's regional governors.

Kremlin loans to Lukashenko have already seen it take control of his main strategic asset - the pipelines of Belarusian firm Beltransgaz, which pump Russian gas to Poland and Germany.

Belarusian Tribunal noted that "Russian authorities [are] perfectly aware" of the solvent scam "but for some unknown reason they have ignored it. It is possible the fact of oil smuggling could be used by the Kremlin against Lukashenko in future."

Investigation

Belarus: a look inside Europe's 'last dictatorship'

Lukashenko's foreign policy is defined by greed and fear. Meanwhile, beyond geopolitics, average people live in the shadow of the country's terrible 20th century history.

Sofia summit: EU leaders search for a Trump strategy

"With friends like that, who needs enemies?" European Council Donald Tusk asked on Wednesday, as EU leaders were trying to come up with a reply to the US president's questioning of the transatlantic relationship.

Analysis

EU has no 'magic bullet' against US Iran sanctions

EU leaders in Sofia will discuss how they can protect the bloc's economic interests against US threats to sanction companies doing business in Iran. But their options are limited.

Opinion

Ratifying CETA after 'Achmea scandal' is anti-European

While few people in Europe have heard of the 'Achmea' ruling, the case will have far-reaching consequences. Member states must understand the implications of the case quickly - especially those considering ratifying the EU-Canada trade agreement.

News in Brief

  1. Unknown professor proposed as Italy's new prime minister
  2. 154 German economists warn against eurozone reform
  3. Growing €176bn EU trade deficit with China
  4. All 4.8m Swedish homes get 'war preparation' leaflet
  5. Trump warns Nato allies' low budgets will be 'dealt with'
  6. Only Estonia, Greece and UK hit Nato spending target
  7. EU to start process to counter US Iran sanctions
  8. Macedonia PM sees 'possible solutions' in Greek name row

Stakeholders' Highlights

  1. Nordic Council of MinistersOECD Report: Gender Equality Boosts GDP Growth in Nordic Region
  2. Centre Maurits Coppieters“Peace and reconciliation is a process that takes decades” Dr. Anthony Soares on #Brexit and Northern Ireland
  3. Mission of China to the EUMEPs Positive on China’s New Measures of Opening Up
  4. Macedonian Human Rights MovementOld White Men are Destroying Macedonia by Romanticizing Greece
  5. Counter BalanceControversial EIB-Backed Project Under Fire at European Parliament
  6. Nordic Council of MinistersIncome Inequality Increasing in Nordic Countries
  7. European Jewish CongressEU Leaders to Cease Contact with Mahmoud Abbas Until He Apologizes for Antisemitic Comments
  8. International Partnership for Human RightsAnnual Report celebrates organization’s tenth anniversary
  9. Nordic Council of MinistersNordic Cooperation Needed on Green Exports and Funding
  10. Mission of China to the EUPremier Li Confirms China Will Continue to Open Up
  11. European Jewish CongressCalls on Brussels University to Revoke Decision to Honour Ken Loach
  12. Sustainable Energy Week 2018"Lead the Clean Energy Transition"- Register and Join Us in Brussels from 5 to 7 May

Latest News

  1. Facebook threatened with removal from EU-US data pact
  2. Defence firms 'reap benefits' of their advice to EU
  3. Athens mayor wants direct access to EU migration fund
  4. Nordics could be first carbon-negative region in world
  5. Zuckerberg and Trump top the EU's agenda This WEEK
  6. Integration of Syrian refugees in Europe needs scrutiny
  7. Bulgarian PM: No asylum reform without stronger border
  8. Eight countries to miss EU data protection deadline