The EU is preparing to strengthen sanctions against Belarus and close a loophole that has allowed Moscow to import luxury cars and other Western products banned in Russia in response to the war in Ukraine.

The bloc has already imposed several rounds of sanctions on the regime of Belarusian leader Alexander Lukashenko for supporting Russian President Vladimir Putin’s full-scale invasion of Ukraine. But restrictions on Belarus have been weaker than those on Russia, allowing the Kremlin to use its ally as a backdoor for Western goods for the war effort as well as luxury items.

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

The new sanctions would ban exports to and through Belarus of technology and goods that could have military uses, as well as liquefied natural gas. The EU would also stop importing diamonds from Belarus, mirroring a recent ban on stones of Russian origin.

If they are adopted by the bloc’s 27 member states, one of the major flows that would be slowed by the new sanctions would be that of luxury cars. Under the current system, European carmakers can still sell their premium vehicles to Belarus, but not to Russia.

“The people around Lukashenko who had ties to Russia were the big beneficiaries. They were getting rich. . . We also know that this is how luxury goods enter Russia – via Belarus,” said Vytis Jurkonis, project director at the Freedom House think tank in Vilnius.

The monthly flow of vehicles and vehicle spare parts from EU states to Belarus increased from $50 million in January 2022 to $268 million in January 2024. It is now the largest component of EU-Belarus exports, largely from Germany and Poland.

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The biggest increases in exports were recorded in the most expensive categories of cars, those targeted by EU sanctions against Russia. EU customs officials say Belarusian companies have become a key part of Russian smuggling chains that supply the latest Western cars to Moscow.

Russian documents reveal that a Rolls-Royce Cullinan Black Badge, built in late 2022, was registered as entering Russia via a Belarusian source. The car, valued at $630,000 in filings, was in Russia nine months after leaving the factory.

The same trade data also reveals that at least 28 Maybachs, a luxury brand owned by Mercedes-Benz, entered Russia through Belarusian suppliers in 2023. These cars had an average price of $217,000.

“For a Russian, having a car in Belarus is not a problem,” Lithuanian Prime Minister Ingrida Šimonytė told the FT.

Lithuania’s small customs service was struggling to cope with the “complicated” system of banned goods when inspecting goods bound for neighboring Belarus, she said, and preventing sanctions evasion was a ” very heavy workload.

Customs refused clearance 39,000 times in 2023, Vilnius said, and sent more than 15,000 risk reports to other member states, citing potential sanctions violations.

The differences between the two sanctions regimes left “very obvious holes,” Šimonytė said.

Šimonytė and Polish Foreign Minister Radosław Sikorski are pushing for the EU to move beyond current efforts to negotiate a sector-by-sector alignment of sanctions.

The best way to ensure that Russia could no longer take advantage of weaker sanctions against Belarus was to fully align the two restrictive regimes, they said.

Sviatlana Tsikhanouskaya, the exiled Belarusian opposition leader, told the FT the new package was vital but did not go far enough. “Sanctions – imposed on Russia or the Belarusian regime – cannot be effective if they are not synchronized. »

She added: “Dictators use each other to circumvent sanctions and continue to trade. The Belarusian regime buys military equipment and luxury cars. . . for Russia.”

Tsikhanouskaya also remains concerned that the EU has done little to enforce them so far. “In Europe, there is no sanctions enforcement mechanism,” she said.

It was only last year that the EU appointed a sanctions envoy to combat circumvention.