How Belarusian businesses can survive under surveillance
Photo: freepik.com
causes extremely acute relations between Belarus and the West, the appeal to our country in 2023 is highly likely to continue. Introduced restrictions on the activity of economic entities.
How does it apply to sanctions? We understand.
Prohibitions and restrictions nearby
there are Belarusian companies all over the world that recall the sanctions and problems associated with the turnover of payments in dollars and euros, i.e. in “toxic”, as they say now, currencies. During the Troubleshooting 2022 Business Security Conference in December, one of the attendees spoke about a case where a USD payment company in Armenia was blocked by the UK Financial Services Authority (OFSI).
Also, our business has come to the conclusion that a foreign bank does not like a foreign bank. Foreign companies are especially wary of the agricultural sector of Belarus, significant contracts with large enterprises, as well as suppliers of dual-use products.
“Belarusian organizations that wished to open a legal entity in Poland or Lithuania, did not pass bank compliance, and do not open accounts for them”, – stated Managing Partner at Beagle Legal Daria Zhukspeaking at the conference.
Daria Zhuk
Managing Partner at Beagle Legal
It is even lower when non-resident banks freeze the funds of Belarusian enterprises. Thus, one of the companies based in Minsk and Moscow “hit” 35 thousand EUR due to the fact that the number of Lithuanian counterparties is increasing. The Belgian correspondent bank did not like the payment.
In general, detection is not some abstract and distant phenomenon, but a fact, taking into account the presence.
It is said that currently the release of funds that have fallen under Western borders is extremely difficult.
“There is a big problem with timing. “The OFSI report gave freedom (to unlock funds) for a two-month period,” – told during the conference Head of Sanctions and Compliance Practice at NSP Moscow Law Office Sergey Glandin. – Currently, the UK authorities have been reviewing documents to release the funds for more than three months, and have not yet sent a response.
Sergey Glandin
Head of Sanctions and Compliance Practice at NSP Moscow Law Office
The good news is that the expert said that all operations of companies fall under Western sanctions. For example, if a resident of Belarus makes settlements with a sub-sanctioned enterprise in rubles, then the EU country cannot block such transfers in any way. They don’t even taste good. But settlements in dollars and euros, processed through the Western financial system, will “freeze”.
it is customary to list risks, the National Bank in November 2022 will abandon “toxic” currencies in foreign trade and switch to settlements in the currencies of “friendly” countries. This recommendation, the observed manifestations and the persistence of Western manifestations, is also relevant in 2023.
It should also be noted that some companies reduce sanctions risks (for mutual settlements with residents of EU countries). The bad news is that the bank commission for transactions to Poland, Lithuania, Turkey is not cheap now and reduces 0.5% of the amount of money.
Sanctions are not a hindrance if there is money
Problems affecting the Belarusian business are covered not only with finances, but also with commodity flows. It has gotten to the point that some Western companies often supply Belarus with medical devices necessary for complex operations.
Imports of industrial goods related to diseases of the nervous system arose due to receipts even earlier. However, if you have a great desire and money, then in principle you can buy anything. Residents of Belarus and Russia have different schemes that allow them to deliver the necessary goods of Western production. How it works?
One of the options is that residents of the Republic of Belarus and the Russian Federation register a new legal entity in the EU, which registers the receipt of Western-made goods, and then redirects it to the Belarusian or Russian part. More sophisticated schemes are based on fictitious processing and several intermediaries to import familiar goods that cannot be obtained naturally.
It is intermediaries in “unfriendly” or neutral countries that make it possible to deliver almost any product to certain territories of Russia and Belarus. True, due to various circumvention schemes, the cost of shipping some Western goods has increased significantly this year. Representatives of the transport industry note that if the cost of a consignment is less than 20 thousand US dollars, it is unlikely that its transportation is economically rational.
So, despite the alleged Western sanctions, a business can import any product from Western countries, unless, of course, it is ready to pay for a significant increase in the cost of delivery.
The use of materials without the permission of the editors is prohibited. For an appeal to [email protected]