The EU General Court last Wednesday rejected the request of Belaruskaya Kaliynaya Kompaniya (Belarusian Potash Company, BKK), an export subsidiary of Belarus’ potash giant Belaruskali, to lift the bloc’s sanctions against it.
The Belarusian company sought the annulment of the EU Council decisions of June 2022 and February 2023 to add BKK to the lists of sanctioned entities in response to Russia’s full-scale invasion of Ukraine in February 2022.
BKK was sanctioned on the grounds that it is the exporting arm of state-owned Belaruskali, is a major source of revenue for the Alexander Lukashenko regime, and the state guarantees its monopoly rights to export potassium fertilisers. The company benefits from preferential treatment by the Minsk regime, accounting for 20 percent of global potash exports.
According to the General Court, even though Belarusian presidential decrees in March 2022 formally opened up the potassium fertiliser export market, “BKK continues to enjoy regime-backed privileges and remains the dominant player”.
“It uses official seals and documents with state symbols, and avoids the usual procedures required for export licenses,” the court noted in its judgement.
Although BKK disputed the Council’s argument that it is the exporting arm of Belaruskali, the court stated that Belaruskali holds 48 percent of the company’s shares and state-owned Belarusian Railways owns 42 percent.
“It should be borne in mind that 90 percent of the applicant’s shares are held by public entities [...]. This means that the applicant may pay dividends to those public entities, through which the funds from those dividends are transferred to the state,” the court said.
“Since the criterion of support for the Lukashenko regime covers, in particular, persons and entities financially supporting it, those payments constitute a form of financial support,” it added.
BKK “makes it possible for Belaruskali to export potassium fertilisers outside Belarus and thus enables it to increase revenue and foreign currency for the state”, the court said.
Belaruskali generated 2.3 billion US dollars (2.15 billion euros) in revenue in 2019, it noted.
Latvia participated in the case as a third party, supporting the EU Council's position that the action should be dismissed.
Belaruskali’s fertiliser exports via Lithuania were halted in February 2022 after the government ordered state-owned Lietuvos Geležinkeliai (Lithuanian Railways, LTG) to terminate its long-term contract with the Belarusian company, stating that it was not in line with national security interests.
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