EU General Court Sustains Sanctions Listings for Russian Potash Exporter, Director, Export Wing

The EU General Court on Sept. 18 rejected a trio of cases challenging sanctions designations, brought by potassium fertilizer maker Belaruskali AAT, its director-general Ivan Golovaty and its exporting wing Belarusian Potash Company AAT.

Belaruskali was listed for being a state-owned enterprise that generates great revenues for the regime of Belarusian President Alexander Lukashenko. The company made a host of claims against its sanctions designation, including by contesting the European Council's alleged failure to show that the company "benefits from or supports the Lukashenko regime."

The court rejected all of Belaruskali's arguments, finding that the company is a state-owned venture that is one of the "biggest potash producers in the world," cornering around 20% of the global market. The director-general of the firm is appointed by Lukashenko himself, and the company pays dividends to the state as a shareholder, in addition to compulsory taxes and additional contributions for "national development."

The support from the company represents 8% to 10% of "the total budget of Belarus," the court noted. All of the evidence against the company shows that the "Council did not err in considering" that the company "was benefiting from and supporting the regime," the decision said.

The export wing of the potash maker echoed its parent firm's claims, though it was also sanctioned in part for receiving preferential treatment from the Belarusian authorities due to its "monopoly rights to export" potash. The court said that the council didn't err in finding that the "position occupied by the applicant in the Belarusian economy and the fact that it represented a source of revenue for the Lukashenko regime were sufficient for it to be considered that the applicant benefited from and supported that regime."

Lastly, the court sustained the sanctions designation for Belaruskali's director-general, given the council's findings linking Golovaty to the actions of the company warranting designation.