Court annuls EU sanctions against Belshina
EU sanctions against Belshina have now been annulled (Photo: Stephen Goodchild / Tyre Industry Publications Ltd)
The Court of Justice of the European Union’s General Court has lifted sanctions against Belarusian tyre maker Belshina (Belshyna AAT). Last week, the General Court annulled the Council of the European Union’s sanctions and ordered the Council to pay for court costs.
On 2 December 2021, the Council of the EU imposed sanctions against firms and individuals in Belarus in response to allegations of human rights violations. It included Belshina in these sanctions as it considered this leading state-owned company and major tyre maker a “substantial source of revenue” for the Lukashenko regime. The Council of the EU argued that as the Belarussian State was “directly profiting” from Belshina’s earnings, the tyre maker thus “supports the Lukashenko regime.” The decision was additionally influenced by allegations that Belshina dismissed employees who protested and went on strike in the wake of the 2020 presidential elections in Belarus. The Council of the EU thus listed Belshina under Article 2(4) and (5) of Council Regulation (EC) No 765/2006 for supporting the Lukashenko regime and for the repression of civil society.
No significant income from unprofitable company
Belshina argued that, although a major state-owned tyre maker, it was unprofitable in the years prior to the sanctions. The company recorded a net loss of BYN 71,088,000 (approximately €30.4 million) in the 2019 financial year and BYN 216,290,000 (approximately €77.9 million) in 2020. It paid net income tax of €34,000 from 2019 to 2020 and received more in VAT refunds than it actually paid to the government. Therefore, the General Court determined that Belshina was not generating “significant income from which the Belarusian State directly benefits.”
The Court was also unable to show that Belshina dismissed employees because of their strike and protest against the Lukashenko regime.
Ruling on Belshyna AAT’s case against the Council of the European Union (Case T‑115/22), on 20 March 2024, the Court annulled Council Implementing Decision (CFSP) 2021/2125 of 2 December 2021, and ordered the Council of the European Union to pay court costs.
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