Belgium Is Pushing to Dilute the EU’s Belarus Potash Sanctions

(Bloomberg) -- Belgium is trying to water down European Union sanctions on Belarus’s potash industry, in a bid to ease difficulties companies within the bloc face in implementing the measures.

Diplomats in Brussels have written to other EU member states, requesting a loosening of restrictions on Belarusian potash to allow for changes to the potassium content of fertilizer imports, according to a letter seen by Bloomberg News. 

In the letter, the diplomats argue that sanctions imposed on Belarus potash producer Belaruskali OAO earlier this year have caused an “implementation problem” for EU companies and the “potash sector should not be singled out.” 

The sanctions, that target Belaruskali as well as other business leaders and companies with ties to President Alexander Lukashenko, were imposed after the forced diversion of a Ryanair Holdings Plc flight in May.

According to the letter, a large Belgian company that supplies water to cities is facing customs issues because the grade of potash it was importing was at times higher than is allowed by the EU under the sanctions. Other firms are also facing similar problems, the document shows, and could lose out if Belarus seeks buyers elsewhere. 

A separate document seen by Bloomberg News shows that more than one EU member state is backing the request to amend potassium levels in Belarus potash, ahead of a meeting of the bloc’s diplomats this week. 

The Belgian embassy in Brussels did not immediately respond to a request for comment.

Key Export

Potash is one of Belarus’s key exports and the country’s only abundant mineral resource. In June, the EU-imposed sanctions on potash from the country with potassium content of less than 40% or more than 62%. While those grades comprised only about one-fifth of Belarusian potash sales to the bloc last year, Belaruskali’s main product was potash with 60% potassium content, that was not included in the restrictions. 

Belgium is proposing the EU allows for a deviation of as much as 2% from currently permitted levels of potassium. The letter notes that if European companies are forced to source potash supply from elsewhere, it would lead to price spikes and lower-quality potash.

Fertilizer prices have surged this year as higher crop prices helped boost farmer spending on soil nutrients. Higher nutrient costs also risk exacerbating global food inflation at a time when hunger is on the rise, particularly in poorer nations. 

©2021 Bloomberg L.P.