US Eases Sanctions on Belarus Potash Companies After Release

By Andrius Sytas

VILNIUS, ‌Dec 15 (Reuters) - The United States on Monday granted limited sanctions relief to three Belarusian potash companies following the European ‍country's release ‌of prisoners at the weekend, according to the U.S. Treasury Department.

Belarus on Saturday freed 123 people from jail, including Nobel laureate ⁠Ales Bialiatski and leading opposition figure Maria Kalesnikava, in a ‌deal brokered by U.S. President Donald Trump's envoy John Coale.

In return, the U.S. Treasury Department has authorised transactions involving state-owned Belaruskali and Belarusian Potash Company (BPC), and with BPC subsidiary Agrorozkvit, according to a U.S. Treasury Department general license.

The relief is conditional on "sustained improvements in behaviour" and Belarus President Alexander ⁠Lukashenko's "fulfilment of his pledge to immediately cease all politically motivated arrests", a U.S. official said.

LITTLE IMPACT EXPECTED ON GLOBAL PRICES

Potash is a key component in fertilisers, and ​the former Soviet state is a leading global producer, though analysts said they did ‌not expect the U.S. move to have much impact on ⁠the world market for fertilisers.

Potash from Belarus remains under EU sanctions, and the landlocked country has been barred from exporting via the Lithuanian port of Klaipeda since February 2022. That has forced it to re-route exports via Russia, and it has ​significantly boosted sales to China.

"Belaruskali was already nearly at full production as potash trade flows have shifted since the sanctions began. So, while some potash from Belarus may be exported to the U.S. again, it shouldn't have a large impact on the global potash supply and demand dynamics, which tend to inform prices," said Seth Goldstein, analyst at Morningstar.

Belarus accounted for around 5% of ​U.S. potash ‍imports in 2021, before the sanctions were ​introduced, said Josh Linville at StoneX.

"All in all, I am not expecting much of a fundamental price change but will be watching in case the emotion of the market has a different/bearish story," he told Reuters.

WIDE-RANGING SANCTIONS ON BELARUS

The U.S. and EU imposed wide-ranging sanctions on Belarus after Minsk launched a violent crackdown on protesters following a disputed election in 2020, and tightened the restrictions after Lukashenko allowed Belarus to serve as a staging ground for Russia's invasion of Ukraine in 2022.

On Monday, the European Union broadened sanctions ⁠on Belarus to allow it to respond to actions seen to undermine democracy, the rule of law, and overall security in member states.

Saturday's prisoner release was by far the biggest by President ​Alexander Lukashenko since the Trump administration opened talks this year with the veteran leader, a close ally of Russian President Vladimir Putin.

Trump envoy Coale told Reuters last week he believed around 1,000 remaining political prisoners could be released in coming months.

The sanctions can be reapplied at any time, and the U.S. has warned Belarus that it will not ‌tolerate any abuse of the relief to circumvent the sanctions on Russia, said the U.S. official.

(Reporting by Andrius Sytas in Vilnius; Additional reporting by Daphne Psaledakis in Washington and Ed White in Winnipeg; Writing by Stine Jacobsen; Editing by Terje Solsvik and Aidan Lewis)