Belarus -- Sanctions Compliance Regulatory Overview

**Executive Order (E.O.) 14038 "Blocking Property of Certain Persons Contributing to the Situation in Belarus" (August 9, 2021):** Expands the scope of the national emergency declared in E.O. 13405, authorizing blocking of property and interests in property of individuals and entities involved in undermining democratic processes, human rights abuses, and corruption in Belarus.

**E.O. 14065 "Blocking Property of Certain Persons Contributing to the Situation in Ukraine" (February 24, 2022) and subsequent actions:** While primarily aimed at Russia, Belarus's involvement in facilitating the invasion has led to parallel designations and prohibitions, particularly concerning its financial sector and state enterprises.

**Specially Designated Nationals and Blocked Persons (SDN) List:** OFAC designates numerous Belarusian individuals (including President Lukashenka, his family members, and high-ranking officials) and entities (state-owned enterprises, banks, defense companies) to the SDN List. U.S. persons are generally prohibited from transacting with SDNs, and their property and interests in property subject to U.S. jurisdiction are blocked.

**Sectoral Sanctions Identifications (SSI) List:** Though less prevalent for Belarus than for Russia, certain entities may be subject to more limited restrictions, e.g., on debt or equity.

**OFAC Compliance Framework:** VASPs must implement robust, risk-based compliance programs that include:

**Management Commitment:** Clear support for compliance.

**Risk Assessment:** Identifying inherent and residual sanctions risks.

**Internal Controls:** Policies and procedures to mitigate identified risks (e.g., KYC/CDD, transaction screening, geographic restrictions).

**Testing and Auditing:** Regular review of the program's effectiveness.

**Training:** Ensuring staff understand their responsibilities.

**Virtual Currency Guidance:** OFAC has issued specific guidance clarifying that sanctions obligations apply to all participants in the virtual currency ecosystem. VASPs are expected to implement tools and processes to identify, prevent, and report sanctioned transactions. This includes screening wallet addresses, IP addresses, and transaction metadata.

OFAC Sanctions Compliance Guidance for the Virtual Currency Industry

**Geographic Restrictions:** Prohibitions extend to transacting with sanctioned entities/individuals located in or ordinarily resident in Belarus, or otherwise linked to the Belarusian regime as per specific designations.

Council Regulation (EC) No 765/2006, as extensively amended, still serves as the core EU sanctions framework on Belarus but now goes well beyond initial asset freezes and travel bans, encompassing a wide range of sectoral and economic restrictive measures in addition to listings of individuals and entities.

Council Regulation (EU) 2022/355 (March 2, 2022, and subsequent amendments): This regulation significantly broadened the scope of sanctions in response to Belarus's involvement in the Ukraine war.

**Specific Inclusion of Crypto-Assets:** The EU explicitly extended the definition of "transferable securities" and "money-market instruments" to include crypto-assets, effectively bringing them under the scope of existing financial restrictions (asset freezes, prohibitions on making funds available). It also prohibited the provision of crypto-asset wallet, account, or custody services to Belarusian persons or entities, with limited exceptions.

Council Regulation (EU) 2022/355 and its amendments have been superseded by more recent EU sanctions, including the 20th sanctions package (April 2026) which amended Council Regulation (EU) No 765/2006 concerning Belarus, and the broader sanctions framework continues to evolve beyond these specific regulations.

The scope of EU sanctions on Belarus was expanded in December 2025 to include measures targeting hybrid activities that undermine democracy and the rule of law, as per Council Regulation (CFSP) 2025/2601 amending Regulation (EC) No 765/2006.

Asset freezes on listed individuals and entities.

Prohibition on making funds and economic resources (including virtual assets) available to listed persons.

Restrictions on access to EU capital markets.

Trade restrictions on certain goods (e.g., dual-use goods, industrial goods, timber, potash, energy products).

Restrictions on financial flows to/from Belarusian entities.

**EU Consolidated List:** The EU maintains a consolidated list of persons, groups, and entities subject to EU financial sanctions, which includes numerous Belarusian officials, military personnel, state-owned enterprises, and entities involved in sanctions evasion or support for the regime.

EU Sanctions Map (for overview)

EU Restrictive measures concerning Belarus (Contains links to the latest consolidated list)

**Know Your Customer (KYC) / Customer Due Diligence (CDD):** Robust procedures to identify and verify customers, including beneficial owners.

**Transaction Monitoring:** Systems to detect suspicious transactions, particularly those involving high-risk jurisdictions or known sanctioned entities/individuals.

Screening all customers and transaction counterparties against the EU Consolidated List (including the expanded scope for hybrid activities) and other relevant national lists.

**Geographic Restrictions:** Prohibitions on transacting with or providing services to sanctioned Belarusian entities or individuals, as well as general prohibitions on circumvention.

**Relevance for VASPs:** While there isn't a "UN Sanctions List for Belarus" that directly impacts crypto, VASPs must comply with the UN Consolidated Sanctions List as a baseline. Any individual or entity designated by the UNSC, regardless of their nationality or location, is subject to asset freezes and other restrictions by all UN member states.

UN Security Council Sanctions Committees

**Comprehensive Screening:** VASPs must screen all their customers (individuals, entities, beneficial owners) and, where technically feasible, their transaction counterparties against:

Any relevant national sanctions lists of the jurisdictions in which the VASP operates or has customers.

**Perpetual/Ongoing Screening:** Screening should not be a one-time event but an ongoing process, as sanctions lists are updated frequently.

**Technology Solutions:** Utilizing blockchain analytics tools and sanctions screening software that can identify connections to sanctioned addresses, entities, and individuals is critical. This includes identifying direct and indirect exposure.

**Prohibited Engagement:** Generally, VASPs and individuals subject to OFAC or EU jurisdiction are prohibited from engaging in any transactions or activities that directly or indirectly involve sanctioned Belarusian individuals, entities, or sectors.

**Circumvention:** Any attempt to circumvent these sanctions, including through the use of virtual assets, is also prohibited and subject to severe penalties. This includes facilitating transactions for sanctioned parties, even if they are located outside Belarus, or structuring transactions to obscure the involvement of a sanctioned person.

**Restricted Services:** For example, the EU explicitly restricts the provision of crypto-asset wallet, account, or custody services to Belarusian persons or entities, with limited exceptions.

**Civil Penalties:** Can reach millions of dollars per violation, often determined on a strict liability basis (i.e., intent is not required for a violation to occur).

**Criminal Penalties:** For willful violations, individuals can face fines of up to $1 million and imprisonment for up to 20 years. Corporations can face fines in the millions.

**Reputational Damage:** Significant and lasting damage to a company's reputation and its ability to operate globally.

**Member State Dependent:** Penalties are determined by individual EU member states but are required to be "effective, proportionate and dissuasive."

**Typical Penalties:** Can include significant fines (often in the hundreds of thousands or millions of Euros) and imprisonment for serious criminal offenses.

**Loss of License:** For VASPs, non-compliance can lead to the revocation of their operating licenses.

Belarus Decree No. 8 has been superseded or amended by subsequent decrees, including Decree No. 19 (January 2025) on cryptobanks, and is no longer the sole or current digital asset legislation.

**High-Tech Park (HTP) Administration:** This is the primary body responsible for overseeing and regulating crypto activities within its special legal regime. Companies wishing to engage in crypto activities must become residents of the HTP and adhere to its specific rules and regulations.

**National Bank of the Republic of Belarus (NBB):** While the HTP framework handles most crypto-specific regulations, the NBB maintains general oversight over financial stability, payment systems, and issues related to fiat currency. It monitors risks associated with virtual assets, particularly concerning their interaction with the traditional banking system and potential for money laundering.

**Financial Monitoring Department of the State Control Committee (FMD SCC):** This body is responsible for preventing money laundering and financing of terrorism (AML/CFT). Crypto operators, as financial institutions, are subject to AML/CFT requirements supervised by the FMD SCC.

**Website:** https://www.kgk.gov.by/en/ (English page of the State Control Committee)

**Decree No. 8 "On the Development of the Digital Economy" (dated December 21, 2017, effective March 28, 2018):**

This landmark decree legalized cryptocurrencies, tokens, ICOs (Initial Coin Offerings), smart contracts, and mining operations within the HTP framework.

It granted residents of the HTP significant tax benefits (exemptions from corporate tax, VAT, and individual income tax on crypto-related income until January 1, 2023, though discussions on extension or modification occur).

It established a legal basis for "crypto-platforms" (exchanges) and "operators of token services" (custody, issuance, etc.).

It defines various types of tokens (utility, security, payment) and sets rules for their circulation.

**Reference (HTP overview):** https://www.park.by/development/digital-economy/ (This page on the HTP website discusses the decree and its implications, though a direct PDF of the decree in English is often found via legal resources rather than direct government links).

**Decree No. 222 (dated June 28, 2021):**

As of September 2025, President Lukashenko urged regulators to finalize clear crypto rules, indicating that earlier decree amendments have not yet achieved settled, transparent regulation; the regulatory environment is still evolving.

**Legally Permitted and Regulated:** Crypto trading, exchanges, and other related services (such as ICOs, token issuance, and custody) are legally permitted and regulated in Belarus. However, these activities *must be conducted by residents of the High-Tech Park*.

In Belarus, entities can operate crypto services either as HTP residents or through newly licensed crypto banks, which allow handling 11 types of transactions in 26 currencies, potentially offering an alternative to HTP residency.

**Tax Benefits:** HTP residents involved in crypto activities historically benefited from significant tax incentives, making Belarus an attractive jurisdiction.

OFAC's General License 14 issued in March 2026 authorizes certain transactions under the Belarus Sanctions Regulations, indicating that while the legal framework is clear, recent regulatory action has reduced some implementation hurdles.

**Banking Difficulties:** Belarusian crypto exchanges and operators struggle to obtain and maintain correspondent banking relationships with international banks. Many global financial institutions are de-risking and avoiding transactions with Belarusian entities due to the extensive international sanctions imposed on Belarus following political events and its involvement in the conflict in Ukraine.

Belarus has legalized crypto banks, enabling conversion between fiat currency and cryptocurrency through traditional banking channels, which improves accessibility for users.

**Reduced International Participation:** The practical difficulties have significantly hampered Belarus's ambition to become a global hub for digital assets, despite its progressive legal framework.