What threatens Belarus with new sanctions of the USA against Russia

The U.S. Congress overwhelmingly finally approved a bill on new sanctions against Russia, Iran and North Korea. On June 27 the Senate by 98 votes to 2 upheld the document. Earlier in the House of representatives the bill was adopted by 419 votes to 3.

Now he will be sent for signature to President Donald Trump, who may veto it. But even if he does, Congress can override the presidential decision. For this it is necessary to secure a two-thirds majority in each chamber. Judging by the results of past polls, to circumvent the veto will not be difficult.

“The United States of America have to give to Vladimir Putin and all the other aggressors a clear signal that we will not tolerate attacks on our democracy. Over the past eight months what price to pay Russia for interfering in our elections? Very low,” said one of the most active supporters of a rigid line in relations with Russia, Republican Senator John McCain.

Who is affected by sanctions?

As Russian media reports, the new sanctions in case of their entry into force can be the most large-scale in 2014.

The bill expands the sectoral restrictions against the Russian economy. In particular, it reduces the period of financing of Russian banks and oil and gas companies under U.S. sanctions, from 30 to 14 days and from 90 to 60 days, respectively.

In addition, the prohibition may be subject to investment, purchasing a significant proportion of equity or debt instruments of entities under sanctions. In the case of sanctions, the U.S. government will not be able to enter into transactions with them on procurement of goods and services.

The United States may also prohibit the supply of equipment and new technologies for deepwater or Arctic offshore projects, in which Russian sanctioned companies owns 33% or more.

The document also provides for other measures, but the most significant of them can touch individuals and companies that intend to invest in the construction of Russian export pipelines to submit such projects, services, technology and information support.

One of these is the pipeline “Nord stream-2”, which connects Russia and Germany via the Baltic sea.

Sanctions will slow the Russian economy and slow down the Belarusian

If the US will impose new sanctions against Russia can negatively affect the Belarusian economy, which is heavily tied to the Russian market.

In particular, the restrictive measures can theoretically affect the work of Belarusian banks, many of which are subsidiaries of Russian banks.

“If we are talking about Russian banks, there’s reduced credit terms. That is, these banks will not be able to attract long-term borrowing in Western markets. This does not mean an automatic loss, but we can talk about reducing the profitability of these banks, the potential for earning money. And if these banks are subsidiaries work in Belarus, and there were plans for a dramatic increase in their capital, these plans can be adjusted,” — said in comments to Naviny.by analyst Forex broker “Alpari” Vadim Iosub.

However, in his opinion, “the threat that Russian banks will fall and, accordingly, will lay down their Belarusian girls, no.” “That is, it can be expressed in the slowdown, but not a problem for the depositors of these banks”, — said Vadim Iosub.

At the same time, the expert believes that Russian banks are unlikely to reduce the financing of large projects in Belarus, despite some deterioration in economic conditions.

“Many of the interstate projects tied to political considerations rather than on the economy”, — said Vadim Iosub.

Most of the Belarusian economy will suffer if US sanctions will affect the Russian oil and gas projects.

“These projects are in the form of joint ventures. There, in particular, we are talking about European funding, and European technology. And if sanctions are adopted, it means that the European partners of these projects will get out of them,” — said the expert.

“Theoretically, Russia can continue these projects on their own, but to find an alternative technology and financing would be extremely difficult. It is, in fact, would mean the suspension of these projects indefinitely,” said senior analyst of Forex broker “Alpari”.

The suspension of these projects, he continues, will mean a significant slowdown of the Russian economy “here and now” that almost immediately feel the Belarusian economy in the form of lower demand from Russia.

Us sanctions against Russia have negative implications for the Belarusian economy, agreed financial analyst Research group BusinessForecast.by Alexander Mukha.

“In the case of approval of sanctions for Belarus it would be a definite negative. This could hurt economic growth, given the fact that Russia is a key trade-economic and investment partner of Belarus,” — said the expert.

In addition, the financial analyst stressed that the new sanctions may increase geopolitical uncertainty in the region, which will also affect the economy.

“This could hurt economic growth in Russia and the chain will hit us,” believes Alexander Mukha.