Release of Surapin, Basharymau as Signal to Russia and West
A diplomatic row between Minsk and Stockholm overshadowed developments that may strain relations between Belarus and Russia.
23.08.2012 / 11:26
Experts of Russia’s Investigative Committee have been directed to probe petroleum exports from Belarus, reported RIA Novosti in mid-August with reference to a source in Russian government circles. Moscow continues analyzing “dubious exports of solvents, diluents and lubricants” from Belarus, as Russian companies were also involved in those schemes, the source said.
Russian officials have repeatedly expressed concern about a dramatic increase in the export of solvents and diluents from Belarus. The Russian finance ministry fears that Belarus may be exporting crude oil and petroleum products as organic solvents, Deputy Minister Sergei Shatalov said in late June.
Under an agreement with Russia, Belarus is required to levy a duty on petroleum products exported from its territory and transfer it to the Russian treasury.
Russia sells Belarus crude oil at a discounted price. Dubious schemes emerged because of a price difference in and outside the Customs Union of Belarus, Kazakhstan and Russia.
Belarusian oil companies linked to the government reportedly imported gasoline from Russia, added some isopropyl alcohol in it and resold it as solvents or diluents without paying the export duty to Russia.
Sergei Agibalov, an expert at Russia’s Institute for Energy and Finance, Russia lost at least $700 million because of the re-export by Belarus of Russian petroleum products as solvents and diluents last year. “This year the losses may increase to $2 billion, a significant amount for the Russian budget,” Agibalov said in a recent interview with BelaPAN.
Belarus’ export of solvents and diluents jumped 8.6-fold from 242,000 tons in 2010 to 2,073,000 tons in 2011, whereas Russia exported only 16,900 tons, said Russia’s Federal Customs Service.
The Federal Customs Service noted that both Belarus’ import of Russian petroleum products and its export of “solvents” to Latvia increased 6.3-fold, and that Belarus reduced the export of petroleum products to the Netherlands by 20 percent year-on-year in the second half of 2011 but started exporting solvents to that country.
The Russian media accused Belarusian authorities of smuggling. However, the scheme would not be possible without Russian companies’ involvement.
Not a single big Russian company operates without protection from top Russian officials. The Russian authorities turned a blind eye to solvent exports from Belarus last year.
From the technical point of view, Belarus has not broken any agreements. It acted in compliance with the country’s technical standards. The Russian authorities were not able to break up the scheme. However, they suspended deliveries of naphtha used for making solvents, citing the lack of rail tanks.
The incident compromised the Customs Union and the Common Economic Zone of Belarus, Kazakhstan and Russia. As long as Russia sells energy below the market price, businesspeople in member countries will seek loopholes to cheat each other and make fortunes. The dispute may also mark the end of a honeymoon in relations between Minsk and Moscow. Minsk has repeatedly cheated on its partner, while the latter has limited its reaction to strong-worded statements.
Now that Russia has suspended exports of materials for solvents, Belarus’ exports may decrease by as much as 10 percent, causing its trade to swing from surplus into deficit.
In a separate development, Russian Foreign Minister Sergei Lavrov stayed in Minsk on August 14 and 15 amid tensions between Minsk and the European Union heightened by a diplomatic row between Belarus and Sweden.
Lavrov might have discussed security issues with Aliaksandr Lukashenka. Moscow might have tried to seize the opportunity provided by Belarus’ security lapse after a Swedish light plane had made an illegal flight over Belarus to press for finalizing the Common Regional Air Defense System (CRADS). Although the two governments signed and ratified the CRADS accord, the system has not been functioning without a commander. Lavrov might have recommended that a Russian general take command of Belarus’ air defense system.
Lukashenka took an asymmetric response. He released Anton Surapin and Siarhiej Basharymau, suspected of helping Swedes to mastermind the illegal flight over Belarus and drop pro-free speech teddy bears on Belarusian cities, on their own recognizance before trial. The move came after a Russian judge sentenced three members of punk band Pussy Riot to two years in jail each for belting out a profanity-laced anti-Kremlin song inside a cathedral.
The Belarusian leader sent a signal both to the West and Russia. He made it clear to the West that he is not as brutal dictator as the Russian leader and warned Moscow that he may free political prisoners and build closer ties with the West if the Kremlin keeps up pressure on him.