New EU sanctions: can EU construction companies build in Belarus?
- What is prohibited?
- Who is prohibited from providing such services?
- Transition period
- Exceptions
- REVERA's comment
- Contact our legal team to learn more
On February 24, 2025, a new package of sanctions imposed by the European Union (EU) against the Republic of Belarus came into force. The restrictions were introduced in accordance with Council Regulation (EU) No2025/392 and Council Decision No2025/391. As part of the sectoral sanctions, the EU has banned European companies from providing construction services, including civil engineering work.
In this article, REVERA's lawyers will analyze the imposed sanctions in more detail and what it means in practice.
A more detailed analysis of the new package of EU sanctions against Belarus can be found in the previous article by REVERA lawyers.
What is prohibited?
In accordance with Article 1jc of the amended Regulation No765/2006, from 24 February 2025, it is prohibited for EU persons* to provide construction services, including civil engineering services.
EU residents include:
- natural persons inside or outside the territory of the EU who are citizens of a Member State;
- legal persons, organisations or institutions registered or established under the laws of an EU Member State;
- legal entities, organizations or institutions in relation to any activity carried out in whole or in part within the EU.
At present, the Regulation does not contain a definition of the term "construction services" and, accordingly, does not specify which types of activities are subject to the restrictions. We assume that in the near future the European Commission will issue clarifications in which it will indicate which services fall into this category, similar to what it did earlier in relation to architectural and engineering services. However, it can be assumed that construction services will be understood as a wide range of activities related to the construction (design, construction and installation works) of buildings and infrastructure.
Who is prohibited from providing such services?
As follows from Article 1jc of the updated Regulation No765/2006, restrictions on the provision of construction services do not affect all residents of Belarus. Restrictions apply to:
- state bodies, state companies*, their legal entities;
- individuals and legal entities, if they act in the interests of the persons specified above.
According to Article 1 of Regulation No765/2006, a state company means a legal entity that is not a credit institution, registered in Belarus, with a state ownership share of more than 50% or under state control as of June 1, 2021.
Thus, the restrictions apply to both state-owned enterprises and legal entities in which there is direct or indirect control by the state. In turn, the prohibitions do not apply to individuals and legal entities in which there is no direct participation of the state and which are not under state control.
Transition period
It should be noted that the Regulations do not provide for a "transition period" to allow for the provision of such services, for example, for the completion of contracts already concluded.
For comparison, in July 2024, when the EU imposed a ban on the provision of legal services to residents of Belarus, a "transition period" was established until October 2, 2024. During this period, the provision of such services was allowed, but only in cases where it was strictly necessary to complete contracts concluded before July 1, 2024, or to fulfill related agreements necessary for the implementation of contracts.
Exceptions
The Regulation establishes the following exceptions when the provision of construction services to the above companies will be considered permissible:
- services are necessary for the work of consulates or diplomatic missions of Belarus in the EU countries (with the consent of the competent authorities of the EU);
- for the construction of infrastructure facilities up to 25 m related to energy supply and distribution for educational and medical institutions in Belarus.
It should also be noted that the Regulation retains general exceptions for the provision of "prohibited services", such as IT services, legal services, which also apply to construction services. Thus, the competent authorities of the Member States may also authorise the provision of construction services if they determine that it is necessary:
- exclusively for legal entities, organizations or structures registered in Belarus, which belong to or are under the full or joint control of residents of the EU, Switzerland, EU partner countries specified in Annex Vb to the Regulation;
- for humanitarian purposes, civil society, the functioning of diplomatic and consular offices, the provision of energy supply, the operation of critical infrastructure, the safe use of nuclear energy and the provision of electronic communications.
REVERA's comment
Starting from 24 February 2025, EU residents are prohibited from providing construction services directly or indirectly to the public sector of Belarus. At the same time, the EU has not provided a "transition period" for EU companies to complete previously concluded contracts, which is a common practice in the sanctions policy and in some cases is taken into account in the interests of EU companies themselves which services will be classified as construction and will keep you informed.
Given the limited effect of restrictions on the composition of subjects, we note that European companies can continue to provide construction services in favor of the private sector of Belarus, as well as in cases of exceptions specified above.
As for territorial restrictions, according to the general rule, the ban does not apply to non-EU residents, therefore, contractors/general contractors, for example, from Russia, Turkey, China can continue to carry out construction work for both the public and private sectors of Belarus.
It should also be noted that the EU has imposed a similar restriction on the provision of construction services in relation to Russia. At the same time, a significant difference between the restrictions imposed by the "Belarusian Regulation" and the EU sanctions policy against Russia in terms of the ban on the provision of construction services is who these restrictions apply to. Under the sanctions policy on Belarus, such restrictions apply to the public sector, while in Russia - to all companies and organisations, regardless of their legal form.
In accordance with the legislation of the Republic of Belarus, restrictive measures (sanctions) of third countries have no legal force on the territory of Belarus. The information can be useful in assessing the arguments of foreign partners about the presence/absence of restrictions on their side.
If you have any questions, REVERA Belarus lawyers will be able to advise you.
Authors: Fedarovich Aliaksei, Suschenya Sergey
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