Belarusian steel plant trades with UAE and Turkey bypassing sanctions

In March 2022, the EU imposed restrictions on metal imports from Belarus. Since August 3, 2023, the OJSC Belarusian Steel Works (BMZ) has been separately included in the EU sanctions list. However, BMZ continues to trade with Europe. Euroradio managed to get access to the contracts confirming this, as well as to talk to a market participant who offered assistance in supplying BMZ with goods to bypass sanctions. 

"Steel Pillar of Belarus" 

The Belarusian steel plant in Zhlobin was built on a turnkey basis in Soviet times by two European companies - Italy's Danieli and Austria's Voestalpine. The first steel melt was produced here in October 1984, and the industrial operation of the plant began in 1985. At present, BMZ operates as an open joint-stock company "BMZ - Managing Company of BMK Holding". The enterprise produces both high-strength steel and finished products - rolled metal products, pipes, wires, steel fibers and others.

For most of its 40-year existence, the plant has maintained ties with European industrial giants. In 2010, Danieli and BMZ signed a memorandum on the construction of a new plate rolling complex. And in 2015, the Danieli-supplied plate rolling mill was inaugurated with the participation of Aliaksandr Lukashenka.

The European Union was also the main buyer of BMZ products, which have always been export-oriented. About 80% of production went abroad. At the same time, EU countries accounted for more than 45% of exports (according to 2020 data). 

Iron embargo

New realities for both BMZ and the entire steel industry in Belarus came after Russia's full-scale invasion of Ukraine in 2022. "Due to the situation in Belarus and Belarus' participation in the Russian aggression against Ukraine," in March 2022, the European Union imposed sanctions on Belarus. 

According to the journalists' source, a participant of the metal export market, Philipp Koudsie is connected with the company WSteel DMCC. A person with this name and registration in Odesa (Ukraine) is listed in the Panama Papers as a shareholder of a company with a similar name, but registered in the British Virgin Islands - WSteel Ltd. WSteel Ltd is also involved in metal transactions. In 2019, this company purchased steel billets from the Ukrainian company Elektrostal-Kurakhove LLP.

Journalists managed to speak with Philippe Kudsie. During the conversation, Philippe confirmed that he is related to both WSteel Ltd and WSteel DMCC. Answering questions about cooperation with BMZ, he assured: "Don't worry, everything is done according to international laws and OFAC rules (OFAC - the Foreign Asset Control Division of the US Treasury Department - Euroradio)."

Turkish-Ukrainian partner: "Let's sell!"

Another partner of the Belarusian Steel Works that appears in the documents is the Turkish company KB Global Dış Ticaret Ve Makina Sanayi Limited Şirketi. This is a supplier of products to BMZ. According to the documents obtained by the journalists, the value of the supplies was 24.4 thousand dollars.

The journalists noticed that one of the contracts has a Ukrainian phone number among the contacts. The owner of the phone number was identified as Ukrainian citizen Oleksandr Bienko. 

Bienko confirmed that he works for KB Global and is involved in transactions with the Belarusian Steel Works. In addition, Bienko agreed to help sell European equipment (hoists) to BMZ through the intermediary of KB Global (so that the European company would not have a contract directly with BMZ, as it is subject to EU restrictions).

Bienko: Do you want to sell your hoists or not?
Euroradio: Yes.
Bienko: Let's sell.
Euroradio: How will this process be organized?

Oleksandr Bienko offered to call each other in a messenger. After asking about the terms of cooperation ("Who gave you the phone in the factory?", "Do you have only hoists or something else?", "Do you want to give us some kind of bonus for this whole business?"). Bienko promised to return to the conversation after a meeting with management. At the time of publication of this material, Bienko has not responded. 

Old acquaintances from Europe

According to the leaked documents, European companies also do business with the Belarusian Steel Works. The journalists have contracts with Milca Baltija and Eurologistikos baze. Both companies are registered in Lithuania.

Milca Baltija has already come to the attention of investigative journalists. In September 2023, BIC published a story that this Lithuanian company is helping Hrodna Azot to bypass sanctions: it transports fertilizers to Europe under the guise of Uzbek fertilizers.

The company itself does not hide in LinkedIn that its main activity is trade in the steel market.

According to the documents, Milca Baltija and Eurologistikos baze are connected, as CJSC Milca Baltija paid BMZ for three orders from UAB Eurologistikos baze totaling about 200 thousand euros. The country of destination of the goods purchased by Milca Baltija is Turkey.

The contract between BMZ and JSC Milca Baltija is valid until May 31, 2022. This is already after the sanctions started to work on March 2, 2022.  

The contract with Eurologistikos baze was amended on March 2, 2023. That is, already one year after the beginning of sanctions.
 

Such actions of Lithuanian companies can be considered a violation of EU sanctions, which are specified in Article 1q of Council Regulation (EU) 2022/355 of March 2, 2022. They prohibit the direct or indirect purchase and transportation of iron and steel and products made from them if these goods are located or produced in Belarus.

Euroradio wrote to Milca Baltija and Eurologistikos baze asking them to explain why they continued to sign contracts with BMZ after the ban on trade in Belarusian metal came into force. At the time of publication, we have not received a response.

The story was prepared with the support of Belarus Beehive under the mentorship of Maksim Sauchuk. Together with the Belarus Beehive Investigators Alliance and Flagshtok (Homiel).

Investigations are an important but time-consuming part of journalistic work. To help us conduct them, please support Euroradio on Patreon.