The UK’s Financial Conduct Authority (FCA) has been urged to investigate the listing of Belarusian sovereign bonds on the London Stock Exchange, openDemocracy reports today.

In a letter written by the Belarusian Coordination Council and seen by openDemocracy, the opposition movement called on the FCA to investigate the banks that underwrote the listing of $1.25bn in Belarusian government bonds in London in 2020. The transaction was underwritten by Citi, Raiffeisen, Société Générale and Renaissance Capital, and the FCA is the regulator for the London Stock Exchange.

The letter is the latest episode in a tide of criticism over the UK’s financial links to Belarus. British MPs called on Boris Johnson’s government to investigate London’s role in financing autocratic regimes after Belarusian authorities forced a Ryanair passenger jet carrying a dissident to land in Minsk in May.

“These most recent revelations of Belarus floating Eurobonds on the London market are shocking and demand a response from the FCA and the Treasury,” Labour MP Tony Lloyd told openDemocracy. “The UK should not be the backdoor to weapon sales and it should not be the backdoor to propping up the Lukashenko regime.”

The letter, dated 9 June, cited concerns that while the bonds were meant to refinance Belarus’s external debt, the bond proceeds were, in effect, financing the regime of Alexander Lukashenko – and could have been used to support the president’s lifestyle and “purchase gear and weaponry for the Ministry of the Interior”. As openDemocracy previously reported, there is little oversight or control on the final use of funds raised through sovereign debt.

The Coordination Council is running a divestment campaign against the investment banks that hold Belarus’s sovereign debt, and claims that the bond prospectus failed to mention repression against independent presidential candidates prior to the election. While the bonds were listed on 25 June 2020, the council’s letter notes, two Belarusian independent presidential candidates – popular blogger Siarhei Tsikhanouski and banker Viktar Babarika – had already been arrested, and police had brutally dispersed protesters who supported independent candidates.

“No events of such magnitude occurred during previous election cycles,” the letter states. “Comparing the patterns with the previous elections, it should have been apparent at the time that, as a consequence, new economic sanctions will be levied against the issuer.”

The FCA did not respond to a request for comment.

As part of a drive to attract international capital, in June 2020, the Belarusian Finance Ministry listed two sovereign eurobonds on the London Stock Exchange, signalling an apparent commitment to long-term financing in the west.

“It is doubly honourable that [our] securities have been listed on the world’s leading stock exchange platform,” said Belarusian finance minister Yuri Seliverstau at the time. “We hope that cooperation between our country and the London Stock Exchange will be continued.”

The City of London hosted a series of investor promotion events for Belarus in the run-up to the prestigious listing. During a visit to London in June 2019, the now former Belarusian prime minister, Siarhei Rumas, was hosted by both the Lord Mayor of the City of London, Peter Estlin, and at a ‘Belarusian Capital Markets Day’ at the London Stock Exchange. It was there Rumas met the exchange’s chief executive, Nikhil Rathi, now chief executive of the FCA, and Alan Duncan, former UK Foreign Office’s minister of state for Europe and the Americas.

“London is the place where Belarus can raise the capital it needs to grow its economy,” Duncan said at the event. “Our governments are ready to continue cooperation, our companies will also interact. We believe that London Stock Exchange will facilitate your economic endeavors.”

The UK’s financial ties to Belarus have come into focus since Belarusian police violently suppressed post-election protests in the country last year and authorities forced a Ryanair passenger jet carrying a dissident to land in Minsk in May 2021. In reaction, the European Union has sanctioned future bond issuances by Belarus, and the perception of Belarus’ “ESG risk” – risks associated with environmental, social and governance factors – has reportedly deteriorated.

Under increasing pressure to make ethical investments, investment banks are having to make choices over which sovereign bonds to trade – though as the Financial Times reports, there is an opinion that this is unfair to an industry ultimately devoted to financial returns.

There are currently believed to be more than 500 political prisoners in Belarus, according to the Viasna human rights association.

On 6 July, Viktar Babarika, a former presidential candidate and top manager of Belgazprombank, was sentenced to 14 years in prison on bribery and money-laundering charges that are widely seen as politically motivated.

Independent journalists, politicians and activists have all faced pressure for their work, and many have been forced to leave the country in fear of prosecution. Over the past ten days, Belarusian law enforcement has raided a number of regional media outlets, conducting 30 searches against journalists and media offices.

“The actions of the Belarus regime in recent months have been both horrendous and challenging,” said Tony Lloyd MP, who noted that there were “credible allegations” that Belarusian political prisoners had been tortured by the regime.

Governments, Lloyd continued, have “struggled to coordinate sanction policies that make a difference” to the Belarusian regime, but stated:

“There is a special responsibility on the UK government because of the role that London money markets play in allowing Belarus to slide through the impact of sanction regimes.”

The UK has placed its own sanctions on the Belarusian leadership over human rights abuses and election falsification. In response to the Ryanair incident, it also sanctioned a Belarusian-UK company that imports Belarusian oil products – in 2019, Belarus exported $2.1bn worth of refined petroleum to the UK, the third largest market for Belarusian goods.

But with few short-term levers of pressure on a regime that is currently attempting to eradicate all independent civic life in Belarus, the focus on the UK’s financial ties to the country will continue.