The Royal Bank of Scotland has announced that it will no longer engage in “any type of capital-raising” on behalf of the government of Belarus after an Index on Censorship and Free Belarus Now campaign.
After senior RBS executives met with Index on Censorship and Free Belarus representatives in Edinburgh last week, the bank has made a public statement declaring that it will no longer sell Belarusian government bonds:
“Given sanctions, the deteriorating political situation in Belarus and the fact that it has reneged on key elements of the IMF programme, RBS has ceased any type of capital-raising for or on behalf of the Belarus Republic and we have no plans to change that position until these issues have been resolved. In assessing where we do business, we have a responsibility to consider a number of factors, including social and ethical issues and compliance with the letter and spirit of all international sanctions.
Mike Harris, Head of Advocacy at Index on Censorship, who attended the tense meeting with RBS along with Free Belarus Now representative’s Natalia Koliada and Professor Alan Flowers, welcomed the decision:
We’re delighted that RBS has heeded our calls to stop acting as a broker for authoritarian President Lukashenko. This couldn’t come at a more crucial time. The government of Belarus needs nearly $1bn a month in foreign capital. RBS has sent a clear signal not to risk investing in an regime that violates fundamental human rights and may not last.
RBS were involved in a syndicate alongside Sberbank (Russia), BNP Paribas (France) and Deutsche Bank (Germany) that sold $1bn Belarusian government bonds at 8.75 per cent (due August 2015) in August 2010, followed by a further issue of $850m of bonds in January 2011 (due January 2016) at a higher rate of 8.95 per cent.
Experts calculated these interest rates were twice the rate that would have been levied by the IMF, but the IMF would have required structural reforms. The IMF will make a decision on whether it will lend Belarus additional funds today (29 August). Governments including the British government oppose such a move until political and economic reforms are undertaken by the Republic of Belarus.
Index on Censorship and Free Belarus Now were particularly concerned that even after the oppressive post-election crackdown in which seven of the nine presidential candidates were arrested and 43 political prisoners were held, the bond sale by RBS continued.
Natalia Koliada of Free Belarus Now said:
When British businesses such as Grayling PR invest in Belarus, or RBS sell their government’s bonds, it helps support an authoritarian regime. In Belarus the KGB is to this day, torturing and kidnapping people. Before companies invest in the failing economy, all political prisoners including close friends of mine, must be released. I’m pleased by the news from RBS but we must convince the IMF not to bail out Lukashenko and prop up the dictatorship.
Index on Censorship was the first NGO to report allegations of torture in Belarus on 20 December last year.
The campaign by Index on Censorship and Free Belarus Now is continuing with pressure being put on the three remaining banks involved in the bond sale.
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