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FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 6158
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RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
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RHEBAAA/DEPT OF ENERGY WASHINGTON DC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 000263 
 
SIPDIS 
 
DEPT FOR EUR/RUS, EEB/ESC/IEC GALLOGLY AND GREENSTEIN, 
S/EEE MORNINGSTAR 
DOE FOR HEGBURG, EKIMOFF 
DOC FOR JBROUGHER 
NSC FOR MMCFAUL 
 
E.O. 12958: DECL: 02/03/2019 
TAGS: BO ECON ENRG EPET PREL RS
SUBJECT: BELARUS EMBASSY: "WE WON OIL DISPUTE;" CUSTOMS 
UNION STANDARDS DEVELOPMENT IN PROCESS 
 
REF: A. MOSCOW 53 
     ¶B. MOSCOW 203 
 
Classified By: EconMinCouns Matthias J. Mitman, Reasons 1.4 (b,d) 
 
-------- 
"WE WON" 
-------- 
 
¶1. (C) During a meeting with us on February 3, Vladimir 
Stepuk and Olga Dolgopolova, First Secretary and Counsellor, 
respectively, of the Embassy of Belarus in Russia, claimed 
Belarus "won" the recent spat between Russia and Belarus over 
oil export duties (reftels A and B), although they downplayed 
its significance.  This contrasted with a February 2 
statement during a session of the Council of Ministers by 
Belarusian First Deputy Prime Minister Semashko, who claimed 
that terms of trade in oil and oil processing had changed for 
the worse for Belarus.  Semashko stated that the government 
of Belarus (GOB) had taken tactical measures to mitigate the 
adverse consequences of the changes in oil deliveries. 
However, Stepuk told us that, by their calculations, Belarus 
will see a net gain from the agreement signed by Semashko and 
Deputy Prime Minister Sechin.  According to Stepuk, while 
Russia will only provide 6.3 million tons duty-free in 2010, 
the two governments will re-examine and adjust that figure 
each year based on Belarusian consumption.  The agreement 
also allows, in principle, for additional duty-free oil to be 
supplied to Belarus if that oil is processed and the 
resulting products are re-exported to Russia.  Stepuk also 
contended that oil flows were not disrupted during the 
dispute and categorized the issue as a "temporary difficulty" 
that was part of the "normal negotiation process" between 
partners.  Dolgopolova then joked that the U.S. and Belarus 
are also going through a period of "temporary difficulties." 
 
--------------------------------------- 
CUSTOMS UNION PROCEDURES MOVING FORWARD 
--------------------------------------- 
 
¶2. (C) Stepuk and Dolgopolova stated that expert groups from 
the Russia-Belarus-Kazakhstan (RBK) Custom Union's executive 
body were developing systems for sharing tariff revenues and 
technical regulations, but they were unable to estimate a 
date for their entry into force.  The RBK Customs Union has a 
working group to develop a unified system of technical 
regulations for trade, including sanitary-phytosanitary 
standards, that will cover all three countries once it goes 
into effect.  Stepuk noted that in some cases the unified 
standards could be stricter than the existing standards of 
the individual members.  He offered the example of the dairy 
sector, in which GOR standards for the presence of 
antibiotics are stricter than GOB standards but still less so 
than European standards, implying that stricter international 
standards could be applied in some sectors. 
 
----------------- 
OFFER TO THE U.S. 
----------------- 
 
¶3. (C) Stepuk and Dolgopolova also communicated the GOB's 
desire to partner with the USG on a pipeline project and to 
see changes to sanctions on its state oil company.  They said 
the GOB would welcome USG participation in the construction 
of a new oil pipeline from Novopolotsk, Belarus to the Baltic 
sea port city of Klaipeda, Lithuania.  In addition, 
Dolgopolova conveyed her government's interest in a lifting 
of sanctions on Belneftekhim, the Belarusian state petroleum 
and chemicals concern, commenting that they raise this 
sanctions issue at every opportunity.  (Note: The Department 
of the Treasury's Office of Foreign Assets Control added 
Belneftekhim to its list of specially designated nationals in 
¶2007.  End Note.) 
 
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COMMENT 
------- 
 
¶4. (C) While acknowledging the strained relations between the 
U.S. and Belarus, our Belarusian counterparts were gracious 
 
MOSCOW 00000263  002 OF 002 
 
 
and friendly in the meeting.  Their surprising offer for USG 
participation in a pipeline project, while unrealistic, hints 
at the GOB's interest in trying to play Russia against the 
West in pursuit of its economic goals.  End Comment. 
 
¶5. (U) Minsk--minimize considered. 
Beyrle