GOB EXPLORES TARGETS FOR THREATS TO U.S. BUSINESS

C O N F I D E N T I A L MINSK 000650 SIPDIS SIPDIS E.O. 12958: DECL: 07/25/2017 TAGS: ECON PGOV PREL BO SUBJECT: GOB EXPLORES TARGETS FOR THREATS TO U.S. BUSINESS REF: A. MINSK 578 ¶B. MINSK 642 ¶C. MINSK 296 Classified By: Ambassador Karen Stewart for reason 1.4 (b/ d). Summary -------------- ¶1. (C) Belarusian authorities have begun preliminary investigation into options for carry through on threats made by Lukashenko to retaliate against U.S. businesses if the USG strengthens its sanction regime. Officials claiming to represent the tax authorities asked Coca-Cola and McDonald's to describe the level of American investment and employment in their local operations. Additionally, an MFA representative mentioned possible retaliation during the delivery of a demarche. End summary. Coca-Cola and McDonald's Visited to Determine American-ness -------------- -------------- ¶2. (C) On July 23, Coca-cola representative Aleksandr Yaroshevich (protect) told Ambassador authorities had visited his office and asked for information on U.S. involvement in the company. (Note: The Greek Hellenic Bottlers owns the Coca-cola bottling plant in Minsk. The MINSK representative office, in charge of marketing, is registered a Dutch concern. Neither employs any U.S. citizens. End note.) He concluded the visit was a result of threats from Lukashenko to American business made in early July (ref A). On July 24, Yaroshevich told Acting Pol/Econ Chief that the GOB official claimed he represented tax authorities. The questionnaire presented asked the company to list American employees and ownership, and whether profits were repatriated to the United States. ¶3. (C) Yaroshevich said neither he nor the Moscow office to which he reports were yet worried about the visit. He noted Coca-Cola operated in over 100 countries and the MINSK operation was too small for the GOB to think it had serious leverage. Coca-Cola would continue preparing a study to document secondary employment generated by its presence in Belarus, a project the company began early in hopes of convincing the GOB to allow it to expand. Yaroshevich spoke with a local McDonald's representative, who said they had been paid a visit as well. (Note: McDonald's does not employ any U.S. citizens in Belarus, but is registered in the United States. End note.) MFA Also Asks About Coca-Cola -------------- ¶4. (C) The MFA is at least aware of attempts to pin down which local companies can be classified in one way or another as American. While delivering a demarche on July 20 (ref B), Oleg Anisimov, Counselor in the MFA's North American Department, mentioned Belarus' intent to respond with sanctions of its own should the USG move forward. Noting the presence of Coca-Cola products at the Embassy's Independence Day reception, he inquired whether the bottler in MINSK was legally American. Comment: Doubling the Effectiveness of Sanctions? -------------- -------------- ¶5. (C) The threats run counter to the GOB's claims that it wants increased foreign investment (ref C). Any significant move against McDonald's or Coca-Cola by the GOB would generate much more negative buzz in the international business community than any measure the USG would likely take to punish continued political repression in Belarus. The GOB apparently hopes the threats will head off the move to expand sanctions. Smaller U.S. investors in Belarus, some more identifiable as "American" than others, certainly have much to lose if the GOB singles them out. In the meantime, post will make any potential U.S. investors aware of the threat. Stewart