When the European Union set out to punish those profiting from the authoritarian regime of Belarusian President Aleksandr Lukashenko, it wanted to send a clear message: collaboration with repression would not go unpunished. Yet, a clerical error buried deep in the EU’s sanctions list had the opposite effect – enabling one of Lukashenko’s most influential business allies, Serbia’s powerful Kari? family, to continue earning millions from lucrative real estate ventures in Belarus while Brussels sanctioned the wrong company.

The mistake, uncovered through a new investigation by the Belarusian Investigative Center (BIC) in cooperation with OCCRP and its Serbian partner KRIK, reveals how bureaucratic negligence can undermine an entire sanctions regime – and expose the fragility of Europe’s financial enforcement mechanisms.

The Kari? family, one of Serbia’s wealthiest dynasties, has long been known for its ability to intertwine business interests with political connections. In Belarus, their influence took shape through Dana Holdings and Dana Astra – companies that won vast real estate and construction contracts, including developments in Minsk reportedly worth more than $1 billion.

At the center of these deals was a close personal relationship between Bogoljub Kari? and President Lukashenko. The partnership proved profitable for both sides: Lukashenko’s regime received massive urban renewal projects to showcase Belarus’s modern image, while the Kari? family gained a lucrative foothold in a state-controlled economy largely isolated from Western investors.

But by 2020, as Lukashenko’s government faced mounting international condemnation for its violent crackdown on protests following the disputed presidential election, the European Union moved to sanction those who “benefitted from and supported” his regime. Among the targets: Dana Holdings.

When EU officials drafted the December 2020 sanctions package, they sought to blacklist Dana Holdings for its financial links to Lukashenko’s projects. The Cyprus-based firm was accused of serving as a financial vehicle for funneling profits from Belarusian construction projects back to the Kari? family.

But there was a fatal error. Instead of correctly listing the registration number of Dana Holdings Limited – the Cypriot entity that controlled the family’s business network – the EU sanctions list mistakenly included the registration number of Dana Astra, a subsidiary registered in Belarus.

That single mistake gave the Kari? family the space they needed to maneuver. Within weeks, Belarusian business registries showed the creation of a decoy firm – also named Dana Holdings – registered in Belarus but entirely distinct from the Cyprus-based parent company that managed the family’s international finances.

The decoy worked exactly as intended. By the time the EU realized its mistake and attempted to correct the listing in March 2022, the bloc once again used the wrong registration number – inadvertently referring to the newly created Belarus-based “Dana Holdings,” not the Cypriot original.

Even after the inconsistencies were brought to light, the European Union maintained that its sanctions applied to both entities. “Our position is that both companies remain listed since December 2020,” said Anitta Hipper, spokesperson for EU foreign affairs and security policy.

However, the Belarusian Investigative Center disagreed. The organization found that the actual Dana Holdings Limited – the Cypriot parent firm that oversaw the family’s Belarusian projects and received millions in dividends – was never legally restricted by the EU’s sanctions regime.

In effect, the EU had blacklisted a ghost.

Between 2013 and 2020, financial statements filed by Dana Holdings Limited in Cyprus show that the firm received roughly 128 million euros (about $143 million) in dividends. Those profits, derived largely from Belarusian construction projects, were distributed among the Kari? family’s network of companies before the EU sanctions took effect.

By the time Brussels officially listed Dana Holdings in December 2020, the family had already begun moving key assets abroad. Two weeks before the EU sanctions were enacted, five Cypriot subsidiaries of Dana Holdings Limited were transferred to a firm in the United Arab Emirates  effectively placing them beyond the reach of European regulators.

The US Treasury, which later sanctioned Dana Holdings in August 2021, arrived too late to recover those assets. By then, the Kari? family’s Belarusian business empire had been largely insulated through offshore transfers, leaving Brussels to sanction an empty corporate shell.

The Dana Holdings case illustrates a deeper problem: the EU’s sanctions mechanism, while ambitious in scope, is often undermined by administrative oversights and a lack of centralized verification.

Unlike the US Office of Foreign Assets Control (OFAC), which maintains a unified and highly detailed database of sanctioned entities, the EU’s process is more fragmented, involving multiple national bodies with varying levels of due diligence. As a result, even minor technical errors – such as an incorrect registration number – can render sanctions unenforceable.

For authoritarian regimes and their allies, such loopholes are opportunities. By exploiting bureaucratic inconsistencies and cross-border jurisdictional gaps, oligarchs and politically connected families can continue operating freely, even under formal sanctions.

The EU’s attempt to save face – by insisting that its measures “covered both entities” – does little to change the fact that the real Dana Holdings continued doing business until it was voluntarily dissolved, long after it had secured millions in profits and relocated its wealth offshore.

The failed sanctioning of Dana Holdings is not merely a clerical embarrassment; it is a cautionary tale about how fragile the EU’s economic warfare tools can be when not paired with rigorous legal precision and coordination.

Sanctions are meant to isolate authoritarian regimes economically, making collaboration costly for business elites. But in this case, a simple bureaucratic misstep allowed a Serbian family deeply intertwined with Lukashenko’s regime to avoid meaningful penalties, continue cashing in, and quietly dismantle the core of their operations in Belarus.

In the long run, the implications extend beyond the Kari? family. For Europe, it highlights the urgent need to overhaul its sanctions infrastructure – ensuring that listings are legally airtight, data is centralized, and compliance is verified across borders.

Without that, future sanctions may once again punish shadows while the real profiteers slip away – safely ensconced behind offshore paperwork and the EU’s own administrative blind spots.

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Source: Weekly Blitz :: Writings