August 30, 2013 / 7:10 AM / in 4 years

UPDATE 1-Russia steps up trade war with Belarus after CEO's arrest

MOSCOW, Aug 30 (Reuters) - Russia banned imports of hogs and pork products from Belarus on Friday, stepping up a diplomatic and trade dispute over the arrest of a Russian businessman by Moscow’s former Soviet ally.

Russia’s veterinary regulator, Rosselkhoznadzor, said the restrictions were imposed over concerns about African swine fever in Belarus and would remain in place until the disease was wiped out or brought under control.

But the timing of the announcement signalled Moscow was increasing pressure on Belarus over the arrest this week of Vladislav Baumgertner, the chief executive of Russian potash company Uralkali, in the capital Minsk.

Baumgertner was invited to Belarus for talks after the collapse of a Russia-Belarus sales cartel that controlled two-fifths of the $20-billion global market for potash, an ingredient used in mineral fertilisers.

He was arrested at the airport.

Russia has demanded Baumgertner’s release and ordered its oil companies to cut supplies by about 25 percent to Belarus, a country of almost 10 million which is a transit country for Russian oil and natural gas to Germany and Poland.

Russian pipeline monopoly Transneft has said Russia will cut oil supplies to Belarus by 400,000 tonnes in September, and Moscow has signalled it will increase scrutiny of Belarussian dairy products.

Russia imported 15,638 live pigs in the first three months of this year for $3 million, official data showed.

Russia denies the actions are connected with Baumgertner’s arrest but it is unlikely that the timing is coincidental and relations between the two countries, who are members of a customs and trade union, are deteriorating rapidly.

Belarus, which has been led by authoritarian President Alexander Lukashenko since 1994, says Baumgertner is suspected of abusing his position and official powers. It has also threatened to open a criminal case against Suleiman Kerimov, a Russian tycoon with Kremlin ties who is the top shareholder in Uralkali.

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