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On Jan 31, 2022, the last trains carrying sanctioned Belarussian potash fertilizers were supposed to cross Lithuanian territory. 

They were supposed to stop much earlier. US imposed sanctions on its manufacturer, state-owned “Belaruskali” already in August, 2021, following the violent crackdown on people protesting rigged elections and kidnapping of passenger plane to arrest an opposition journalist and his girlfriend. One of the biggest transit flows via Lithuanian territory was supposed to stop in the beginning of December. But when the date came, nothing happened.

In a series of stories, Lithuanian investigative journalism center Siena and the Belarusian Investigative Center (BIC) for Belsat TV disclosed how the sanctions were circumvented and how the transit of Belarusian fertilizers transformed into a massive wealth and a tool of political influence in Lithuania.

While “Belaruskali” Lithuanian partners accumulate massive profits, their employees in Belarus are forced to work with heavily outdated machinery. The working conditions have led to multiple injuries and deaths.

The Day it Didn’t Stop

Some 11 million tons of “Belaruskali” fertilizers cross Lithuania on a yearly basis. Through the port of Klaipeda, one of the world’s leading suppliers of potash fertilizers distributes a large portion of its global exports.

Due to the Baltic port’s proximity and the investments of “Belaruskali” Lithuanian partners, the transit grew into a massive business and a significant part of Lithuania’s national railway company’s budget. It was an ecosystem bound for collapse after the European Union and US expanded their sanctions against the self-declared president Alexander Lukashenko’s regime.

“Belaruskali” train (Credit: Siena)

According to Lithuanian transport minister Marius Skuodis, the transit was supposed to stop on Dec 8, 2021, when US sanctions kicked in and banks stopped executing payments in US dollars for sanctioned entities. But the potash kept flowing apparently because of active measures taken by the Lithuanian side. Not only state-owned railway company “Lietuvos Geležinkelias”,  (LTG) continued potash transit because of multiply advance payments Belarussians had made to ensure it keeps going for months, but it also went actively looking for solutions in fintech sector: and kept mum about it.

Leaked emails obtained by Siena show that LTG reached out to multiple fintech companies with an offer to take over the processing of “Belaruskali” payments.

One of the companies – “Connectpay” – confirmed receiving the offer and rejecting it.

“We look at any service through the perspective of risk. If the risks are not acceptable, we do not get involved”, “Connectpay” director Marius Galdikas told Siena.

In turn, LTG claimed it wasn’t an attempt to bypass the sanction restrictions. “In order to define the possibilities of fulfilling the contract after December 8th, LTG addressed banks and other financial institutions on the subject of processing “Belaruskali” payments. The big banks said they wouldn’t process the payments”, LTG said in a written statement.

Siena also saw evidence that one of the fintech’s offered a precise model to process the payments after Dec 8. The email was forwarded to the transport minister who previously claimed having no knowledge of LTG’s actions. 

Marius Skuodis (Credit: Ministry of Transportation)

In an interview with Siena, Skuodis insisted he was not aware that the model might be used to bypass the banks’ refusal to process “Belaruskali” payments.

One for the Price of Three

As the nation-wide scandal evolved, Skuodis and the minister of foreign affairs Gabrielius Landsbergis handed in their resignations. Lithuanian Prime Minister Ingrida Šimonytė considered them for few days, and then refused to let them go.  “I value the ministers’ readiness to take responsibility, but I cannot accept that”, she said in a statement. 

The only one who paid with his post was  LTG’s CEO Mantas Bartuška. His decision to step down was widely seen as taking a role of scapegoat while the minister had no real intention to resign.

In the end,  Lithuanian government moved to halt the transit. Right before the Christmas break, a special government commission ruled that LTG’s contract with “Belaruskali” poses a threat to national security. Subsequently, LTG made a move to terminate the contract.

“Belaruskali” has threatened to sue Lithuania for breaching the contract. Lukashenko personally engaged in the matter. In a meeting with Belarusian PM, he claimed Belarus is ready to pursue a plan of retaliation, without specifying what it could be.

Working with Khrushchev’s Machinery

“Belaruskali” is one of the world‘s leading suppliers of potash fertilizers. However, one of the largest state-owned companies in Belarus fails to renew its heavily outdated equipment.

“The number of accidents has significantly increased over the recent years. First and foremost, it’s related to the deterioration of the equipment“, Uladzimir Tsimashenka, “Belaruskali” former employee told BIC. He added that some of the most important equipment was manufactured in 1964.

Dilapidated equipment often results in injuries or deaths. BIC’s research shows that over a hundred incidents involving the potash miners’ injuries were reported over the last decade. At least 18 people died.

One of the most recent incidents happened in March of 2020, when a special vehicle which transports the miners into the potash mines malfunctioned. The fatal accident resulted in one death and six injuries.

According to Tsimashenka, “Belaruskali” employees are often pressured to take blame for accidents, while the employer disregards the need to invest in buying new and safe machinery.

Meanwhile, an exclusive relationship with “Belkalij” facilitates a number of extremely profitable businesses in the neighboring EU member state, Lithuania. 

Fertilizing a Personal Estate

“Belaruskali” central partner in Lithuania is a company called “Birių Krovinių Terminalas” (BKT). Igor Udovickij, a Lithuanian businessman, is BKT’s principal shareholder. Since 2013, “Belaruskali” is Udovickij’s business partner with a 30 percent stake. BKT is not subject to US 

sanctions because they apply only to entities where “Belaruskali” owns half or more shares. 

In Lithuania, BKT has a monopoly over “Belaruskali” transit and annually makes a significant profit from it.  As per shareholder structure, “Belaruskali” is entitled to get almost a third of it. However, the fertilizer business feeds a number of companies where the Belarusian side has no interest. Some of those companies have been used to supply Udovickij and his nearest circle with a life of luxury.

Udovickij and his wife Olga Udovickaja own a large estate in the centre of port town Klaipeda. An impressive residence with a private botanical garden and what seems to be a replica of a Faberge egg on a pedestal was largely built by a company called “Pajūrio Kargas” that belonged to Udovickaja.

Company records show that “Pajūrio Kargas” started construction of villa in 2008. The work was funded by loans from Udovickaja and “Ferteksos Transportas” – a logistics company involved in the fertilizer business and owned by the Udovickij family. For nearly a decade, “Pajūrio Kargas” accumulated losses and therefore never paid any significant tax on profit.

The only year when the company reported substantial income was 2016, when Udovickaja bought the building from her company. According to company records, its annual income was some 700,000 euros, while the reported value of its real estate was over a million.

Udovickij residence (Credit: Martynas Vainorius /

Udovickij refused to give any comments over the phone when BIC contacted him. After sending a written request for comment, his wife accused the journalist of unlawful use of personal data. She also claimed that “Pajūrio Kargas” was liquidated, which supposedly means that the Lithuanian tax office had no issues with the company. That appeared to be not entirely true.

Lithuanian tax office confirmed to Siena that “Pajūrio Kargas” was inspected at least four times since 2008 and found ‘discrepancies’ were willingly rectified by the company. It did not specify what they were and how much tax might have been paid as a consequence.

Udovickij and his wife aren’t the only ones converting the fertilizer money into luxury. Thanks to it, BKT’s CEO Vidmantas Dambrauskas rose to become a member of Lithuania’s rich list and the country’s wealthiest elected official.

Rising to the Top

Dambrauskas owns two companies directly involved in the transit of “Belaruskali” fertilizers. One, “Fertimara”, is co-owned with “Belarusskaya Kalinaya Kompaniya” (“Belaruskali” official trader, owned by the state). The other one, “Ferticonta”, is fully owned by Dambrauskas.

Dambrauskas told Siena that the two companies do not compete with each other: “Ferticonta” works on forwarding and “Fertimara” is engaged in freight. Their net profits are impressive. Between 2013 – 2020 “Ferticonta” alone reported over 20 millions euros net profit, even if it does not even have a website and total sales are just slightly higher.

Lithuania’s magazine TOP, which annually publishes Lithuania’s rich list, estimates Dambrauskas’ net worth at 99 million euros, which makes him one of the 60 richest people in the country.

Dambrauskas is also an elected official. On the list of Farmers and Greens Union he successfully ran for a seat in the Klaipeda municipal council. According to official declarations of assets, Dambrauskas is the richest elected official in Lithuania.

Dambrauskas claims “Fertimara” and “Ferticonta” are exceptional businesses in the fertilizer industry. “These companies are the leaders in their market and provide exclusive services that nobody has thought of”, he said, adding that the nature of the companies’ operations is a trade secret.

Andrius Armonaitis, the leader of Lithuania’s Association of Shipping Agents and Forwarders, has a different explanation for the two companies’ success. Armonaitis claims the vast profits are thanks to the monopoly granted by the Belarusian side.

“It has been this way since 1998. If somebody wants to buy fertilizers, it can’t be done by anybody but their companies. Yes, they’re monopolists”, he told Siena.

A Bentley, a Boat and a Seaside Residence

The Curonian Spit is one of the most impressive landmarks in Lithuania. Situated between the Baltic sea and the Curonian lagoon, the narrow strip of dunes and forests is a UNESCO world heritage site and one of the most expensive places to own a property in Lithuania. And that’s where Dambrauskas’ fertilizer fortune can be found.

In Nida, the central resort town in the Curonian Spit, Dambrauskas owns a million-euro residence. It was acquired with “Ferticonta” money in 2016. 

Dambrauskas residence (Credit: Andrius Švitra / Siena)

In 2019, shortly after becoming an elected official, Dambrauskas bought the residence from his company. In a phone interview, he claimed “Ferticonta” had an office in Nida, and that’s what the residence was being used for.

In 2018, “Ferticonta” spent over a million euros on acquiring a ship. Dambrauskas confirmed it was a small pleasure craft called “Indigo”. He claimed it was a business investment that didn’t work out.

“It was bought for a particular purpose, but after the pandemic started, all contracts for its use expired. (…) So it was decided to sell it”, he told Siena.

Also, “Ferticonta” spent some 200,000 euros on a luxury Bentley Continental. Dambrauskas confirmed he’s using the car, but claimed that has no signs of using the company’s assets for personal gain – an action targeted by the Lithuanian tax office.

“So Dambrauskas is driving the company’s Bentley. That’s because he’s working from dusk till dawn. What car should I drive if I have a successful business? An Opel Astra? I think I behave fairly and honestly by providing my butt with normal conditions to drive in a luxury car”,  he told Siena.

Investing in Politics

Daiva Čibirienė, one of Lithuania’s leading tax experts, claims that some of the deals reported by Udovickij’s and Dambrauskas’ businesses should be of interest to the tax authority. However, the authority has a limited timespan it can legally investigate.  Nerijus Maliukevičius, a political scientist based in Vilnius, says this is not only about profit and tax.

Nerijus Maliukevicius (credit: Siena)

In 2019, Dambrauskas ran for a municipal seat with the party that was, at the time, the dominant power in the Lithuanian politics. The party’s candidate for the mayor’s seat was Arvydas Vaitkus, head of the port of Klaipėda.

Leonidas Bergeris, Dambrauskas’ partner at “Fertimara”, also ran for a seat with same party. Lithuania’s public broadcaster revealed that the Farmers and Greens’ electoral campaign was funded with hefty donations from Udovickij, Dambrauskas and Bergeris. After the story became public, Vaitkus was fired from the port due to conflict of interest.

In Maliukevičius’ opinion, it resembles the modus operandi previously used by businessmen tied to the Russian energy sector, who moved to become elected politicians and founded populist parties.

“It must be monitored how people involved in business relationships with authoritarian regimes move to a wider context, socially and politically”, Maliukevičius said.

Looking elsewhere

With US sanctions kicking in and Lithuanian route closing, Belarus started to look for alternatives elsewhere. Last October, the deputy transport minister, CEOs of “Belkalij” and “Beltamozhservis”, and head of of Agency of External Economic Cooperation came to Latvian port of Ventspils at the invitation of “Kālija parks” – enterprise which lost the Belarusian cargo a long ago, Re:Baltica has learned.

Since the visit happened during heightened Covid-19 restrictions, “Kālija parks” had asked Latvian Investment and Development Agency (LIAA) to allow Belarusian delegation to enter under the clause, which permitted visits to finish a ongoing cooperation projects, head of LIAA Kaspars Rožkalns who had refused the invitation to meet with Belarus delegation told Re:Baltica. 

It is not clear what those projects are as the enterprise refused to answer any questions about the visit. The head of Baltic Association of Transport and Logistics, Ivars Landmanis, told Re:Baltica that the delegation met with several enterprises and representatives of Ventspils freeport to discuss potential transit, including fertilizers, but no agreements were signed and no visits had taken place since then.

“It is a very complicated situation because entrepreneurs are trying to save the work for their people, ensuring they get an income and social guarantees. As fertilizers are a very important product for agriculture, the transit will continue anyway,” he said. “If the cargo will not go through Lithuania or Latvia, they will find another route. In this situation one can say sanctions are not targeted only against Belarus, but have an impact also on Latvian economy and our citizens.” 

Sanita Jemberga (Re:Baltica) contributed to this report

This investigation was supported by a grant from the Investigative Journalism for Europe (IJ4EU) fund and produced by Re:Baltica.


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