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By Yeganeh Torbati
WASHINGTON (Reuters) - The Trump administration must decide by the end of this month whether to grant Belarus continued relief from U.S. economic sanctions despite a stiff government crackdown on street demonstrations last month.
The renewal decision is considered a low-level priority for the administration, which is facing bigger questions about U.S. relations with Russia and China, and with most major diplomatic positions still unfilled.
But whether the United States renews the sanctions relief or instead returns to blacklisting nine major Belarus companies is an early test for the Trump administration on the importance it puts on human rights versus efforts to coax countries in Russia's orbit to turn to the West.
The sanctions waivers, which began in 2015 and were extended twice last year, were tied to domestic political reforms and intended to encourage Belarus, which has long historical ties to Russia, to move closer to the European Union and the United States.
Now, however, U.S. officials are alarmed by the arrests of hundreds of people last month during an attempt to hold a street protest in the capital Minsk, and concerned if continuing sanctions relief could be seen as ignoring the crackdown.
Belarus authorities last month raided a human rights group's offices and used violence against peaceful protesters, rights groups say.
"This most recent crackdown sharpened people's focus," said a U.S. congressional aide, speaking on the condition of anonymity. "Now there is a real question about whether or not they (the sanctions) should be reimposed."
The decision must be taken by the end of April. If the administration makes no decision, the sanctions will be re-imposed.
NATO members, including Poland and the Baltic states, feel threatened by what they see as increased Russian intervention in Europe, including Moscow's annexation of Ukraine's Crimea region in 2014.
"Belarus is so important from a strategic point of view and it's so dependent economically on Russia that we are really very concerned," said Piotr Wilczek, the Polish ambassador to the United States. "Belarus is becoming more and more part of this wider Russian problem we have."
The Trump administration is inclined to renew the sanctions relief, but likely would wait until the last minute "to make sure they don't do anything awful," said a U.S. official, also speaking on condition of anonymity.
State and Treasury Department officials declined to comment in detail on the Belarus sanctions. The Belarus Ministry of Foreign Affairs declined to comment.
President George W. Bush in 2006 blacklisted top Belarus officials, including President Alexander Lukashenko, for undermining the country's democratic processes or human rights abuses. The United States later added large Belarus companies to the sanctions list.
But in 2015, Lukashenko released political prisoners and indicated he was open to better relations with the West. That October, President Barack Obama temporarily lifted sanctions on nine Belarus companies, including petrochemical conglomerate Belneftekhim and tire manufacturer Belshina.
Now, however, Lukashenko appears to be keeping his country firmly in Moscow's orbit. In a letter to him last week, four U.S. senators said they were concerned over the crackdown and that he decided to allow Russia to conduct "provocative" military exercises in Belarus later this year.
(Additional reporting by Arshad Mohammed and Patricia Zengerle in Washington and Andrei Makhovsky in Minsk; Editing by John Walcott and Alistair Bell)