Oct. 31, but suspending their application for a year, said sources familiar with the debate within the bloc.

However, some diplomats prefer to wait until after Belarus' elections on Oct. 11, which Lukashenko, in power for 21 years, is expected to win.

Lukashenko's pardoning of six jailed opposition figures in August and his hosting of peace talks for Ukraine in February have cemented a perception among EU officials that Belarus, Russia's closest ally, is opening up to Europe.

"We want to respond directly to those who made this prisoner release possible. The release of the political prisoners was one of our key demands," said one person involved in the debate, who declined to be named due to the sensitivity of the matter.

FINANCE FLOWS

The beneficiaries could include Lukashenko, who is no. 124on the EU's list, and judges and other politicians close to the president. Discussions have taken place among diplomats and also among EU foreign ministers at a recent meeting in Luxembourg.

Plans also include lifting restrictions on some of the 25 Belarussian companies currently targeted, making them eligible for financing from the European Investment Bank. Ending other curbs that block Belarus from European capital markets, export credit insurance or EU technical assistance could also be considered.

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"This would mean Russia is no longer the only source of financing for Belarus," a second person said.

However, one company, military equipment exporter Beltechexport, is likely to remain under sanctions.

The office of EU foreign policy chief Federica Mogherini declined to comment, although Mogherini welcomed the prisoner release on Aug. 22.

Lukashenko, shaken by the