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. Last Updated: 07/27/2016

McDonald's Sues Belarus University

MINSK, Belarus -- U.S. fast food giant McDonald's said Tuesday it would sue Belarus' state university over plans for a new university building near one of its restaurants in Minsk that prevent customers from entering.

Olga Troyan, a spokeswoman for McDonald's in Belarus, said the company was seeking damages from the university.

"We have a lease agreement with Minsk's municipal council. The lease expires in 2036. We are paying a land tax. That is why we believe such action not only violates our property rights but also violates the law," Troyan said.

McDonald's, which has opened six restaurants in Minsk since 1996, investing some $14 million, is one of the biggest foreign investors in the former Soviet state, where the economy is still largely run along command lines.

Alexander Kozulin, rector of the university, told reporters McDonald's had broken a verbal agreement with the university and said the university had offered the company other buildings in Minsk.

McDonald's representatives denied the claim.

Construction work near the McDonald's restaurant has been suspended for now. However, a fence erected by university builders around the McDonald's restaurant is still in place and visitors have to walk up to 100 meters to enter.

Belarus is regarded as one of the most difficult former Soviet states in which to do business. Foreign investment only amounts to about $30 per capita.