EU calls on China to lift sanctions against Lithuanian banks

• The EU calls on China to lift sanctions on Lithuanian banks.
• The sanctions should have a symbolic character and not affect the Lithuanian economy.
• Reciprocal sanctions reflect the registered relations between the EU and China.

LITHUANIA (AP) — The European Union on Thursday called on China to lift sanctions imposed on two Lithuanian banks, stating that there are no grounds for this.

China announced these measures at the beginning of the week in response to EU sanctions against two Chinese credit institutions.

Lithuanian banks do not conduct business in China, making these measures predominantly symbolic. However, these reciprocal sanctions underline the registered relations between the EU and China through Beijing's support for Russia in the war against Ukraine.

At a briefing in Brussels, European Commission representative Olaf Gyll stated that sanctions against Chinese banks are in place. He noted that China has been urged to address the problems we identified. "Our sanctions are a central element of our efforts to minimize the effectiveness of the Russian military machine," Gyll said.

He also added that the Commission does not believe that Chinese counterparts should have any justification or be based on evidence, thus China is called to lift them.

The latest EU sanctions package, adopted in early September, includes sanctions against Heihe Rural Commercial Bank and Heilongjiang Suifenhe Rural Commercial Bank. The block accused them of providing services to cryptocurrencies, which help Moscow circumvent restrictions.

In its statement regarding its sanctions against Lithuanian banks, the Ministry of Foreign Affairs of China noted that EU sanctions on Chinese companies had a "serious negative impact on economic and trade relations between China and the EU."

Lithuanian banks and the government stated that the sanctions were not expected, but, likely, they will have an unspecified practical impact. "According to previous assessments, this decision does not have a significant impact on the financial system of the region or the operations of the banks themselves, as the business model of the mentioned banks is focused on the local market," the Bank of Lithuania stated.

Marijus Arlauskas, head of the administration of Urbo Bank, noted: "Since we do not have business partnerships with Chinese physical or legal entities, the sanctions will not affect the operations of Urbo Bank and the implementation of safety rules."

The Lithuanian state has long been provoking China’s anger. In 2021, Beijing expelled Lithuania's ambassador in response to Lithuania's decision to open an office to connect with Taiwan in Vilnius, the capital of Lithuania. China considers Taiwan a breakaway province and forbids other countries from having formal relations with Taiwan.

Taiwan has long been seeking closer ties with the Baltic countries, citing their experience under authoritarian rule and embracing multi-party democracy and liberal values.

In 2024, Lithuania expelled Chinese diplomats after China’s court summoned them during the investigation into the severing of two undersea cables, one of which passes under the Baltic Sea between Lithuania and Sweden.

Tags: China/Europe/Politics