Lithuanian Railways resumed transportation of goods between mainland Russia and Kaliningrad last month, following a conflict between the EU and Moscow. Now, Lithuanian banks plan to stop processing all payments from Russia, the same applies to Kaliningrad transit payments, leading to fears of another crisis, reports Lithuanian National Broadcaster LRT.
Šiaulių Bankas currently remains the only financial institution through which Russia can pay Lithuanian Railways for transporting goods to and from Kaliningrad. However, the bank recently announced it would stop processing these payments as of September.
Last week, the Russian envoy Sergei Ryabkov delivered a note to Lithuania’s Foreign Ministry about it.
Sergei Ryabkov told the Russian media that he personally handed over a note on Šiaulių Bankas asking to clarify the reasoning until September 1st.
Lithuania has already solved the Kaliningrad transit issue and have removed all tensions, then why a second blow is being prepared to cargo transit, he expressed his puzzlement.
The Foreign Ministry initially said little about the issue, but on Tuesday, Foreign Minister Gabrielius Landsbergis commented further.
The minister said that they have received the note, read it and forwarded it to the colleagues in the Ministry of Transport and Communications and added that sanctions in the field of transport to any extent are the responsibility of the Ministry of Transport and Communication.
He considers that Ryabkov raising the issue in the media was another attempt by Moscow to escalate tensions over the Kaliningrad transit.
Diplomatic notes are delivered frequently and not all notes are discussed in the media, thus he considers that there is an opportunity to create an impression of pressure by using journalists to put pressure on the government, said Landsbergis.
Transport Minister Marius Skuodis commented that the issue is between Russia and private banks. «The state cannot force banks in any way, it will depend on their own decisions,» the minister told LRT RADIO on Wednesday, August 3rd.
«Since the the FNTT (Financial Crime Investigation Service) is responsible for the implementation of financial sanctions, their say is crucial. The position of the Ministry of Transport and Communications and the Ministry of Foreign Affairs and other ministries is important, but the FNTT is in control,» he told reporters in Vilnius.
He added, however, that the ministry believes the payments should be allowed. Skuodis also called the existing situation confusing due to the constantly changing implementation of the sanctions.
The minister indicated that he cannot guarantee that something is not going to get stuck at any time because the sanctions are ever-changing, and the ownership of legal entities and beneficiaries change. If the EU does not change the sanctions, it doesn’t mean ther won’t be any other jurisdictions that may change them. The situation will be confusing, and it needs to be admited.
However, not everyone is so unconcerned. Opposition parties say this is potentially yet another looming foreign policy crisis this government is walking into.
«This is the second time we have stepped on the same rake, where first we leave it to the companies to decide, to Lithuanian Railways or individual banks, and then we have to change these decisions,» said Juozas Olekas, former defence minister and currently a social democratic member of the European Parliament.
While banks say they are stopping transactions with Russia in order to comply with EU sanctions, exceptions can be made when payments are made to ensure state functions.
Šiaulių Bankas said in a comment that they are currently cooperating with the relevant authorities to clarify if they can classify the transit service as a state function, and then will consider the possibility of granting an exemption for this service in accordance with the risks acceptable to the bank.
The ruling conservatives insist, however, that this is Russia’s problem, not Lithuania’s.
«The Lithuanian government can forbid banks to do something, but it cannot tell them what to do,» said conservative MEP Andrius Kubilius, a former prime minister.
He suggests Russia to look for other banks in the West. If Lithuanian banks see a risk in this, perhaps other banks in other countries maight not see it, Kubilius added.
However, according to Olekas, Moscow is not sending diplomatic notes to commercial banks, it is sending them to the Lithuanian government, which must have a plan how to deal with it, rather than brushing it aside.
«If the banks have taken one decision now, and after a while another decisions will be taken, then it will be bad,» said Olekas.
Full article read: https://www.lrt.lt/en/news-in-english/19/1751233/fears-of-another-kaliningrad-transit-crisis-as-lithuanian-banks-halt-russian-payments