Linas Jegelevičius for the BNN
Some joke now that Lithuania’s Foreign minister Gabrielius Landsbergis will go into history books as the most pugnacious Lithuanian Foreign minister ever and who was «ready» and «indeed ready» to step down amid a big scandal, but who never did so and who, perhaps, never intended to do so.
Lithuanian Prime Minister Ingrida Šimonytė announced late Tuesday, December 14, that her Foreign and Transport ministers, Gabrielius Landsbergis and Marius Skuodis respectively, will keep their jobs despite the scathing scandal stemming from the revelation that Belarusian potash fertilisers are still being hauled across Lithuania even though they are under US sanctions in place from December 8.
Yet the government has found a scapegoat, Mantas Bartuška, the head of the state-owned railway company LTG (Lithuanian Railways), who is resigning amid the scandal. However, it can take time, as one of the best paid Lithuanian CEOs with the monthly salary nearly of 10 thousand euros is now flanked with his attorneys, negotiating his severance package.
«The whole debacle is a big blow to the liberal-conservative government and, as a matter of fact, the gist of the problem has not been addressed yet – the Belarusian freight will continue to use the Lithuanian railways. It would be preposterous to think the ministers did not know that, with the US sanctions in place, the cargoes will not stop. In a country of our size, everybody knows everything,» Rimvydas Valatka, a well-known Lithuanian analyst, told BNN.
In his words, allowing transporting Belarusian potash past December 8 is like a «spit in the face of the United States, the Baltics’ key alley.”
Belaruskali product shipments via Lithuania did not stop after US sanctions against it came into force on December 8, because the Belarusian company had made an advance payment to LTG, sufficient to cover the cost of rail services for several months.
Attempting to explain her decision to leave Landsbergis and Skuodis in their ministerial seats, the PM was referring to «the escalated geopolitical situation», as well as the ongoing challenges of COVID-19 and migration.
Read also: BNN ANALYSES | Belarus’ Belaruskali threatens Lithuania’s Conservatives-led Cabinet
«It would be irresponsible to risk and cause uncertainty that would accompany even an attempt to form a new ruling coalition or significantly change the government makeup,» the PM said in a statement.
Šimonytė expects the governmental National Security Commission to make a decision on the state railway company’s contract with Belarus’ potash giant Belaruskali by the end of this year.
Belaruskali exports around 95 percent of all of its fertilisers via Lithuania – around 11 million tons a year – and the trade is one of the regime’s biggest cash cows.
«There are some answers that are not national, such as aligning European sanctions with US sanctions. We can initiate (processes), but we can’t promise that we’ll have decisions by then,» the prime minister told reporters.
The government now excuses itself that it was seeking to terminate the state railway company’s contract with Belaruskali, even though it said the US sanctions do not directly apply to the transit of fertilisers through Lithuania.
Belaruskali fertilisers account for around four fifths of all rail freight in Lithuania. LTG Cargo carried around 53mn tonnes of cargo last year and received 397 million euros in revenue. In the first six months of this year it has carried 24mn tonnes and received 177 million euros.
BKT, a Klaipeda-based stevedoring firm in charge of handling Belaruskali fertilisers, said that the transit of Belarusian potash fertilisers via Lithuania cannot be suspended as that would run counter to international agreements of Lithuania, the EU and US. BKT sends Belaruskali potash to over 160 countries worldwide.
«There are no and there cannot be any US sanctions for Belarusian potash transit via Lithuania since transit, as a procedure, cannot be subject to sanctions,» said Igor Udovickij, who has a 70 percent stake in BKT. Belaruskali owns the remaining 30 percent in BKT.
In his words, all states, including the United States, are subject to international treaties – the World Trade Organization agreement and the United National Convention on the Law of the Sea. They guarantee the freedom of transit for states without sea access. «Naturally, having ratified these agreements, the US and the EU cannot violate them and do not violate them,» the BKT owner said.
Moreover, he pointed out, the Seimas of Lithuania, the country’s legislature, has ratified three bilateral agreements between Lithuania and Belarus and they set the regime for the freedom of transit of Belarusian cargo via Lithuania and its port of Klaipeda.
All those involved in the transit of potash fertilisers, including Lithuanian state institutions, have consulted the US Department of the Treasury and the European Commission on the application of the sanctions, Udovickij said, and they were told that Belarusian potash can be taken via Lithuania if payments are made in euros, not US dollars. «Therefore, our actions are completely legitimate and coordinated,» said Udovickij.
A source within the Port of Klaipeda told BNN that only «a relatively small part» of the Belaruskali production is subject to EU sanctions. Meanwhile, American sanctions target all the production.
«The EU believes that any halt or even a disruption of Belarusian potash deliveries would affect badly agricultural activities in many regions worldwide, especially in Africa and some Asian countries. There is an opinion that a disruption would also jack up food prices globally. And lastly, the EU is sensitive for Lithuania, which key economic interests suffer with Belarusian fertilisers out from the country,» he said.
The Lithuanian Transport ministry has scrambled this week to draft a bill that aims to ban any transit of Belarusian goods via the Lithuanian territory.
But some analysts say that such a law would run counter against the principles and regulations of the World Trade Organisation. «If Lithuania followed on the intent, it could end up with being handed a multi-million- euro suit by Belarus,» a Lithuanian economist says.
The embarrassed Foreign minister, Landsbergis, said on Wednesday, December 15, that US and EU sanctions should be ‘synchronised’ as this would make it easier to implement them. Landsbergis once again reiterated that the existing American sanctions have no legal consequences for Lithuania. The government, he said, is still looking for ways to manage the arising legal and financial risks.
Lietuvos Geležinkeliai (Lithuanian Railways, LTG) may need around 49 million euros in subsidies annually to compensate for the loss of fertiliser shipments by US-sanctioned Belaruskali, outgoing Bartuška, the state railway group’s CEO, said.
The CEO noted that it had already been preliminarily estimated that the railway group would lose around 60 million euros in revenue.
Meanwhile, Latvia and Estonia say they do not plan to take over Belarus transit cargos diverted from Lithuania due to the EU and US sanctions on Belarusian companies, the prime ministers of both countries confirmed last week.
BNN ANALYSES | Embarrassed Lithuanian government makes excuses, no solution on US-sanctioned Belaruskali
Linas Jegelevičius for the BNN