The EU has demanded Beijing revoke “unjustified” sanctions on two Lithuanian banks in a dispute also rooted in long-standing tensions over Taiwan.
The European Union called on China to revoke sanctions imposed on two Lithuanian banks in retaliation for EU penalties on Chinese lenders linked to Russia’s war in Ukraine.
Beijing announced the measures this week against Urbo Bank and Mano Bank despite the fact that these Lithuanian banks do not operate in China, giving Beijing’s move a largely symbolic character.
Nonetheless, the tit-for-tat measures underscore the deepening divide between Brussels and Beijing over China’s support for Russia in its war on Ukraine.
At EU headquarters in Brussels, European Commission spokesperson Olof Gill defended the bloc’s sanctions on Chinese banks.
He said the Commission does not believe that the Chinese countermeasures “have any justification or are evidence-based, and therefore we call on China to remove them even now.”
EU sanctions on Russia’s war in Ukraine
The EU’s latest Russia sanctions package, adopted in July and effective 9 August, included Heihe Rural Commercial Bank and Heilongjiang Suifenhe Rural Commercial Bank. The bloc accused them of providing crypto-asset services that help Moscow evade restrictions.
In explaining its sanctions on the Lithuanian banks, the Chinese Ministry said the EU sanctions on Chinese firms had “a serious negative impact on China-EU economic and trade relations and financial cooperation.”
The banks and the government in Lithuania said the sanctions were not expected but would likely have little practical impact.
“According to the preliminary assessment, this decision will not have a significant impact on either the country’s financial system or the activities of the banks themselves, since the business models of the mentioned banks are focused on the local market,” the Bank of Lithuania said on Wednesday in a statement.
Marius Arlauskas, the head of administration at Urbo Bank, also said that “since we do not have any business partnerships with Chinese individuals or legal entities, the sanctions will have no impact on the activities of Urbo Bank and the implementation of prudential regulations.”
