China imposes sanctions on Lithuania's Urbo Bankas, Mano Bankas

VILNIUS - China's Ministry of Commerce said on Wednesday it had imposed sanctions on two Lithuanian banks - Urbo Bankas and Mano Bankas.

According to the ministry, the move was made in response to the European Union's 18th package of sanctions against Russia, adopted in July, which also imposed restrictions on two Chinese banks.

The bloc's aim is to limit Moscow's contacts with its international partners in order to eventually bring an end to the war in Ukraine.

"China firmly opposes this (the sanctions - BNS). (…) China has decided to include the two banks of the European Union, Urbo Bankas and Mano Bankas, in the Counteraction List, and to prohibit organizations and individuals within China from engaging in transactions, cooperation and other activities with them," the ministry's statement reads.

As BNS reported earlier, the two Chinese banks on the latest EU sanction package are accused by the West of links to Russia's military industry.

The Chinese Ministry of Commerce protested and vowed to "take necessary measures to firmly protect the legitimate rights and interests of Chinese companies and financial institutions".

Lithuanian-Chinese relations are currently among the worst in the EU as Beijing is angered by the relationship between Vilnius and Taiwan started in 2021.

In response, China unilaterally downgraded its diplomatic representation from the level of ambassadors to that of temporary charge d'affaires, renamed its embassy in Lithuania the " the Office of the Chargé d'Affaires of the People's Republic of China in Lithuania", and renamed Lithuania's mission in Beijing accordingly.

Lithuania still officially considers both missions to be embassies and says that China's actions run counter to international law. Lithuanian diplomats are no longer working in China because Beijing does not recognize their status.

The European Commission opened a case against Beijing at the World Trade Organization in early 2022 over possible Chinese trade restrictions against Lithuania, but the dispute is now stalled.