Lithuania’s FCIS: exemptions are possible in servicing payments for Kaliningrad transit

  • 2022-08-04
  • BNS/TBT Staff

VILNIUS – Banks operating in Lithuania may be granted exemptions and allowed to handle payments for the services related to transit to and from Russia’s exclave of Kaliningrad, the Lithuanian Financial Crime Investigation Service (FCIS) has said adding that it will nonetheless assess those settlements on a case-by-case basis.

The FCIS has issued its position on the matter as Lithuania’s authorities seek to clarify whether the country’s banks may face the risk of breaching international sanctions against Russia and Belarus by servicing payments made by sanctioned companies of those countries to Lietuvos Gelezinkeliai (Lithuanian Railways, LTG), Lithuania’s state-owned railway company.

“The Financial Crime Investigation Service is guided by directly applicable EU regulations, European Commission’s guidelines, which state that, based on the conditions set forth by the European Commission, sanctions do not apply to the transit of goods by rail between mainland Russian Federation and Kaliningrad region,” the FCIS said in a response sent to BNS on Thursday.

In its response, the service stated its opinion on whether the banks operating in Lithuania should make an exemption for Kaliningrad transit settlements and service those payments even if those are executed by natural and legal persons sanctioned by the EU and transatlantic partners.

Transport Minister Marius Skuodis stated earlier this week that the Lithuanian Financial Crime Investigation Service's say would be key for banks operating in Lithuania to decide whether to service payments from Russian companies for Kaliningrad transit.

The FCIS stated in its response that Lithuania’s natural or legal persons willing to use exemptions or be allowed not to apply the restrictions and obligations set forth by international sanctions should apply to the service over an exemption.

“Having received an application for an exemption, the FCIS will assess each case individually and decide whether to grant the exemption or not,” the service said.

Lithuania's Foreign Ministry said last week it had received a diplomatic note from Russia's temporary charge d'affaires in Lithuania Sergey Ryabokon over potential suspension of Kaliningrad transit settlements.

The Russian diplomat told Russia's state-run Rossiya 24 TV channel that operators from Russia using the services of Lietuvos Gelezinkeliai are made to pay for freight transport, adding that Vilnius has diverted all these payments through the only bank, Siauliu Bankas. The latter is set to suspend all operations with Russia from September.

He slammed this move as a new blow to transit to Kaliningrad region via Lithuania, “but from another direction”.

Siauliu Bankas said on its website that, following September 1, “exemptions to the execution of payments may be applied by prior agreement in cases where payments are made for humanitarian purposes or to ensure state functions”.

The bank also reported that it was currently consulting competent authorities with the aim of clarifying the situation.

Meanwhile, Skuodis earlier said that the Transport Ministry had issued an opinion that no exemptions should apply to Kaliningrad transit settlements.

Russia resumed the transit of sanctioned goods to Kaliningrad in July, about a month after Lithuania banned it based on the European Commission's guidance issued in April. 

After Russia called the restrictions a blockade of the Kaliningrad region and threatened to retaliate, the EU's executive body issued new guidance in July, saying that Lithuania had to allow the movement of sanctioned goods by rail.