VILNIUS, Lithuania — The European Union on Thursday called on China to revoke sanctions imposed on two Lithuanian banks, arguing there is no justification for them.<\/p>\n
Beijing announced the measures this week against Urbo Bank and Mano Bank in retaliation for EU penalties on two Chinese lenders.<\/p>\n
The Lithuanian banks do not operate in China, giving Beijing\u2019s move a largely symbolic character. Nonetheless, the tit-for-tat measures underscore deepening tensions between the EU and China<\/a> over Beijing’s support for Russia in its war on Ukraine.<\/p>\n In this case, China targeted banks from an EU member with whom diplomatic ties have been particularly strained due to Lithuania’s relationship with Taiwan. <\/p>\n At EU headquarters in Brussels, European Commission spokesperson Olof Gill defended the bloc\u2019s sanctions on Chinese banks.<\/p>\n China \u201cmust respect the problems we have identified,\u201d Gill said. \u201cOur sanctions are the centerpiece of our efforts to minimize the effectiveness of the Russian war machine.\u201d<\/p>\n He said the Commission does not believe that the Chinese countermeasures \u201chave any justification or are evidence based, and therefore we call on China to remove them even now.\u201d<\/p>\n The EU\u2019s latest Russia sanctions package<\/a>, adopted in July and effective August 9, 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.<\/p>\n 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.\u201d<\/p>\n The banks and the government in Lithuania said the sanctions were not expected but would likely have little practical impact.<\/p>\n \u201cAccording to the preliminary assessment, this decision will not have a significant impact on either the country\u2019s financial system or the activities of the banks themselves, since the business models of the mentioned banks are focused on the local market,\u201d the Bank of Lithuania said on Wednesday in a statement.<\/p>\n Marius Arlauskas, the head of administration of Urbo Bank, said: \u201cSince 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.”<\/p>\n The Baltic nation has drawn China\u2019s ire for years. <\/p>\n Beijing expelled Lithuania\u2019s ambassador<\/a> in 2021 in response to Lithuania allowing Taiwan to open a liaison office<\/a> in Vilnius, the Lithuanian capital. China regards Taiwan as a breakaway province and prohibits other countries from having formal ties with Taipei.<\/p>\n Taiwan has long sought closer relations with the Baltic states<\/a>, citing their past experiences under authoritarian rule and embrace of multiparty democracy and liberal values. <\/p>\n