Transit via LT Continues

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Lithuanian Railways resumed transportation of goods between mainland Russia and Kaliningrad last month, following a bitter stand-off between the EU and Moscow. Now, Lithuanian banks plan to stop processing all payments from Russia – including those for Kaliningrad transit, leading to fears of another crisis.

Šiaulių Bankas currently remains the only financial institution through which Russia can pay Lithuanian Railways for transporting goods to and from Kaliningrad. However, the bank recently announced it would stop processing these payments as of September.

Last week, a Russian envoy delivered a note to Lithuania’s Foreign Ministry on this question.

Foreign Minister Gabrielius Landsbergis said: “We have received the note, read it and forwarded it to our colleagues in the Ministry of Transport and Communications. Sanctions in the field of transport to any extent are the responsibility of the Ministry of Transport and Communications,” he said.

He added that the envoy’s raising of the issue in the media was another attempt by Moscow to escalate tensions over the Kaliningrad transit. “Diplomatic notes are delivered frequently. Not all notes are discussed in the media.” He called it an an opportunity to create pressure by using journalists to put pressure on the government.

Transport Minister Marius Skuodis commented that the issue is between Russia and private banks.“The state cannot force banks in any way, it will depend on their own decisions,” the minister told LRT RADIO. Later the same day, Skuodis said the country’s financial crime watchdog, the FNTT (Financial Crime Investigation Service) will play an important role when banks decide on whether to service payments from Russian firms.The position of the Ministry of Transport and Communications and the Ministry of Foreign Affairs and other ministries is important, but the FNTT is in control, he told reporters in Vilnius.
He added that the ministry believes the payments should be allowed. Skuodis also called the existing situation confusing due to the constantly changing implementation of the sanctions.
Opposition parties say this is potentially yet another looming foreign policy crisis this government is walking into.