China sanctions two EU banks

Published: 1 hour ago

China sanctioned a pair of banks in the EU, fulfilling a promise to retaliate after the bloc targeted some Chinese lenders over Russia's invasion of Ukraine.

China included UAB Urbo Bankas and AB Mano Bankas in its countermeasure list, the Ministry of Commerce said in a statement on Wednesday. The move bans organizations and individuals in China from transactions, cooperation and other activities with the institutions.

In a separate statement, the ministry said it hoped the EU would cherish its relationship with China, correct its wrongdoing and stop harming the nation's interests.

Olof Gill, a spokesman at the European Commission, said that "once formally received, the EU will study these measures in detail, before deciding on any additional next steps."

"The EU has already been engaging constructively with China on the issue of the sanctioned Chinese entities," Gill said, and it "is open to identifying a mutually acceptable solution that could ultimately lead to the de-listing of the banks."

Last month, the European Union sanctioned two Chinese banks and five companies based in the Asian nation as part of the latest round of measures against Moscow. The EU said the banks were listed for providing cryptocurrency services that were frustrating the purpose of the sanctions.

China's close ties with Russia had subjected its banks to similar punitive measures from the US, prompting them to reevaluate businesses and clients. Some of its state-owned banks tightened curbs on funding to Russian clients early last year, after the US authorized secondary sanctions on overseas financial firms that aid Moscow's war effort.

"Our bank does not conduct financial transactions in China and has no business relationships with individuals or organizations in this country," UAB Urbo Bankas CEO Marius Arlauskas said in a statement. "Since we do not have any business partnerships with Chinese individuals or legal entities, the sanctions will have no impact."

AB Mano Bankas also said in a statement that it "doesn't conduct active operations" in China, so the move will have no effect on daily operations.

UAB Urbo Bankas and AB Mano Bankas are both based in Lithuania. Beijing didn't give a reason for choosing them but its move comes after tensions with the Baltic nation. Last year, Lithuania expelled three Chinese embassy employees, saying they weren't accredited.

Beijing had earlier downgraded its diplomatic ties with Lithuania in response to its decision to allow the opening of a Taiwan representative office in Vilnius.

Ties between Beijing and Brussels have also been strained in recent years due to China's support for Russia's war in Ukraine and trade issues. Last month, Beijing hit back at European Commission President Ursula von der Leyen after she accused it of distorting trade and limiting access for Europe's firms.
- Bloomberg

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