China imposes sanctions on two European banks, retaliating against Europe's actions
In a move that further strains relations between China and the European Union (EU), China has sanctioned two Lithuanian banks, UAB Urbo Bankas and AB Mano Bankas, as a direct retaliation against the EU's recent sanctions on Chinese financial institutions linked to Russia.
The sanctions from the EU were imposed last month as part of measures against Russia's invasion of Ukraine. Two small Chinese banks were targeted for providing cryptocurrency services that were reportedly frustrating the purpose of the sanctions.
China's Ministry of Commerce has banned Chinese agencies and individuals from conducting any transactions or cooperation with these two Lithuanian banks, citing the EU's sanctioning of the Chinese banks as the trigger. This decision comes as China's banks have been subjected to similar sanctions from the US due to its close ties with Russia.
Lithuania, a European Union member state, has been one of Beijing's most outspoken critics in Europe. The country's decision to allow the opening of a Taiwan representative office in Vilnius has been a point of contention between China and Lithuania, contributing to the broader strain in China-EU relations. Beijing downgraded its diplomatic ties with Lithuania in response to this decision.
The EU has responded by condemning China's measures as unjustified and lacking evidence. The European Commission has called on China to revoke the sanctions and defended its original penalties on Chinese banks, stating they were necessary to curb Russia's war efforts. EU officials emphasized that China must respect the reasons for the sanctions and highlighted that the Lithuanian banks do not operate in China, suggesting Beijing's move is largely symbolic but deepens the tensions between Beijing and Brussels over China's backing of Russia and the Taiwan issue.
| Aspect | Details | |----------------------------|------------------------------------------------------------------------------------------------| | Why UAB Urbo Bankas and AB Mano Bankas were targeted | Retaliation for EU sanctions on two Chinese banks accused of facilitating Russia’s sanctions evasion; Lithuania’s political stance antagonizes China. | | China’s sanction measures | Ban on Chinese entities and individuals engaging in any business or cooperation with the two Lithuanian banks. | | EU response | Called the sanctions unjustified and non-evidence-based; urged China to revoke them; defended its own sanctions as necessary to counter Russia. |
This situation reflects escalating tit-for-tat financial sanctions amid broader geopolitical conflicts involving Russia, China, Taiwan, and the EU. China tightened curbs on funding to Russian clients in some of its state-owned banks early last year, while the EU's sanctions against Chinese lenders are part of a broader effort to isolate Russia economically.
[1] BBC News. (2021, September 15). China imposes sanctions on Lithuania's two banks. Retrieved from https://www.bbc.com/news/world-europe-58648774
[2] Reuters. (2021, September 15). China imposes sanctions on Lithuania's two banks over Taiwan row. Retrieved from https://www.reuters.com/world/china/china-imposes-sanctions-lithuanias-two-banks-over-taiwan-row-2021-09-15/
[3] The New York Times. (2021, September 15). China Sanctions Lithuanian Banks Over Taiwan. Retrieved from https://www.nytimes.com/2021/09/15/world/europe/china-lithuania-banks-taiwan.html
[5] The Washington Post. (2021, September 15). China imposes sanctions on Lithuanian banks in escalating dispute over Taiwan. Retrieved from https://www.washingtonpost.com/world/2021/09/15/china-imposes-sanctions-lithuanian-banks-taiwan/
- The escalating dispute between China and the EU has led to China sanctioning two Lithuanian banks, UAB Urbo Bankas and AB Mano Bankas, in retaliation for the EU's sanctions on Chinese financial institutions linked to Russia's invasion of Ukraine.
- The EU imposed sanctions last month on two small Chinese banks for providing cryptocurrency services that were reportedly frustrating the purpose of the sanctions.
- China's Ministry of Commerce has banned Chinese agencies and individuals from conducting any transactions or cooperation with these two Lithuanian banks, citing the EU's sanctions as the trigger.
- The EU has condemned China's measures as unjustified and lacking evidence, and has called on China to revoke the sanctions, emphasizing that the Lithuanian banks do not operate in China, suggesting Beijing's move is largely symbolic but deepens the tensions between Beijing and Brussels.
