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Lithuania to keep Kaliningrad trade restrictions while working out new rules
Global Banking & Finance Review®
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By Andrius Sytas
VILNIUS (Reuters) -European Union member Lithuania will keep restrictions on trade flows to the Russian enclave of Kaliningrad while it works out new rules, Prime Minister Ingrida Simonyte said on Thursday.
The European Commission said on Wednesday that sanctioned Russian goods could transit through the bloc’s territory by rail to the enclave, after tensions between Moscow, Brussels and Lithuania escalated.
“Controls will need to be in place for certain sanctioned freight… Lithuania will have to set rules for the controls, and until that time the current procedures will remain in place”, Simonyte told a press conference.
She gave no timeline for creating the new rules.
Kaliningrad, which is bordered by EU states and relies on railways and roads through Lithuania for most goods, has had some freight transport from mainland Russia cut off since June 17 under sanctions imposed by Brussels.
The sanctions were designed to bar entry into the EU of certain Russian products, such as vodka and steel.
Moscow earlier said restricting overland transit of goods from Russia to Kaliningrad amounted to an illegal blockade; Lithuania said it had no choice but to enforce rules imposed by Brussels.
The European Commission guidance published on Wednesday said the trade sanctions should not apply to transport between Russia and its exclave, so long as volumes do not exceed their averages over the last three years, reflecting “the real demand for essential goods at the destination”.
RELUCTANT ACCEPTANCE
Lithuania does not welcome the new guidance, said Simonyte, but will submit to it out of respect for the European Commission and to Lithuania’s transatlantic partners.
“We intend to take note of this opinion, but not because we believe the (sanctions) application since June 16 was wrong”, the Prime Minister added.
U.S. State Department spokesperson Ned Price welcomed the move and the Russian Foreign Ministry spokesperson called it “a demonstration of realism and common sense”.
Kaliningrad, which includes a Baltic port and is home to around 1 million people, was annexed by the Soviet Union from Germany after World War Two and is connected to the rest of Russia only through NATO and EU territory, mainly rail via Belarus through Lithuania.
Goods that fall within humanitarian or essential categories, such as food, were always exempted from the sanctions. Passenger traffic is not banned and Kaliningrad can still be reached by air or sea.
(Reporting by Andrius Sytas, editing by Stine Jacobsen, Alexandra Hudson)
Sanctions are restrictive measures imposed by countries or international organizations to influence or punish nations, organizations, or individuals. They can include trade restrictions, financial penalties, or other economic measures.
The European Commission is the executive branch of the European Union responsible for proposing legislation, implementing decisions, and managing the EU's day-to-day operations.
Financial stability refers to a condition in which the financial system operates effectively, with institutions able to manage risks and absorb shocks without leading to a systemic crisis.
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