News

2021.12.13 11:01

Lithuania looks to ban transit of Belarusian goods in wake of Belaruskali debacle

BNS2021.12.13 11:01

Lithuania's Transport Ministry has proposed a law introducing sanctions for goods directly or indirectly imported, bought, as well as transferred from Belarus.

The bill, registered on Friday, would allow Lithuania to prevent any transit of Belaruskali fertilisers via Lithuania's territory, the ministry said.

The proposal comes on the back of Lithuania's failure to stop the transit of Belarusian fertilisers after the US introduced sanctions on Belaruskali, the Belarusian state-owned company and one of the biggest potash producers in the world. It is considered one of the lifeline's for the Belarusian regime.

"Contracts signed before the implementation of sanctions in Lithuania must be terminated unilaterally or under mutual agreement or their implementation must be suspended for the durations of sanctions. Contracts running counter to sanctions implemented in Lithuania are forbidden," the bill reads.

If the law is adopted, the government would set the duration, termination, extension of sanctions and exceptions.

The law might lead to losses for businesses because of any restrictions. To mitigate its effects, the Transport Ministry has proposed a transitional period.

Foreign Minister Gabrielius Landsbergis and Transport Minister Marius Skuodis have both handed in letters of resignation over the scandal. The prime minister is yet to make a decision.

Belaruskali exports most of its production via Lithuania. US introduced sanctions on the Belarusian state-owned company on December 8, banning American companies from dealing with Belaruskali.

Lithuanian Railways looks to return €10m to Belaruskali

Meanwhile, Lietuvos Geležinkeliai (Lithuanian Railways, LTG) is looking for ways to return Belaruskali's advance payment for potash fertiliser shipments in January and February.

"Our goal is to repay the money for January and February. We will look for ways and we will try to return it again," LTG spokesman Mantas Dubauskas told BNS on Friday.

The railway operator tried to transfer the additional advance payment back to Belaruskali via Swedbank after a meeting at the prime minister's office on December 7, the day before the US sanctions against the Belarusian company were due to come into force, according to the spokesman.

However, the money returned to LTG's account on December 8 after the transfer was rejected by VTB, the Russian correspondent bank serving Belaruskali.

Dubauskas did not say how much money LTG is trying to repay, but BNS estimates that the payment for two months of services could amount to about 10 million euros.

Eimantas Vytuvis, director of the Center of Excellence in Anti-Money Laundering, says there are two options for repaying the advance payment, but neither of them is fast.

"In order to return an advance payment, an application to OFAC (the US Treasury Department's Office of Foreign Assets Control) is required for the issuance of a special license, which would cover the performance of a specific operation if that operation cannot be performed under the general license," Vytuvis told BNS in a comment.

"Otherwise, it might be possible to make the payment on the basis of [...] LTG's withdrawal from the contract with Belaruskali based on force majeure circumstances – a government resolution or a law adopted by the state," he added.

Last week, Prime Minister Ingrida Šimonytė said it was a normal practice of asking for advance payments, because the railway company could not risk being unpaid.

She said she had been informed about Belaruskali's advance payments this week and asked LTG to repay the money.

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