2022.08.05 16:07

Banks in Lithuania waiting for additional clarifications over Kaliningrad transit

BNS 2022.08.05 16:07

Banks operating in Lithuania say they are waiting for clarifications from the government on whether to handle payments for Russia’s Kaliningrad transit.

According to the Lithuanian Banking Association, they need assurances they will not breach international sanctions for servicing Russian payments.

“For a financial institution to be able to consider a possibility to apply an exemption, specifically related to meeting the need of the state, that need must be confirmed in writing by a competent public authority,” the Lithuanian Banking Association said in a press release on Friday.

The association did not specify the public authority.

It said, however, that such an acknowledgment would enable the Lithuanian Financial Crime Investigation Service (FNTT) to decide on eligibility for an exemption.

Read more: Lithuania and Kaliningrad – updates

The FNTT confirmed to BNS earlier this week that banks operating in Lithuania might be granted exemptions and allowed to handle payments for the rail transit services. It would still assess the applications on a case-by-case basis.

The service has already granted one such exemption, the FNTT said.

Meanwhile, the association said that the majority of Lithuania’s financial institutions had already decided to gradually stop handling Russian and Belarus payments due to the risk of violating sanctions.

individual exemptions might only apply to payments related to humanitarian aid, like pensions or medical products, as well as to the basic needs of the state, like the implementation of international agreements.

Lithuania's Foreign Ministry said last week it had received a diplomatic note from Russia's temporary charge d'affaires in Vilnius, Sergey Ryabokon, warning that banks may stop accepting payments for Kaliningrad transit services.

He said this would amount to another blow to Kaliningrad transit, “but from another direction”.

This followed the announcement of Šiaulių Bankas that it would stop accepting Russian payments as of September 1. It remains the only bank in Lithuania handling payments from Russia to Lithuania's state-owned railway company.

The bank later said it was awaiting clarifications and it may continue servicing the payments.

Also this week, Transport Minister Marius Skuodis said exemptions should apply to Kaliningrad transit settlements.