The Lithuanian parliament on Tuesday voted to denounce three international agreements with Russia and Belarus related to economic cooperation.
The MPs revoked Lithuania’s treaties with Belarus and Russia on the promotion and protection of investments, as well as the treaty with Russia on the avoidance of double taxation of income and capital and the prevention of fiscal irregularities. All three documents were signed in 1999.
The votes were 90 to 96 in favour, one against, and one to four abstentions.
“The reality is that we have a neighbour posing a threat not just to Lithuania’s national security, but to all of Europe through its collaboration with Russia. Therefore, there can be no economic or any other cooperation that supports this regime,” said MP Vilius Semeška of the conservative Homeland Union-Lithuanian Christian Democrats (TS-LKD).
Arvydas Anušauskas, another conservative MP, added that all serious investors have withdrawn from Russia and that Lithuania cannot encourage new investments in the current situation.
MP Giedrius Surplys, of the opposition Lithuanian Farmers and Greens Union (LVŽS) said that the agreements with Russia are “de facto ineffective”.
“Our companies are being terrorised, losing businesses and cargo,” he said.
Surplys also noted that the denunciation of the treaties is not related to Kaliningrad transit.
Meanwhile, Valius Ąžuolas, another LVŽS member of parliament, said that with the denunciation of the agreements, Lithuanian businesses that have invested in Russia or Belarus will lose their protection.
“Lithuanian businesses invested in Kaliningrad 10 years ago or more,” he noted.
Žygimantas Pavilionis, the conservative vice-speaker of the parliament, criticised MPS who opposed the denunciation, calling them disloyal to Lithuania.
“Those of you opposing the denunciation are siding with the aggressor,” he said.
The treaties on investment promotion established a legal framework aimed at encouraging mutual investments by providing guarantees, protection against expropriation, and compensation, while allowing the unrestricted transfer of investment-related funds abroad.
The Foreign Ministry has said that the denunciation of the investment promotion agreements will not have negative consequences and that their termination will take effect in 12 months.
The denunciation of the 25-year-old treaty on the double taxation of income and capital is set to increase the income and corporate tax rates for Russian residents’ incomes from Lithuanian sources from 0-10 percent to 20 percent and expand the tax base for them.
Lithuania has already denounced its agreement with Belarus on trade and economic cooperation.
The parliament also denounced Lithuania’s agreement with Belarus on the principles of cross-border cooperation last year and its legal assistance treaty with Russia in June.
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