China Retaliates with Sanctions on Two Lithuanian Banks

China has imposed sanctions on two Lithuanian banks in retaliation for the European Union’s recent action on Chinese financial institutions. The sanctions target two famous banks, UAB Urbo Bankas and AB Mano Bankas, which are no longer able to conduct business and transactions with Chinese organizations and individuals.

The ministry has criticized the EU’s actions and urged Brussels to “rectify its mistakes” and stop harming China’s interests. Ministry has also expressed a hope that the EU will reassess its approach to relations with Beijing.

“Once the EU officially receives them, it will thoroughly study these measures before deciding on any further steps.”

– Olof Gill

In response, the European Commission said that it will carefully review China’s sanctions before deciding on further steps.

Spokesperson on Economic Security,  Olof Gill, noted that the EU has taken a constructive stance and remains open to finding solutions that will lead to removing the banks from the sanctioned list.

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This move has come shortly after the EU imposed new sanctions on two Chinese banks and several Indo-Pacific companies. They were accused of facilitating cryptocurrency transactions that helped Russia evade restrictions.

China has consistently opposed EU and U.S. sanctions that target its financial institutions for maintaining ties with Russia. In recent years, some Chinese financial institutions have faced similar restrictions after allegations of supporting Moscow’s military financing.

Although Beijing did not specify why it chose the two Lithuanian banks, analysts note that China-Lithuania relations have sharply deteriorated since Vilnius allowed a Taiwan representative office to open in 2021. Earlier this year, Lithuania also expelled Chinese diplomats, further straining ties.

The latest sanctions highlight the deepening rift between China and the EU, with both sides struggling to balance political tensions, trade disputes, and security concerns amid Russia’s ongoing aggression in Ukraine.

The sanctions battle between China and the EU highlights how financial institutions often become the first targets in geopolitical disputes. Banks can suddenly face restrictions that cut them off from major markets, disrupting operations and damaging reputations overnight.

This underscores why sanctions compliance, payment screening, and ongoing due diligence are no longer optional but critical safeguards for financial institutions worldwide. As global politics grow more unpredictable, institutions must protect themselves against exposure to sanctioned entities and high-risk transactions.