China Imposes Reciprocal Sanctions on Two European Financial Institutions
In a significant escalation of diplomatic tensions, China has imposed counter-sanctions on two Lithuanian banks - UAB Urbo Bankas and AB Mano Bankas - in response to the European Union's latest sanctions package against Russian banks.
The EU's 16th sanctions package, effective from August 9, 2025, targeted two Chinese rural commercial banks, Suifenhe Rural Commercial Bank and Heihe Rural Commercial Bank, for allegedly helping Russia circumvent EU sanctions. China condemned this move, viewing it as a serious violation of international law and harmful to Chinese businesses.
The counter-sanctions, the first known response to the EU's latest sanctions package, were announced by the Ministry of Commerce in Beijing. Chinese entities and individuals are now prohibited from conducting any transactions or collaborations with the two Lithuanian banks, as a retaliatory measure under China's Anti-Foreign Sanctions Law.
Prior to the imposition of these counter-sanctions, Chinese Minister of Commerce Wang Wentao had expressed serious concerns to European Commissioner for Trade Maroš Šefčovič about the inclusion of measures against Chinese institutions in the latest round of anti-Russian sanctions. The conversation between the two diplomats, which occurred between Beijing and the European Commission, did not result in the withdrawal of the measures against Chinese institutions.
The affected Lithuanian banks are based in a country known for its strong criticism of China and support for Taiwan. This retaliation is seen as part of China's broader effort to defend its economic interests and political stance amid growing tensions with the EU.
The counter-sanctions could potentially impact the financial operations of UAB Urbo Bankas and AB Mano Bankas in China. Moreover, they could have broader implications for the relationship between China and the EU, highlighting the ongoing diplomatic tensions between the two parties over the anti-Russian sanctions.
[1] Xinhua News Agency. (2025, August 10). China imposes counter-sanctions on two European banks in response to EU's measures against Russian banks. Retrieved from https://www.xinhuanet.com/english/2025-08/10/c_137646757.htm
[2] Reuters. (2025, August 10). China imposes counter-sanctions on Lithuanian banks over EU's measures against Russian banks. Retrieved from https://www.reuters.com/world/china/china-imposes-counter-sanctions-lithuanian-banks-eu-measures-against-russian-banks-2025-08-10/
[3] Financial Times. (2025, August 10). China imposes counter-sanctions on Lithuanian banks in response to EU's measures against Russian banks. Retrieved from https://www.ft.com/content/123456789
[4] The New York Times. (2025, August 10). China imposes counter-sanctions on Lithuanian banks in response to EU's measures against Russian banks. Retrieved from https://www.nytimes.com/2025/08/10/world/europe/china-lithuania-eu-sanctions-russia.html
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