Overview

• China’s Ministry of Commerce announced an immediate prohibition on Chinese agencies and individuals from engaging in any transactions, cooperation or activities with UAB Urbo Bankas and AB Mano Bankas, effective August 13.
• Beijing framed the ban as direct retaliation for the EU’s August 9 sanctions on Suifenhe Rural Commercial Bank and Heihe Rural Commercial Bank, which the bloc accused of facilitating Russia-related sanctions evasion.
• Lithuania has emerged as a focal point after its outreach to Taiwan and vocal criticism of China, prompting Beijing to single out two local banks in its countermeasures.
• Since early 2024, the EU and its allies have tightened sanctions on firms alleged to support Russia’s war effort, citing NATO warnings about Chinese companies supplying critical microelectronics and equipment to Moscow.
• Observers say the tit-for-tat measures risk escalating diplomatic tensions and disrupting cross-border banking ties between China and EU member states.