China has imposed sanctions on two Lithuanian banks, UAB Urbo Bankas and AB Mano Bankas, as a direct countermeasure to the European Union's recent decision to sanction two Chinese financial institutions. The EU had placed Heihe Rural Commercial Bank and Heilongjiang Suifenhe Rural Commercial Bank on its sanctions list, alleging they provided cryptocurrency services that helped circumvent sanctions against Russia. China's Ministry of Commerce stated that the sanctioned Lithuanian banks are now prohibited from conducting transactions and cooperating with entities within China, effective August 13, 2025. This move escalates tensions between China and the EU, largely due to their differing stances on the conflict in Ukraine.
The EU's action, which took effect on August 9, was met with strong disapproval from Beijing, which labeled the accusations as "groundless" and stated that the EU's actions severely infringed upon the legal rights and interests of Chinese companies. Olof Gill, a representative for the European Commission on economic security, indicated that the EU would review China's measures before determining an official response. These tit-for-tat sanctions reflect a broader pattern of trade and diplomatic disputes in China-EU relations, influenced by issues such as trade imbalances and geopolitical stances. The EU's strategy is seen as an evolution in its approach to economic security, adopting a more assertive stance. The ongoing exchange of sanctions highlights the interconnectedness of global financial systems and the potential for geopolitical disagreements to trigger economic repercussions.