China has imposed sanctions on two Lithuanian lenders in response to the European Union’s Russia package, escalating friction in EU–China ties.
Beijing’s Ministry of Commerce said on 13 August that UAB Urbo Bankas and AB Mano Bankas are banned from conducting transactions or cooperation with organisations and individuals in China. The move comes days after the EU added two regional Chinese banks to its Russia sanctions list. China described Brussels’ action as groundless and urged the bloc to reverse course.
The two Chinese institutions cited by the EU are Heihe Rural Commercial Bank and Heilongjiang Suifenhe Rural Commercial Bank. The listings were adopted on 18 July and, under the relevant legal acts, the entry into force for transaction bans concerning these banks is 9 August 2025. The EU stated the measures were taken because the institutions were “significantly frustrating” the purpose of its sanctions regime, including via crypto-asset services.
China’s commerce ministry framed its step as a countermeasure mirroring the EU’s actions. In a statement, it called on the EU to “cherish” long-standing cooperation in economy, trade and finance, to “correct wrongdoings”, and to stop harming China’s interests.
The Lithuanian lenders affected by Beijing’s order are small domestically focused banks. Urbo Bankas and Mano Bankas provide retail and SME services in Lithuania. Their direct exposure to China is limited, but the prohibition applies to all Chinese organisations and individuals, potentially affecting correspondent relationships or clients with links to China.
The exchange underscores the sharper tone in EU–China relations this summer. European Commission President Ursula von der Leyen said after a July summit in Beijing that trade ties had reached a “clear inflection point”. EU officials have pressed China to use its influence to discourage Russia’s war against Ukraine, while continuing to expand measures aimed at curbing circumvention and tightening energy- and finance-related restrictions.
The EU’s 18th sanctions package, published in the Official Journal on 19 July, broadened existing prohibitions and for the first time imposed transaction bans on non-EU financial institutions found to be frustrating the regime. Legal briefings note that, alongside additional Russian banks, the package added the two Chinese rural lenders to a list that triggers full transaction prohibitions for EU operators once the entry-into-force date is reached.
For Lithuania, the development adds another layer to already complex relations with China. Vilnius has in recent years taken positions that have complicated ties, including its stance on Taiwan, while maintaining strong support for Ukraine. Today’s measures target two Lithuanian banks, though Beijing’s statement referred to “EU banks”.
Practically, China’s ban means Urbo Bankas and Mano Bankas cannot transact with Chinese counterparties or maintain cooperation agreements in areas such as payments, trade finance, or letters of credit involving China-based entities. For EU businesses, the immediate compliance issue remains the EU side of the ledger: from 9 August, EU persons are prohibited from transactions with the two listed Chinese rural banks, subject to any wind-down permissions set out in the acts.
Both sides have signalled they are monitoring the situation. Beijing said it would “resolutely safeguard” the rights and interests of Chinese entities, while the European side is assessing the implications of China’s move as part of broader engagement with Beijing on sanctions implementation and trade. The episode illustrates how measures tied to the war in Ukraine are increasingly intersecting with EU–China economic policy, with banking channels and compliance systems squarely in scope.
Lawyers and compliance advisers note that the July measures expanded EU criteria for listing third-country institutions involved in facilitating Russia’s financial messaging systems or otherwise frustrating the sanctions regime, including by using Russia’s SPFS network. The legal texts provide staged application dates and limited wind-down windows, with specific entry-into-force dates set out for the two Chinese banks.
The latest exchange comes against a wider backdrop of frictions over trade, industrial policy and security. The EU has advanced anti-subsidy investigations into Chinese electric vehicles and moved towards tariffs, while NATO leaders have described China as a “decisive enabler” of Russia’s war effort through supplies of dual-use goods. Beijing rejects those assessments, reiterating support for a political settlement in Ukraine.
