China Hits Back at Europe, Sanctions two EU Banks

Irked at EU’s decision to list two Chinese banks for their links to Russia, China’s Ministry of Commerce (MOFCOM) on Wednesday imposed sanctions on two Lithuanian banks with immediate effect, barring them from conducting any transactions or cooperation with Chinese organisations and individuals, in a direct retaliation against the European Union’s latest Russia-related sanctions.

In accordance with relevant regulations of China’s Anti-Foreign Sanctions Law and relevant rules of the Provisions for the Implementation of China’s Anti-Foreign Sanctions Law, and with the approval of the national anti-foreign sanctions working mechanism, China has included – UAB Urbo Bankas and AB Mano Bankas – in the countermeasures list.

It may be recalled that on 18 July 2025, the EU added two Chinese financial institutions – Suifenhe Rural Commercial Bank and Heihe Rural Commercial Bank, both located in the cities closer to China-Russia border – to the sanctions list in its 18^th round of sanctions against Russia.

This constitutes a serious violation of international law and basic norms governing international relations, and severely damages the legitimate rights and interests of Chinese companies, Chinese Minister of Commerce Wang Wentao said in a statement.

“To resolutely safeguard its sovereignty, security and development interests, in accordance with the Anti-Foreign Sanctions Law of the People’s Republic of China and other relevant laws and regulations, and with the approval of the National Anti-Foreign Sanctions Coordination Mechanism, China has decided to place the two banks on its countermeasure list,” the statement said.

Violation of International Law

Responding to a media inquiry, the spokesperson said the move by the EU gravely violates international law and basic norms governing international relations, severely damages the legitimate rights and interests of Chinese companies, and has a serious negative impact on China-EU economic and trade relations, and financial cooperation.

One of the banks was the most outspoken critics of Beijing within the EU, and a country previously targeted by Chinese economic measures after strengthening ties with Taiwan.

It may be recalled that the relations between China and Lithuania have nosedived since 2021 after Lithuania expelled three Chinese embassy employees, on the ground that they weren’t accredited. Prior to that, Beijing had earlier downgraded its diplomatic ties with the Baltic nation in response to Lithuania’s decision to allow the opening of a Taiwan representative office in Vilnius.

Following Lithuania’s autumn elections in 2024, the new government in Lithuania had made re-establishing and normalising relations with China a foreign policy priority. However, the efforts have now been derailed with the latest action by the China’s government.