Payments for Kaliningrad rail transit still possible but more complex

Photo: Pexel. Angelina Zhang.

The Kaliningrad rail transit series has a new episode. The Financial Crimes Investigation Service (FNTT) scrutinised Lithuania’s payment possibilities with Russian and Belarusian entities, concluding that “each case for mutual services and incoming or outgoing payments” will be examined individually by Lithuanian Railways following the EU sanctions. This means that rail transit between Russia and its exclave can continue with the possibility of facing some challenges.

After resuming traffic on 22 July, Lithuania faced the challenge of receiving payments from Russian and Belarusian entities. Lithuanian banks had stopped handling payments from Russian and Belarusian entities for quite some time, and the only remaining bank that could process payments was Šiaulių bankas.

However, this bank declared that it would also stop making payments as of 1 September, excepting only humanitarian services and services that ensure the state’s functions. Additionally, as the Lithuanian national radio and television LRT reported, the bank would look into each situation case-by-case, just like LTG.

No possibility of blanket payments

What was possible until recently for LTG does not apply anymore. That being said, the company cannot proceed with blanket payments for incoming or outgoing services. The term blanket payment refers to general payments that could take place for a group of different services by one company.

Say, for example, a Russian operator wanted to launch three different services transiting through Lithuania to Kaliningrad. In the past, it was possible to pay for those services at once. However, this is not the case anymore since LTG would need to examine the three services and their payments separately, assess whether they comply with EU sanctions and then proceed with the payments.

“FNTT indicates that upon submission of requests for permission to perform incoming/outgoing payments for mutual services from/to Russian railways and Belarusian railways, LTG will examine and make a decision on granting such authorisation in accordance with the procedure established by legal acts after assessing the individual factual circumstances of each request. This means that each case will first be examined by the LTG Group in accordance with the sanctions applied by the EU and the interpretations of the responsible Lithuanian institutions,” clarified LTG.

Individual assessment and challenges

As a result, LTG will assess each case individually, and Šiaulių bankas will follow the same process to ensure the avoidance of any legal loopholes. This is, without question, a more time-consuming process compared to how things were before. Moreover, it is a more complex and scrutinising process that could exclude some cargo types or services from transiting. “I wouldn’t rule out that certain entities may face challenges,” commented on his country’s media a couple of days ago Marius Skuodis, the Lithuanian transport minister.

Yet, this is the only way to keep Kaliningrad transit going as smoothly as possible despite the possible hurdles ahead. “On its part, the government has done practically everything it could, and as far as I know, payments should proceed,” concluded Skuodis with LRT.

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Author: Nikos Papatolios

Nikos Papatolios is editor of RailFreight.com, the online magazine for rail freight professionals.

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