Scandal With Belarusian Potash: Lithuania Is Ready To Stop Transit
- 29.12.2021, 14:32
The country has the political will to make such a decision.
The scandal over the transit of Belarusian potash, which continues through the territory of Lithuania despite the U.S. sanctions against Belaruskali, has not subsided in Lithuania for several weeks. The situation almost resulted in the resignation of the Lithuanian government, as a couple of months ago, Lithuanian politicians said loudly that the transit would be stopped on December 8, reports dw.com.
Now, Prime Minister Ingrida Shimonite says that the government has no intention to stop the transit of Belarusian potash "at any cost" and is looking for a solution that would protect the reputation of the Lithuanian railroad (LZD) and prevent financial losses to Lithuania.
What is the essence of the scandal with the transit of Belarusian potash?
The problem with the transit of Belarusian potash through Lithuania was caused by the U.S. sanctions against Belaruskali, adopted in August. Unlike the European sanctions, they apply to all products of the company. Fearing the mechanism of "secondary sanctions" by the U.S., the Lithuanian authorities said they would stop the transit of potash from December 8, 2021.
An important nuance with the sanctions is related to the fact that Belaruskali does not sell potash itself, but through the Belarusian Potash Company (BPC) and is one of its shareholders. Since Belaruskali owns only 48% stake in BPC, it is likely that initially BPC was not affected by sanctions. But on December 2, the U.S. imposed separate sanctions against BPC, which are going to come into force in early April 2022. It turns out that it wasn't clear at first whether the sanctions against Belaruskali would apply to BPC (but they will obviously be applied after April 2022 - Ed.), but the Lithuanian government had time to make political statements.
The fact that potash is still passing through Lithuania caused a scandal - Minister of Transport Marius Skuodis and Foreign Minister Gabrielius Landsbergis wanted to resign from their positions, but the government managed to avoid resigning. However, dismissals came into the picture - in January, Mantas Bartuska, head of LZD, will resign. As it turned out, back in October, LZD and Belaruskali made amendments to the contract, allowing the Belarusian side to pay for deliveries for the next few months - according to Lithuanian media reports, the amount of 10 million euros is involved. That is what prevented Lithuania from terminating the contract unilaterally. LZD even tried to return the advance payment, but Belarusian banks did not accept it.
Lithuania has the political will to stop transit
Pavel Slyunkin, an analyst of the European Council on Foreign Relations (ECFR) and former diplomat who used to work at the embassy in Lithuania, says that although loud statements were made by Lithuania, no real preparation to stop the transit was made. "LZD had a strong interest in keeping the partnership, which is why they made changes to the contract, which Lithuania cannot terminate without financial damage. This has affected the reputation of the country, and now politicians are looking for an option to terminate the transit without damage and violation of the contract," says the analyst.
That option could be the recognition of the contract with Belaruskali as one that threatens the country's national security. On December 21, the government commission made such a decision, and now the government has the last word - in this case, it could be the basis for stopping transit with minimal losses.
Lithuanian political analyst Vitis Jurkonis believes that politics has jumped ahead of the technical implementation of sanctions. "This is a problem not only in Lithuania, but all over Europe, besides, a lot of companies are trying to skirt the sanctions and then the mechanism is not complied with. I don't think it's easy to stop transit in one day, but I'm sure there is a political will to do so, and the government needs to work hard to enforce these sanctions."