Lithuanian Railways (LTG) said on September 3 it received advance payments for 2.5-million-euro-worth of Russian transit freight shipments to and from Kaliningrad, meaning that it would continue to transport goods to and from the exclave for around three weeks.
Further transit shipments between mainland Russia and its Kaliningrad region will depend on whether LTG’s customers can find payment solutions and whether banks agree to process their payments, according to Egidijus Lazauskas, CEO of the state-owned railway group.
Lazauskas does not rule out that transit shipments might stop before freight quotas have been used up if forwarders fail to find a way to legally pay LTG, that is, to transfer the money to a Lithuanian bank.
“Yes, this can happen, but we are not going to tear our shirts off because of that,” he told reporters. “That transit is profitable, but we made a strategic decision to sever relations with the Eastern market within a few years and are actively looking for alternatives.”
In an effort to solve the issue of payment for Russian freight, the company has approached all Lithuanian banks and has tried to open an account in another EU country, according to the CEO.
“Unfortunately, the response from the European banks was diplomatic but disappointing: we are no longer opening new accounts for such transfers,” he said, adding that LTG was “still waiting for a reply from the banks operating in Lithuania”.
Swedbank, Medicinos Bankas, Siauliu Bankas and Luminor have said that they will not process payments for the transit of sanctioned Russian or Belarusian goods, but the latter two banks do not rule out making exceptions.
LTG resumed the transit of sanctioned goods between mainland Russia and Kaliningrad on July 22 after the European Commission said in its updated guidance that a limited amount of cargo can be transported by rail via Lithuania.
Quotas for rail transit volumes have been set according to the averages of the last three years, enough to cover Kaliningrad’s needs.
According to LTG, this year’s average is 3.1 million tons, including 1.07 million tons of coal, 590,000 tons of ferrous metals, 60,000 tons of timber and wood products, 260,000 tons of cement, 60,000 tons of food, feed, beverages and tobacco products, 980,000 tons of oil and oil products, and 80,000 tons of other types of goods.
Quotas for the some of the goods have already been used up, according to LTG.
A total of 5.6 million tons of freight were transported between mainland Russia and the Kaliningrad exclave via Lithuania last year, according to the railway operator. (LRT/Business World Magazine)