Lithuanian railways are looking for a way to block the transit of potash fertilizers by rail through the territory of Lithuania.

This is reported by the railway magazine Railway Supply.  Thus, Lithuania wants to block the transportation of one of the largest state-owned companies in Belarus.

The situation at the border is constantly tense. Recently, the Lithuanian carrier announced a tender for the installation of a scanner for scanning trains on the border with Belarus.

“Neither the European Union nor the US sanctions against Belarusian companies are effective enough, they do not impede the transit of Belaruskali fertilizers, since EU sanctions apply only to new contracts concluded after June 25, 2021,” the Lithuanian Railway reports.

Belaruskali is one of the largest Belarusian state-owned companies, and at the same time one of the largest producers of potash fertilizers in the world.

“This is the first time Lithuania has faced international sanctions for such large financial contracts. Therefore, their implementation requires additional time. We examined possible options and proposed solutions to achieve the goals of the sanctions. We believe that due to the joint concentration, there will be a legal way to stop the transit of Belaruskali fertilizers through Lithuania, ”says Mantas Bartushka, General Director of Lithuanian Railways.

The agreement between LTG and Belaruskali provides for the possibility of termination, but with a 12-month notice. Otherwise, the other party may demand appropriate compensation, which, according to LTG, could even lead to the bankruptcy of the Lithuanian carrier.

An alternative solution was adopted, which involves the participation of the Lithuanian government, which will adopt a legal act, according to which LTG will be protected from legal consequences in the event of a breach of the contract.

LTG Cargo is currently transporting fertilizers according to a contract. Note that on December 8 Belaruskali voluntarily paid for transport services for a period of 3 months in advance.

The deadline is not accidental, as the United States has made it clear regarding the sanctions against Belarusian companies – anyone who continues to trade with Belarusian companies after December 8, 2021 will lose access to the American market.

According to LTG Cargo, the carrier has repeatedly tried to return the money paid, but the Russian bank serving Belaruskali rejects the transactions. Therefore, LTG is looking for a solution to return the advance to the Belarusian company.

Experts almost unanimously believe that any bank operating in Lithuania, even if it is not directly related to the United States, will not finance the Belaruskali transaction, primarily because payments in US dollars will be impossible. Moreover, no bank wants to risk its reputation.

However, sources say that the risk of servicing the deal with Belaruskali could be borne by a small bank. It can also be a foreign bank not operating in Lithuania.

Until the return procedure is completed, LTG must comply with the contract and transport the goods. It will probably take about a month. If there is no way to refund the prepayment, they should quickly implement other methods offered by LTG, says LTG Group.

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