Date: 8 November 2022 Author: Finn-Ole Albers, supervisor: Kacper Gatlik

The European Commission’s Guidelines regarding transit through Lithuania

On July 13, the Commission published new guidelines for the transit of Russian goods through Lithuania, allowing the transit of goods like steel and iron by train to Kaliningrad. The Commission’s point of view doesn’t seem to be randomly chosen, given the existing legal provisions. On a political level, however, the disagreement over the issue may have weakened Western unity against Russia.

SOURCE: Flickr

From June 17 to July 26, Lithuania restricted freight train traffic running from Belarus to Kaliningrad over its territory.[1] Foreign minister Gabrielius Landsbergis justified the decision by claiming that Lithuania was just following the EU sanctions. In a statement on June 20, he further explained that it was not a total blockade of traffic to Kaliningrad. The restrictions just would apply to goods that were on the EU’s sanction list, in total just half of all the shipped goods.[2]

Lithuania blocked the transit of steel and iron products on June 17, as these sanctions entered into force on that date. Later on July 10, this was extended to the transit of cement, alcohol and other goods.[3] After the Guidelines were published, the Lithuanian government announced it would follow them and on July 26 the first freight train transited through Lithuania again.

EU sanctions starting in 2014

To discuss the validity of the positions of Lithuania and the Commission, it is important to look at the referred sanctions and at the legal framework for the adoption and implementation of sanctions.

After the annexation of Crimea and Russia’s covered invasion of the Donbas, the EU reacted with asset freezes and travel bans against responsible persons. Furthermore, there were import bans imposed against goods from Crimea.

The first direct economic sanctions against Russia were imposed by the Council Regulation No. 833/2014 on July 31, 2014, which since then have been amended by additional packages until today.[4] They comprised restrictions on the trade of bonds with some Russian banks, an arms embargo and an embargo against some dual-use goods.

The sanctions targeting persons and trade with Crimea and the Donbas were laid down in other regulations.[5]

The adoption of sanctions

According to Article 29 Treaty on European Union (TEU) and Article 215 Treaty on the Functioning of the European Union (TFEU), the Council has the right to impose economic sanctions against third countries.[6]

As the so-called “restrictive measures” are part of the Common Foreign and Security Policy (CFSP), a unanimous decision is required by the Council, who consists of the Foreign Ministers of each Member State. If this unanimous Council Decision is taken, the High Representative of the EU and the Commission present a proposal for a Council Regulation, outlaying the precise scope of measures for the implementation of the sanctions. The adoption of the final Regulation is decided by a qualified majority, as Article 215 TFEU rules.

Both the Decision and the Regulation are then published in the Official Journal of the European Union and thereby enter into force as legal acts. The regulations apply “automatically and uniformly” to all Member States.[7]

Implementation: The guidance of the Commission

The application of the sanctions lies in the responsibility of the Member States. In a FAQ from February 26 the Commission explains that as a guardian of the treaties it oversees the uniform application of the sanctions: “To this end, it may issue opinions to the competent authorities of the Member States on the interpretation of specific provisions of the relevant legal acts, or provide guidance on their implementation.”

In its “better regulation guidelines” the Commission claims that it has a right to issue guidelines under Article 292 TFEU – referring to the Commission’s power to issue recommendations.[8]

In his paper, Prof. Jürgen Schwarze notes that under Article 288 TFEU recommendations are not binding. So guidelines are part of the EU’s soft law. However, he cites several judgements from the Court of Justice of the European Union (CJEU) who call recommendations not completely ineffective and which rule that under specific circumstances they could even have legal effect.[9]

Under article 258 TFEU the Commission has the right to bring a matter before the CJEU if a Member State fails to fulfil its obligations under the treaties.

So if Lithuania had ignored the European Commission’s guidelines on the implementation of sanctions, the issue could had been escalated in an infringement procedure before the CJEU and special attention might had been given to the Commission’s position.

Who is right: Lithuania or the Commission?

As it was said in the beginning, Lithuanian restrictions on the freight train traffic targeted the transport of iron and steel products as well as cement, alcohols and other goods. These materials occur in Article 3 in the consolidated version of the Regulation No. 833/2014 from June 4.[10]

Article 3 g) rules that it is prohibited to import and transport iron and steel products (para. 1a and 1c). Article 3 i) rules that it is “prohibited to purchase, import or transfer” goods such as cement and alcoholic products, listed under Annex XXI.

The articles of the regulation confirm the Lithuanian claims, that the restrictions of Article 3 g) and 3 i) apply from June 17 and July 10. The articles prohibit the transport, the import and the transfer of the goods, but they don’t issue the transit of goods.

The issue of transit is however mentioned in Article 3 l): Road transport established in Russia, including transit, is prohibited (para. 1). But it does not apply to the transit between Kaliningrad Oblast and Russia, as long as no sanctioned goods are transported (para. 2).

So as this is the only section that regulates transit, one can argue that all other forms of transit –  including the transit of sanctioned goods by train – don’t fall under the prohibitions and are allowed.

In its Guidelines, the European Commission refers to Article 3 l) when saying that transit by rail should be allowed.[11] The Member States should check whether the transit volumes remain in the averages of the last 3 years to avoid circumvention of the sanctions. All in all, the Commission’s point of view therefore seems valid and not randomly chosen.

Other possibilities

While the current sanctions may not provide the cause to stop transit, there would exist other possibilities by international law to do so:

The Commission mentions Article 19 and Article 99 of the EU-Russia Agreement on Partnership and Cooperation (PCA): Article 19 rules that on grounds of public security transit can be restricted and prohibited. Article 99 rules that nothing shall prevent a Party from measures to protect its security interests. Beyond, Article 21 of the General Agreement on Tariffs and Trade (GATT) also provides the possibility to restrict the trade of goods due to security interests.

However, in the Guidelines the Commission also refers to Article V GATT and Article 12 PCA who established “a general principle of freedom of transit.” These principles still seem to have priority for the Commission.

The difficult situation for Lithuania is that transit between Russia and Kaliningrad is regulated by again a Council Regulation from 2003 (No 693/2003), which established the facilitated conditions for Russian transit that last until today.[12]

There seems to be little room for Lithuania to act unilaterally on the issue of transit as further economic sanctions require the approval of all other Member States and a withdrawal from the 2003 transit regime is also a matter of the EU.

Diverging opinions

At the NATO summit German Chancellor Olaf Scholz said that he wants to uphold the transit regime in order to “establish a de-escalation dynamic”.[13] This position met disagreement from the Lithuanian Government. Officials blamed the German government for putting pressure on the Commission and letting themselves being intimated by Russia, according to a SPIEGEL-report. Furthermore, they claimed that just in April the Commission assured Lithuania that the imposed sanctions would also apply to transit.[14]

[1] LRT: First Russian train with sanctioned goods reaches Lithuanian border as Kaliningrad transit resumes, in:  https://www.lrt.lt/en/news-in-english/19/1746506/first-russian-train-with-sanctioned-goods-reaches-lithuanian-border-as-kaliningrad-transit-resumes

[2] https://www.youtube.com/watch?v=nKex3ZPHsJg

[3] LRT: Additional sanctions on Kaliningrad transit come into force, in: https://www.lrt.lt/en/news-in-english/19/1736225/lithuanian-customs-additional-sanctions-on-kaliningrad-transit-come-into-force

[4] EUR-Lex: Consolidated text: Council Regulation (EU) No 833/2014 of 31 July 2014, in: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0833-20220604

[5] EUR-Lex: EU restrictive measures in view of Russia’s invasion of Ukraine, in: https://eur-lex.europa.eu/EN/legal-content/summary/eu-restrictive-measures-in-view-of-russia-s-invasion-of-ukraine.html

[6] EUR-Lex: General Framework for EU Sanctions, in: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=legissum:25_1

[7] European Commission: Types of EU law, in: https://ec.europa.eu/info/law/law-making-process/types-eu-law_en

[8] European Commission: Better regulation toolbox, Tool #41, page 349, in: https://ec.europa.eu/info/law/law-making-process/planning-and-proposing-law/better-regulation-why-and-how/better-regulation-guidelines-and-toolbox/better-regulation-toolbox-0_en

[9] Schwarze, Jürgen: Soft Law im Recht der Europäischen Union, page 7, in: https://www.nk.nomos.de/fileadmin/eur/doc/Aufsatz_EuR_11_01.pdf

[10] EUR-Lex: Consolidated text from June 4, 2022, in: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0833-20220604

[11] European Commission: Guidance to EU Member States, in: https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-export-import-guidance_en_0.pdf

[12] EUR-Lex: Report from the Commission, in: https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52006DC0840&from=FR

[13] Tagesschau.de: Scholz wants de-escalation in Kaliningrad transit, in: https://www.tagesschau.de/ausland/europa/nato-scholz-stoltenberg-101.html

[14] Spiegel.de: Brussels and Berlin want to end the transit ban to Kaliningrad, in: https://www.spiegel.de/ausland/bruessel-und-berlin-wollen-transitverbot-nach-kaliningrad-beenden-a-4b6663c0-4a99-4eed-aa63-cbaacbfb610b

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