Lithuania Cracks Down on Sanction Evasion Schemes after OCCRP Investigation

Published: 02 March 2023

Klaipeda Port LithuaniaA shipment of urea spotted by Lithuanian reporters in the port city of Klaipeda. (Photo: Martynas Vainorius / Atvira Klaipeda)

By Šarūnas Černiauskas

Lithuania seized Belarusian fertilizers worth millions of euros and tightened its control measures along the border after two OCCRP member centers exposed a blunt but efficient scheme that saw sanctioned companies export their products to the EU.

The investigation, conducted by Siena (Lithuania) and Belarusian Investigative Center (Belarus), exposed how the EU sanctions against Grodno Azot – one of Belarus’ largest fertilizer manufacturers - have been evaded.

Soon after, Lithuanian authorities conducted massive raids of companies presumed to be involved in the scheme, froze thousands of tonnes of Belarusian fertilizers and moved to close the gaping hole on the Baltic country’s eastern border.

Just Change the Name

The EU has put Grodno Azot, a Belarusian state-owned company and the only producer of urea in the country, under sanctions in 2021. But it did not ban Belarussian urea itself from being imported into the union. Actors from at least three countries quickly used that fact and changed the name of the producer in the cargo documents.

Realizing this, Belarusian activists in Lithuania put up recently a roadblock on a border checkpoint with Belarus to stop two lorries that had previously carried Belarusian urea, reportedly headed to Serbia, through Lithuania.

A reporter for the Belarusian Investigative Center interviewed the Serbian truck driver at the scene and he immediately confirmed that the urea came from Grodno Azot.

Lithuanian customs launched a criminal investigation into suspected breach of sanctions.

The initial checks on the border produced no results because Grodno Azot was not mentioned in the paperwork of the checked shipments. Instead, the documents showed a recently founded company called Grikom, owned by a government official in Grodno, the hometown of Grodno Azot.

Meanwhile, Siena followed another lead.

Data obtained by Lithuanian journalists showed that thousands of tonnes of Belarusian urea were allowed into the country on trains that were headed to the port city of Klaipeda. The destination, according to the documents, was a company called Biriu Kroviniu Terminalas (BKT).

The company operates a large terminal in Klaipeda and specializes in fertilizers. Up until 2022, it was moving thousands of tonnes in potash fertilizers – the principal export of Belaruskali, another sanctioned fertilizer company in Belarus. Belaruskali owns 30% of BKT.

Siena asked colleagues from an independent outlet called Atvira Klaipeda to visit BKT. The reporters found multiple Belarusian railway cars filled with fertilizer at the site.

Similarly to the case of the two lorries, Grodno Azot’s name was nowhere to be seen in the documents. Trains loaded with Belarusian urea crossed the EU’s eastern border thanks to shipping papers in the name of another Belarusian company called Technospectrading.

The firm used to trade agricultural machinery and according to open source research conducted by BIC, Technospectrading has no urea production facilities.

Lithuanian Customs later said that the shipment spotted at BKT‘s yard was indeed Belarusian urea and that it was seized as part of a criminal investigation launched in January. The value of the cargo was estimated at two million euros.

Raids and Tightened Measures

Officers also raided several Lithuanian companies, including BKT, and arrested a number of suspects of sanctions breach and smuggling.

Lithuanian Railways announced that its staff also seized a shipment of Belarusian urea worth 327,000 euro, found in 15 railway cars.

In response to Siena’s and BIC’s investigation, the company announced it is tightening control measures for both Belarusian fertilizers and other shipments crossing the EU’s eastern border.

Last but not least, Lithuania’s Ministry of Foreign Affairs and Ministry of Transportation confirmed they will seek to expand the EU sanctions to include Belarusian urea and the government is considering a ban of all railway shipments from Belarus and Russia.

“I’d like there to be no shipments that could cause any reputational risk to both the company [Lithuanian Railways] and Lithuania,” Minister of Transportation Marius Skuodis said on Thursday, adding that the decision can be made by the railway company.