ISTANBUL

China announced on Wednesday that it banned Chinese organizations and individuals from dealing with two EU banks in retaliation for a previous EU decision to sanction two Chinese banks.

"In order to counter the EU sanctions on two Chinese financial institutions, with the approval of the National Counter-Foreign Sanctions Coordination Mechanism, we hereby publish the 'Decision on Taking Countermeasures against Two EU Financial Institutions,' which will come into effect on August 13, 2025," the Chinese Commerce Ministry said in a statement.

The EU banks included the Lithuanian institutions UAB Urbo Bankas and AB Mano Bankas.

The measure, taking effect immediately, will prohibit Chinese organizations and individuals from dealing in any transactions, cooperation, or other activities with the two banks.

Last month, the EU sanctioned two Chinese banks as part of its latest anti-Russian measures.

The Chinese banks have been accused of facilitating the transfer of digital assets that violate EU regulations in a "significantly frustrating" manner. In response, Beijing has urged the bloc to "immediately cease its wrong practice."

Despite constant communication, China-EU relations have been tense in recent years.

The EU has accused China of exporting excess industrial capacity and purposefully oversupplying its markets with subsidized goods, particularly in tentpole industries such as electric vehicles. According to Brussels, this practice distorts trade and puts local companies at risk.