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Putin Ends Lithuania Border Curbs as EU Readies Complaint to WTO

Oct. 9 (Bloomberg) -- President Vladimir Putin ended tighter border checks on Lithuanian cargoes and vehicles that the European Union’s top trade official yesterday called a potential violation of World Trade Organization rules.

Lithuania, which now holds the EU’s rotating presidency, said Russian customs posts on Sept. 11 began subjecting its goods to full unloading and physical inspections, disrupting shipments to the Baltic nation’s biggest export destination.

Putin today ordered Russia’s Federal Customs Service to end the special controls and return to normal border procedures tomorrow, the Moscow-based customs office said on its website. Customs violations by Lithuanian exporters that prompted the measures have now diminished, the office said.

EU Trade Commissioner Karel De Gucht told the European Parliament in Strasbourg yesterday the EU would ask the WTO this month to assess Russia’s “inappropriate” actions against Lithuania. Plans to strengthen EU trade ties with Ukraine and other ex-Soviet countries at a November summit in Lithuania probably are the real reason for Russia’s actions, Lithuanian Prime Minister Algirdas Butkevicius said.

Dairy Ban

De Gucht also urged Russia to explain its decision this week to ban all dairy imports from Lithuania based on what it said were safety concerns. The EU “has confidence in the safety of Lithuanian dairy products,” he said.

Lithuanian dairy companies halted shipments to Russia after the trade suspension was announced on Oct. 7. Shares of AB Pieno Zvaigzdes and AB Rokiskio Suris, the two biggest, are down 2.9 percent and 3.1 percent, respectively, in Vilnius this week. AB Zemaitijos Pienas is down 3 percent and AB Vilkyskiu Pienine is down 5.8 percent on the Nasdaq OMX Vilnius exchange.

Russia took 19 percent of Lithuanian exports last year, making it the largest trade destination, with almost 85 percent in transit goods, the Baltic nation’s statistics office said.

Lithuanian companies exported 557 million litai ($218 million) of cheese and other dairy products to Russia in 2012, according to data on the office’s website. That was about a fifth of the value of all Lithuania-origin goods exported to Russia.

To contact the reporter on this story: Bryan Bradley in Vilnius at bbradley13@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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