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Cablegate: Russia Hits Lithuanian Trucking

VZCZCXRO2725
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSL RUEHSR
DE RUEHVL #0436/01 2261434
ZNR UUUUU ZZH
R 141434Z AUG 09
FM AMEMBASSY VILNIUS
TO RUEHC/SECSTATE WASHDC 3680
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHMO/AMEMBASSY MOSCOW 2708

UNCLAS SECTION 01 OF 02 VILNIUS 000436

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ETRD ECON LH RS
SUBJECT: RUSSIA HITS LITHUANIAN TRUCKING

SUMMARY
-------

1. (SBU) On August 3, Russian customs officials began giving
additional attention to Lithuanian trucking firms' transport
documentation, including Transports Internationaux Routiers
(TIR) carnets, at Russia-Latvia border posts. As part of
this effort, Russian customs officials required that trucks
registered in Lithuania be placed in a separate line at those
border posts. Difficulties have been experienced by
Lithuanian trucks attempting to enter Russia from Belarus and
Estonia as well. The result has been queues of many
kilometers and drivers waiting days to enter Russia with
their goods. Lithuanian and Russian customs officials
reached an agreement on August 13 that will restrict the
operation of 29 Lithuanian trucking firms whose predominant
market is Russia, but, hopefully, allow less onerous access
for other Lithuanian firms. Nonetheless, Lithuanian trucking
firms appear to have suffered significant economic damage.

KEEP CALM BUT ASK WHY
---------------------

2. (SBU) Gytis Vincevicius, Head of Communications for the
Lithuanian Carriers Association (Linava) told us that Russian
customs was justifying its actions based upon 16 truck
voyages out of a total of 51,150 in the first half of 2009.
Vincevicius said that Russian Customs contacted its
Lithuanian counterpart on or about July 24 to request
additional information regarding the 16 truck voyages in
question. On 3 August, Linava began to receive reports that
Lithuanian trucks were experiencing additional delays at the
Latvia-Russia border. On August 5, according to Vincevicius,
Lithuanian Customs received a written explanation from its
Russian counterpart describing why Lithuanian trucks had been
targeted for additional inspection. This was followed by
additional reports of delays in Belarus and Estonia.

ECONOMIC MOTIVATIONS?
---------------------

3. (SBU) The Acting Head of Lithuanian customs met with his
Russian counterpart in Moscow this week and on August 13
signed a protocol restricting the operation of 29 Lithuanian
trucking firms into Russia. These firms are predominantly
oriented to the Russian market. Vincevicius said that of
Linava's 900 members approximately 700 operate shipping
routes to Russia. He estimated that of the approximate
20,000 strong Linava member shipping fleet, 10,000 trucks are
used by firms that ship to Russia. Of these 10,000 trucks,
Andrius Kalindra, a Counselor in the MFA's Economic Security
Policy Department, told us that approximately 1,400 trucks
are operated by the 29 firms mentioned in the protocol.

4. (SBU) The signing of the protocol does not mean problems
have ended for Lithuanian carriers, according to Vincevicius.
He told us that the Russian Transport Ministry recently
annulled the validity of second and third country transport
authorizations previously issued to Lithuanian shipping
firms. Vincevicius estimated that this action, combined with
reports of difficulty experienced by Lithuanian carriers in
Russia, has resulted in the loss of contracts with Western
customers shipping to Russia for approximately 200 Lithuanian
trucking companies.

5. (SBU) Kalindra said transport accounts for 45 percent of
the Lithuanian service sector. Interlocutors have told us
that 60 percent of Lithuania's GDP is tied to exports, with
Russia being Lithuania's top trade partner when measured on
an individual country basis. Russian trade is responsible for
approximately 20 percent of Lithuania's trade turnover
(imports exports).

6. (SBU) Vincevicius speculated that Russian motivations
are solely economic. He said the Russian truck fleet is
roughly the same size as that of Lithuania and the 29 firms
involved have Russian subsidiaries. Thus, if pressured,
these firms might be forced to increase the size of their
Russian operations. Vincevicius added that the head of the
Russian equivalent of Linava, Asmap's Moskvichev, previously
held a position in Russia's Transport Ministry.

COMMENT
-------

7. (SBU) While this latest Lithuanian-Russian crisis appears
to be resolved, we expect continued speculation regarding
Russia's motivation in cracking down on Lithuanian trucks
seeking entry into Russia. Despite Vincevicius's assertion
that Russian transport interests are behind the crisis, many
in Lithuania point to political reasons for the crackdown on

VILNIUS 00000436 002 OF 002


Lithuanian trucks. Some have linked the Russian action to
Lithuania's decision in late July to refuse entry to Modest
Kolerov, a former aide to Russian Prime Minister Putin (news
reports indicated that Russia subsequently had threatened
retaliation). Still others have speculated that Russia was
testing the new Lithuanian president, Dalia Grybauskaite;
however, Grybauskaite downplayed the possible political angle
of Russian customs officials, calling for the issue to be
resolved at the technical level. In a conversation with
Charge on August 14, Lithuanian independence leader Vytautas
Landsbergis (now a member of the European Parliament)
affirmed his belief that Russia's action was essentially
political, though he noted that corruption within the
Lithuanian trucking sector made it an easy target for Russia.
Landsbergis also suggested that the first anniversary of the
Russian-Georgian conflict, in which Lithuania took a strong
stand in support of Georgia, would also have been a prime
rationale for Russian harassment of Lithuanian trucks.
Whatever the motivation, Russia's actions against Lithuanian
transport companies, as well as Russia's ban on various
Lithuanian dairy products due to traces of antibiotics, has
increased Lithuania's economic pain during a time of severe
economic contraction.

LEADER

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