Suspicious investors are looking at Lithuania: which red lines will we not allow to cross?

On Wednesday, the Seimas National Security and Defense Committee (NSGC) discussed the issue of investments in strategic sectors in Lithuania and the development of economic relations with third countries.

It focuses on several countries.

According to Darius Jauniškis, the director of the SSD who participated in the NSGC meeting in Seimas, there are suspicious wishes to invest in strategic sectors.

However, its upward trend is not yet observed.

The most sensitive sectors, according to the head of security, energy, cybernetics, economy, infrastructure.

“I would say that these are the key sectors that we should focus on,” he said.

Threat prevention in this area is mainly focused on several countries: Russia and China.

Threat prevention in this area is mainly focused on several countries: Russia and China.

According to D. Jauniškis, the department monitors all threats and works closely with the Government through the Coordinating Commission for the Protection of Important Objects to Guarantee National Security.

“In principle, Lithuania has created mechanisms to prevent these negative investments from reaching us.” In my deep conviction, the situation is under control, the information is constantly provided and Lithuania is safe at the moment, ”he said.

In my deep conviction, the situation is under control, information is constantly being provided and Lithuania is safe at the moment.

D. Jauniškis stated that the pandemic and the coronavirus quarantine affected all countries. If this has boosted investment, according to the SSD chief, we should see it.

“Because I think the real consequences of this pandemic and the impact it will have on the world will probably only become clear in the fall.” And that there was an inactive period, that is a fact here, without a doubt. I think some countries have exploited the pandemic to their advantage, especially in the information space. I think it is no secret to anyone here, many people in the media write about it. I can’t tell you anything special right now, because there are probably downward trends right now, “he said.

D. Jauniškis said it was obvious that China had tried to improve its image in the world by providing the so-called mask policy, by supporting the host countries.

“In Lithuania, we haven’t seen a lot of problems with that. There were some, but it had no effect,” he said. The SSD director did not specify what the evidence was and said it was confidential information.

The situation is manageable.

According to Dainius Gaižauskas, President of Seimas NSGK, the committee was interested in how the SSD, our military intelligence, the Government, the Ministry of Foreign Affairs see certain processes, intentions to invest in our strategic and critical projects, how to assess risks, coordinate the exchange of information and the like.

“We have received all the information.” The situation is really manageable, the forecasts are clear enough and we are ready to react to one situation or another to protect our national security interests, “he said.

D.Gaižauskas pointed out that in Lithuania, as in any country of the European Union (EU), certain processes are taking place.

“And China is really seeing its own positions. However, we assess the situation and we really do have certain red lines that we will not cross and we certainly will not allow other states to cross, which could affect our national security in one way or another, ”said the president of the Seimas NSGK.

We appreciate the situation and we certainly have certain red lines that we will not cross and we will certainly not allow other states to cross.

The red lines, as clarified by D. Gaižauskas, are due to certain objects and strategic areas: energy, cybersecurity, digital technologies, ports and the like.

A black and white list is needed

Laurynas Kasčiūnas, vice president of Seimas NSGK, explained that the western world is seriously discussing how much China should participate in the strategic economies and industries of their countries.

Especially when it comes to strategic objects.

“Strategic objects are defined in our Strategic Companies Law. Naturally, first of all it is, of course, infrastructure, technology. Here we are also talking about the port. Clearly, a 5G connection that will change our technological life will take it to the next level. But in order for us to progress, we must also manage the potential risks, “he said.

According to L. Kasčiūnas, it is no secret that Chinese companies are very interested in implementing the 5G connection in western countries. Also in Lithuania.

“And here we have to clearly establish the formula of what a red line is, where it is possible to manage risks and where we only need to draw a red line and say very clearly that there are reliable suppliers and unreliable suppliers.” There is a black list, there is a white list. This is a problematic field here that will inevitably affect us for years to come. And for that we will have to have a clear strategy ”, says the vice president of Seimas NSGK.

According to L. Kasčiūnas, the perception of the problems is that the state’s resilience is quite good.

“Clearly, those institutions that are more business-oriented, for example, may have a more liberal approach. But institutions dealing with national security are aware of all the risks. But even in this area, we have not done something, “he said.

Clearly, those institutions that are more business-oriented, for example, may have a more liberal approach. But institutions dealing with national security are aware of all the risks.

Seimas NSGK Vice President said the unfinished work was related to 5G communication and cyber security.

He mentioned that Lithuania, like many European countries, received an offer from the United States to sign a declaration on the secure supply of 5G, as well as to commit to diplomatic information flows “traveling” only through very secure channels.

Latvia, Estonia and Poland are said to have signed such a declaration with the United States.

“We have not yet signed such a statement. And we are not equally involved in the Mike Pompe initiative I mentioned. I asked for it to be done, or to say the reasons why it was not done,” explained L. Kasčiūnas.

Russian and Chinese interests

The assessment of national security threats prepared by the SSD and the Second Department of Operational Services (AOTD) of the Ministry of National Defense indicates that in 2019 Russian companies in the energy sector actively sought to maintain and strengthen their positions in the Baltic market, interested in strategic projects in the Lithuanian energy sector.

For example, since the beginning of 2019, the Russian company Novatek has been trying to enter the Lithuanian liquefied natural gas (LNG) market, after having started operating the Vysock natural gas liquefaction terminal together with Gazprombank.

The document prepared by the Lithuanian security services states that in 2019 Gazprom avoided direct influence or aggressive measures, but strengthened its activities through loyal intermediaries, entrepreneurs with connections to this gas giant, who participate in gas trading schemes. Gazprom through companies registered in Lithuania and abroad.

These intermediaries receive Gazprom privileges and therefore can gain a competitive advantage. Hoping for even more favorable conditions, they are rewarding Gazprom’s loyalty: coordinating its activities with Russian representatives, providing up-to-date information on changes in the Baltic gas market.

The assessment of national security threats states that in 2019 the Russian energy group Inter RAO UES also sought to strengthen its position in the Baltic States.

It is claimed that it is important for him not only to survive in the commercial electricity markets, but also to influence decisions on the strategically important project of synchronization of the Baltic electricity systems with continental European networks.

The National Security Threat Assessment presented by the SSD and AOTD this year also highlights that China is expanding its influence worldwide, ensuring the economic leverage of other countries on important political issues for Beijing.

“The search for technological advantages in China and the active penetration of investment increase the vulnerability of other countries and the risk of losing control of the infrastructure,” says the document.

The search for technological advantages in China and the active penetration of investment increase the vulnerability of other countries and the risk of losing control of the infrastructure.

Trying to avoid restrictions

The National Security Threat Assessment prepared by the SSD and AOTD notes that investors who do not comply with national security interests try to avoid the restrictions placed on them.

Shareholders of investors in strategic sectors of the economy, whose threatening relationships have led to negative decisions, are reportedly withdrawing but are trying to maintain influence over the companies’ operations.

The Law on Protection of Objects Important to Guarantee the National Security of the Republic of Lithuania establishes criteria according to which the conformity of investors with the interests of national security is assessed.

“In 2019, the largest flow of potential investors was made up of people seeking to invest in the financial and credit sector. Investors from third countries have shown increasing interest in creating financial technology, payments and electronic money companies, ”said the National Security Threat Assessment.

Investors from third countries have shown increasing interest in setting up financial technology, payments and electronic money companies.

According to a report by the SSD and AOTD, it emerged that a significant number of third-country nationals seeking to invest in the financial and credit sectors had simply verified their options and the “safeguards” applied to foreign investment.

Some investors abandoned their investment plans immediately upon learning of their compliance with national security interests or after a negative decision by the Coordinating Commission for the Protection of Important Objects for National Security.

Investors are generally declared incompatible with national security interests in accordance with the criteria specified in the Law on Protection of Important Objects to Ensure National Security of the Republic of Lithuania, when risky relationships are established with third-country institutions .

The reasons for this criterion are considered irrevocable.