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Newsletter 2009 May-June

  • Lithuania

    22-06-2009

    Finance Law

    The amendments to the laws regulating Finance Sector, have been adopted

    As from 4 April 2009 the amendments and supplements to the Law on Markets in Financial Instruments, the Law on Insurance, the Law on Banks and the Law on Collective Investment Undertakings have come into force.

    The amendments and supplements to the laws have been adopted in order to implement the Directive of the European Parliament and of the Council No 2007/44/EC as regards Procedural Rules and Evaluation Criteria for the Prudential Assessment of Acquisitions and Increase of Holdings in the Financial Sector.

    The provisions of the laws effective until now established the criteria, according to which the persons, acquiring the qualifying holdings in a financial brokerage firm, the operator of the regulated market, insurance or reinsurance company, management company or bank, were being evaluated, i.e. person’s reputation, transparency of activities and financial position, legitimacy of the funds of pay for shares, probability of appearance of close links, etc. In pursuance of unification of the criteria for acquisition of holdings and the order of application in different financial sectors the respective amendments have been adopted. The amendments establish that in order to safeguard a reliable and transparent management of the companies of the financial sector, the persons acquiring the qualifying holding shall be evaluated according only to the following criteria: person’s reputation,
    experience, financial reliability, as well as evaluation of the fact whether it will be possible to safeguard effective supervision and whether the acquisition is not related to money laundering and terrorist financing.

    Moreover, the term of evaluation of person’s eligibility and financial reliability of acquisition has been shortened. As from now on a respective supervisory institution shall have to carry out the evaluation within 60 working days with a possibility to extend the term, but only in such cases, if additional information is needed. Until now 3 months term has been established. In pursuance of avoiding a gratuitously long evaluation process, additional documents shall be requested not later than on the fiftieth day of evaluation term and the evaluation term may be stopped for not longer than 20 working days and not more than one time. If a person acquiring qualifying holdings is established or perform his activities in non European Union member state or he acts within the European Union but is not supervised, i.e. is not considered as a financial brokerage firm, an operator of the regulated market, a management company of collective investment undertakings, a
    credit institution, an insurance or reinsurance company, the evaluation term shall be extended for not more than 30 working days. By this way it is pursued to accelerate the process of evaluation of person’s eligibility and financial reliability of acquisition.

    Other amendments to the laws have been adopted in order to adjust the inaccuracies, occurred while applying the laws in respective financial sub sectors.

    Law on Financial Institutions has been amended

    As from 4 April 2009 the amendment to the Law on Financial Institutions has come into force.

    By the amendment the list of financial services has been supplemented. As from now on according to the Law not only the receipt of deposits and other repayable funds, financial lease, money transfer, provision of financial assurances and financial guarantees, etc., as it was established until now, but also the storage, accounting and management of financial instruments on costs of the client, including protection of the assets and other related services, such as management of money or financial deposit, shall be considered as financial services.

    The Recommendation of the European Commission on Regime for Remuneration of Directors of Listed Companies has been adopted

    On 29 April 2009 the European Commission has adopted the Recommendation on Regime for Remuneration of Directors of Listed Companies, supplementing the Recommendations 2004/913/EC and 2005/162/EC.

    The previous Recommendation established that the remuneration policy should be determined in the way that the remuneration shall be paid for performance and this should stimulate directors to ensure a long term sustainability of the company. The new Recommendation gives further guidance on determining remuneration policy of directors of listed companies.

    The Recommendation proposes to limit the payment of a variable pay for the director in case of failure. It is recommended to set measurable performance criteria, according to which a variable pay shall be paid or not paid and by this strengthen the link between the performance and pay. It is also recommended to allow the companies to reclaim variable pay paid in case the misstated data about performance have been submitted.

    The Recommendation proposes to the Member States to extend the disclosure requirements concerning the remuneration policy to improve shareholder oversight. Moreover, it is proposed to adopt respective provisions allowing ensuring that institutional investors would participate when solving upon directors’ remuneration policy. Also, the role of remuneration committees should be strengthened.

    The application of Recommendation is not compulsory to the Member States.

    Recommendation of the European Commission on Remuneration in the Financial Services Sector has been adopted

    On 29 April 2009 the European Commission has adopted the Recommendation on Remuneration in the Financial Services Sector.

    The Recommendation proposes to the Member States to ensure that financial
    institutions have remuneration policies for risk-taking staff which would ensure the consistency of remuneration with the effective risk management.

    The Recommendation proposes to the Member States to take certain measures in the area of determination of remuneration policies. First of all, the remuneration should be consistent with and promote sound and effective risk management. Therefore, the payment of core pay and bonuses should be balanced. It is proposed to establish requirements which would ensure the remuneration policy to be transparent and clear and to provide measures to avoid conflicts of interest. It is also recommended to determine remuneration policy by involving persons or departments responsible for staff management and human recourses.

    The application of Recommendation is not compulsory to the Member States.

    Intellectual Property

    The London Protocol of the European Patent Convention has come into force

    As from 11 May 2009 the Agreement on Application of Article 65 of the European Patent Convention (London Protocol) has come into force in Lithuania.

    The London Protocol establishes the reservation of the European Patent Convention – the members of the Convention which have ratified this Protocol undertake not to require the translation of the whole European patent to the national language, if it has been published in one of the official languages of the European Patent Office – English, French or German. Moreover, the Member States of the Convention, whose national language is not the official language of the European Patent Office, undertake not to require the translation of all documents of the European patent, but only the translation of the claim of the European patent.

    The European patent is the patent issued by the European Patent Office following the unified procedure under the European Patent Convention. The applicant may obtain the European patent by filling in the European patent application, which is then examined by the European Patent Office. In Lithuania the applications may be submitted through the State Patent Bureau of the Republic of Lithuania.

    Competition Law

    The amendments and supplements to the Law on Competition have been adopted

    As from 24 April 2009 the amendments and supplements to the Law on Competition have come into force.

    By the amendments the new provision, that the decisions of the Competition Council concerning investigation of infringements of the Law, upon the decision of the Competition Council, may be considered confidential as long as the threat to the course of investigation disappears, has been established. In such way it is pursued to protect data, which is important for investigation, from deliberate destroy.

    As from now on the right of the officers authorised by the Competition Council not only to enter and to check any premises, land and means of transport used by the undertaking, as it was established until now, but also enter and check other premises, land and means of transport, including residential and other premises of heads and employees of the undertaking, if reasonable suspicion arises that in such premises, land or means of transport the documents or any other evidence are stored, which are necessary for investigation and which might have importance when proving serious infringement of provisions of Law on Competition, is established in the Law.

    Moreover, other provisions, related to organisation of work within the Competition Council, are also amended, for instance, the new 6-year-term of the authorisations of the head of the Competition Council has been established. Until now the term of 5 years has been in force. Other amendments have been adopted in order to eliminate inaccuracies and to harmonise the provisions of the Law.

    Social Security

    The Law on Sickness and Maternity Social Insurance has been amended


    On 1 May 2009 Seimas has adopted the Law amending and supplementing Articles 9, 10, 14, 21-1, 24 of the Law on Sickness and Maternity Social Insurance.

    The amendments have been adopted in order to decrease the amount of sickness allowance. As from now on sickness allowance shall be paid with the resources of the State Social Insurance Fund as follows: from 3rd to 7th day of temporary incapacity to work the allowance of 40 per cent of the reimbursed remuneration and from 8th day – the allowance of 80 per cent shall be paid.

    The Law has been supplemented with a new provision establishing that sickness allowance of 85 per cent of the reimbursed remuneration of the beneficiary of the allowance shall also be paid for a person nursing sick family member or a child.

    The above mentioned amendments to the Law shall be valid until 31 December 2010.

    Public Administration

    The Description of the Order of Exchange of the Documents submitted by Business Entities between Business Supervising Entities has been adopted

    On 1 May 2009 the Government has approved the Description on the Order of Exchange of the Documents submitted by Business Entities between Business Supervising Entities.

    The Description has been approved according to the provision of the Law on Public Administration, granting the right to business entities not to submit the documents to the supervising entity if once they have been submitted to at least one supervising entity during the current financial year. The Description regulates the exchange of the documents, necessary for due implementation of granted authorisations of the institutions, which are authorised to carry out the supervision of the activities of business entities.

    The supervisory entity has a right to apply to the other supervisory entity in such case when a business entity refused in writing to submit requested documents by motivating that certain documents have already been submitted to the other supervisory entity or when due to other reasons there is a ground to think that the supervisory entity has the necessary documents.

    Other News

    Eversheds Saladžius has become the sponsor of The World Lithuanian Economic Forum „Competitive Lithuania: Innovative Economy, Effective Business Development and Investment". The World Lithuanian Economic Forum is a significant Lithuanian business and economics event dedicated to honour the Millennium of Lithuania together with Lithuanian business society. The event will be held on 2nd of July, 2009 at the Presidential Palace of the Republic of Lithuania and will last for a couple of days. Jonas Saladžius, Managing Partner of Eversheds Saladžius, has become a member of the Honorary Council of the Forum. Daily business newspaper Verslo žinios reports that Jonas Saladžius, Managing Partner of Eversheds Saladžius, has participated in the meeting with the Chairman of the Lithuanian Parliament Arunas Valinskas. Jonas accompanied Morten Christensen, Head of Statoil in Lithuania, subsidiary of the largest Norwegian oil company, in his meeting with the Chairman regarding overall business issues in Lithuania.

    Eversheds Saladžius Give & Gain day, a firmwide Corporate Responsibility activity of Eversheds International, took place on Friday 5 June 2009. Corporate Responsibility gives us the opportunity to participate in community activities creating a positive impact for both the community and for our business. This is part of our vision to be a Great Place to Work and is an integral part of our values too. Some of our offices are already involved in activities of this kind.

    On this occasion Eversheds Saladžius gave birth to the project Behind the Scenes in Lithuania. The essence of the project was to invite secondary schools students into our office on 5 June and provide them with all the possible information on legal profesion. We hosted the students by delivering the presentation on Eversheds Saladžius, introducing to the main functions of the law firm, elaborating on Eversheds International and having some informal chats with the students. The students were very interested in the specifics of legal profession and process of legal work itself. We initiated some discussions on contemporary high school students' life and actualities, educational issues and their future plans. Our team believes the event was mutually interesting and useful: not only to the students invited but also to ourselves. Therefore the titling of the event proved itself: Give & Gain day.

    Law firm Eversheds Saladžius operating in Lithuania becomes the sponsor of the Lithuanian National Football Federation. The sponsorship role undertaken is intended to benefit to raising value and fame of Lithuanian National Football.By involving into the football sponsorship project Eversheds Saladžius demonstrates a patriotic gesture as well as gives tribute to national football ambitions. Moreover, this indulgence provides for a perfect social and business visibility as well as marketing opportunities locally and on international grounds.

    Eversheds Saladžius Coffee Inn – that is how we made ourselves known during the football game between Lithuania and France, where, sadly but leaving some hope for the future, Lithuanian national team lost 0:1. Frosty April night Eversheds Saladžius offered some warming by serving some Eversheds branded coffee and chocolates at the three VIP spaces: Presidential viewing stand, Lithuanian Football Federation Club and Business Club. All the three VIP stands summoned Lithuanian governmental representatives, celebrities and most prominent business people. Moreover, people residing at the stands had a chance to view the exhibition of Flashes of Lithuanian National Football Team posters presented by Eversheds Saladžius. June 6th was the date when Eversheds Saladžius appeared on the Lithuanian National Football match stage for a second time. Romanian and Lithuanian football teams played the game.

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