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Newsletter 2010 November

  • Lithuania

    23-11-2010

    Amendments to the Civil Code have been adopted

    On 23 of September 2010 the Civil Code of the Republic of Lithuania was supplemented with Articles 2.111 and 2.1381 as well as with new Part 2 of Article 2.147. These amendments established the Register of Legally Incapacitated Persons and Persons of Limited Capacity as well as the Register of Notarized Powers of Attorney.

    Since the Register of Legally Incapacitated Persons and Persons of Limited Capacity will be directly linked to the Register of Residents of the Republic of Lithuania, it will ensure accuracy of data about natural persons and, in order to prevent conclusion and certification of illegal transactions, will enable notaries to be duly informed about all final decisions of Lithuanian courts, which declare natural persons legally incapable or limit their capacity or revoke the said declaration or limitation.

    The newly established public Register of Notarized Powers of Attorney will list not only the notary-certified powers of attorney, but also powers of attorney equalled to notarized powers of attorney as indicated in Part 2 of Article 2.138 of the Civil Code. It will be mandated for notaries, consular offices of the Republic of Lithuania and certain other persons indicated in the Civil Code, who certify powers of attorney, to submit data to the Register of Notarized Powers of Attorney.

    These amendments and supplements will become effective as of 1 January 2011.

    Competition Law

    Amendments to the Law on Competition have been proposed

    To boost effective protection of fair competition, the President proposed the Seimas by the decree of 13/10/2010 to amend the Law on Competition of the Republic of Lithuania. In the prepared Draft Law on Amendment and Supplementation of Articles 3, 40, and 42 and Supplementation with Articles 441, 442 of the Law on Competition of the Republic of Lithuania, with regard to cartel agreements and unfair competition, it is proposed:

    • To provide for personal liability of heads of undertakings;
    • To extend terms of limitation periods for imposing sanctions and provide for cases when the running of the limitation period relating to bringing to justice is suspended;
    • To increase fines.

    According to currently valid regulatory framework, only legal entities as commercial operators are subject to liability for infringements of the Law on Competition. When a penalty for infringing the Law on Competition is imposed on a legal entity, heads (natural persons) of respective commercial operators, who are personally responsible for or had personally contributed to committing infringements of the Law on Competition (prohibited agreements between competitors or abuse of a dominant position of a commercial operator), elude liability and do not suffer any negative consequences. For this reason, it is proposed in the draft law to restrict the right of a head of an undertaking, who contributed to prohibited agreements, to serve as the head of a public or private undertaking, to sit as the member of a collegiate supervisory and/or management body or a public and/or private legal entity. The restriction of such a right may be applied from 3 to 5 years. Along with this restriction, a fine as an additional measure may be imposed. It is proposed to announce the list of persons subject to such penalties in the website of the Competition Council.

    Furthermore, in the draft law it is also proposed to extend terms for imposing sanctions for infringements of the Law on Competition up to 5 years and to provide for cases when the running of the limitation period related to bringing to justice is suspended. Pursuant to currently valid provision of the Law on Competition, commercial operators may be brought to justice for infringing this law no later than within three years from the date of committing the infringement, taking into consideration the type of infringements and complexity of their investigation. The practice of the Competition Council has revealed that the terms for imposing sanctions are too short and allow commercial operators to elude liability for infringing the Law on Competition, since the infringements emerge after some time rather than right away, during investigations it is necessary to carry out extensive economic analyses, to examine high-volume information, during investigations commercial operators avoid cooperation, and so on. The current regulatory framework, which does not provide for a possibility to suspend the running of the limitation period relating to bringing to justice because of performing an investigation or dispute litigation, encourages commercial operators to procrastinate investigations of the Competition Council and thus to elude liability. Therefore, it is proposed to ordain that the terms for imposing sanctions are suspended in 3 cases when the Competition Council performs an investigation, when an investigation performed by the Competition Council is suspended by court or when a dispute is tried in court.

    The draft law also proposes to supplement the criteria set in the Law on Competition for calculating fines with a new criterion, pursuant to which consideration would be taken of the sales value of the commercial operator’s goods, to which the infringement directly or indirectly relates, over one business year (usually the last year),when the infringement was committed and relating to which reliable annual sales data is available. Enacting this criterion would allow to prepare new methods of setting fines, which would conform to the guidelines of the European Commission on imposing fines for infringement of competition rules (in accordance with the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 (OJ 2006, Chapter 210, p. 2)). The practice of the Competition Council in imposing fines on commercial operators for infringing the Law on Competition has revealed that at present rules for calculation of fines incurred for infringements of the Law on Competition as set in the law and its implementing legislation fail to ensure that objectives of penalty imposition are properly achieved. Inclusion of the additional criterion would enable the Competition Council to impose higher fines in reasonable proportion to the damage inflicted to the public. This provision is aimed to encourage commercial operators and their heads to report voluntarily about infringements and help the Competition Council to detect the mostdifficult- to-find infringements of the Law on Competition.

    Company Law

    Registration of private limited liability companies (UAB) online

    Effective 3 November 2010, it has become possible to register a private limited liability company (UAB) online if there is only one incorporator who chooses standard articles of association and opts for the registered office of the company to be situated at his/her personally owned immovable property. From now one, company incorporators will no longer be required to pay visits to notaries or the Register Centre, but they still have to go to a bank of their choice to open a savings account for the company. The incorporators of companies may perform all the unsophisticated procedures of incorporation and registration of private limited liability companies using a self-service online application of the Register Centre at www.registrucentras.lt/savitarna/. Before the company incorporation online, the name of the to-be-registered private limited liability company needs to be booked in advance in the Register of Legal Entities, which is also possible to do online as of January 2010.

    Other News

    Eversheds Saladžius has been invited by public institution Invest Lithuania to participate at several seminars presenting Lithuania in UK

    The seminars Introduction to Research and Development, Shared Service Opportunities and Funding for UK Companies in Lithuania will be organised in several cities in UK. Today Lithuania appears on the global investment map as a not-to-miss location for international business expansion. Lithuania is increasingly being seen as a prime location for international companies looking to establish R&D and outsourcing operations. In the past few months a range of companies including Barclays Bank, Western Union, IBM and Fisher Scientific  have announced major investments in Lithuania.

    The seminars will provide an insight into the research infrastructure in Lithuania, the financial support and tax incentives available to UK companies and share information on local law and labour markets.

    The seminars will be organised in Glasgow, Manchester and Birmingham at the beginning of December. There is no cost to attend this seminar and space will be limited. To reserve a place email law.firm@evershedssaladzius.lt as soon as possible with your name, company and the number of places you would like to reserve.

    Eversheds scoops top prize at the Financial Times Innovative Lawyers Awards

    • International law firm named Most Innovative Law Firm
    • Eversheds takes top spot in the FT Law 50 report

    International law firm Eversheds has been named the Most Innovative Law Firm at the prestigious Financial Times Innovative Lawyers Awards. The firm was ranked number one in the FT Law 50 report, the Financial Times’ ranking of Europe’s most innovative law firms, knocking Freshfields Bruckhaus Deringer off the top spot.

    The awards highlight the changing face of the legal industry in light of the recession, with winners being commended for international, collaborative and truly innovative solutions.

    Eversheds also stood out in categories across the board, gaining recognition for Innovation in Client Services, Innovation in Climate Change & Sustainable Energy and Innovation in Law Firm Efficiency. The firm was also came second in the Innovation in Law Firms Brands.

    Eversheds Saladžius in Lithuania is a member firm of Eversheds International Limited.

    Eversheds Saladžius Associate Lina Aleknaitė-Van der Molen contributed to Doing Business 2011 edition

    Eversheds Saladžius Associate Lina Aleknaitė-Van der Molen contributed to Doing Business in Lithuania 2011 year edition. The Doing Business Project provides objective measures of business regulations and their enforcement across 183 economies and selected cities at the subnational and regional level. Lina provided her observations in the areas of Investors Protection and Starting a Business in Lithuania. Doing Business 2011 edition is already live at http://www.doingbusiness.org/data/exploreeconomies/lithuania

    Chambre de Commerce France-Lituanie invites to a unique discussion Women in Business in Lithuania

    Aušra Jefremovienė, Head of Marketing of Eversheds Saladžius and member of the Board of the Chambre de Commerce France-Lituanie, will host a discussion Women in Business in Lithuania. The discussion will be presented and led by famous fashion designer Julija, founder of Julija Fashion House, and Asta Jaruševičienė, founder and Head of FMG, Financial Management Group. The discussion partners will elaborate on their professional experiences, career ambitions and intuition in business. You are most welcome to participate at the event and join the discussion.

    The discussion will take place at 8.00 on 24 November, Novotel Hotel

    More information on the discussion partners may be found at www.julija.lt and www.fmg.lt

    Should you wish to register for the event, please email law.firm@evershedssaladzius.lt or call +370 5 239 2391 

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