REPUBLIC OF LITHUANIA                                     
                               LAW                                              
                                                                                
                               ON                                               
                                                                                
                          STATE CONTROL                                         
                                                                                
                      I. GENERAL PROVISIONS                                     
                                                                                
     Article 1. Purpose of the Law                                              
     The Law  shall regulate  the purpose of the State Control of               
the Republic  of Lithuania,  the legal grounds of its activities,               
shall  determine   its  functions,   structure  and  powers,  the               
procedure for  exercising control  and the financing thereof, the               
social guarantees  for the  employees and the types of activities               
control.                                                                        
                                                                                
     Article 2. State Control of the Republic of Lithuania                      
     The State  Control of the Republic of Lithuania (hereinafter               
referred  to  as  "the  State  Control")  is  the  supreme  state               
institution of  economic financial  control  accountable  to  the               
Seimas of the Republic of Lithuania which supervises the legality               
of holding  and use  of  state  property  and  the  State  Budget               
performance process.                                                            
     The State  Control is a legal person possessing a settlement               
account with  the Bank  of  Lithuania  and  a  seal  bearing  the               
Lithuanian State  emblem and  the name  "Republic  of  Lithuania.               
State Control".                                                                 
                                                                                
     Article 3. Legal Grounds of the State Control                              
               Activities                                                       
     In its  activities the  State Control shall be guided by the               
Constitution and laws of the Republic of Lithuania, international               
treaties and  agreements to  which the Republic of Lithuania is a               
party, other legal acts.                                                        
                                                                                
     Article 4. Head of the State Control                                       
     The State Control shall be headed by the State Controller of               
the Republic  of Lithuania (hereinafter referred to as "the State               
Controller") who shall be appointed for the term of five years by               
the Seimas on the nomination of the President.                                  
                                                                                
     Article 5. Accountability of the State Control                             
     At the  request of  the Seimas  the  State  Controller  must               
account to the Seimas for the activities of the State Control.                  
     The State  Controller shall  inform  the  Seimas  about  the               
results of examinations carried out on the instruction of Seimas.               
     The Seimas, the President of the Republic and, as necessary,               
the Government must be informed about the results of examinations               
of state significance.                                                          
                                                                                
     Article 6. Openness of the State Control Activities                        
     The mass  media shall  have the  right to obtain information               
about the activities of the State Control.                                      
     Information which is an official, professional or commercial               
secret shall not be made public.                                                
                                                                                
     Article 7. Control over the State Budget Performance                       
     The  State   Controller  shall  present  to  the  Seimas  in               
accordance with  the procedure  established by the Statute of the               
Seimas the  conclusion concerning  the annual national account of               
the Budget.                                                                     
                                                                                
     Article 8. Obligation to Inform the State Control                          
     The  Republic's   Government,  ministries  and  other  state               
institutions must  within 5  working days  present to  the  State               
Control  the   standard  acts   which  regulate  the  accounting,               
distribution, use and control of financial and material resources               
which have been passed by the above bodies but are not subject to               
publication in the "Valstybós ýinios".                                          
     Chief managers  of State Budget appropriations must annually               
present to the State Control expense budget performance accounts.               
                                                                                
     Article 9. Co-operation of the State Control with the                      
               Law Enforcement Institutions                                     
     On the  instructions of  law enforcement  institutions which               
are duly  authorised under  law, the  State Control shall examine               
the state  institutions and economic entities assigned within the               
competence of the State Control.                                                
                                                                                
                                                                                
               II. FUNCTIONS OF THE STATE CONTROL                               
                                                                                
     Article 10. Functions of the State Control                                 
     While performing  its functions,  the  State  Control  shall               
control:                                                                        
     1) the State Budget performance;                                           
     2) the  implementation of state programmes financed from the               
State Budget;                                                                   
     3)  economic   and  financial   activities  of   the  Seimas               
Chancellery, offices  accountable  to  the  Seimas,  subdivisions               
providing services to the Seimas;                                               
     4) economic  and financial  activities of the Chancellery of               
the President of the Republic and subdivisions providing services               
to the President;                                                               
     5) economic  and financial  activities of the Constitutional               
Court;                                                                          
     6) the  lawfulness of  the management and use of State-owned               
assets in the Bank of Lithuania;                                                
     7) economic  and financial  activities of  courts, bailiff's               
offices, prosecutor's offices and the police;                                   
     8) economic  and financial  activities of  the  Government's               
Chancellery, ministries,  Government offices  and  other  offices               
financed from the State Budget;                                                 
     9) economic and financial activities of state offices of the               
Republic of Lithuania operating in other states;                                
     10) the activities of State-owned enterprises;                             
     11) the  activities of all types of enterprises, offices and               
organisations, in  which no less than a half of voting shares are               
owned by the state;                                                             
     12) the  representation of  shares owned  by  the  State  in               
enterprises of all types;                                                       
     13) the legality of State property privatisation and sale or               
other transfer  of shares  owned by  the  State  in  enterprises,               
offices and organisations of all types;                                         
     14) the  legality of use of State-owned land, forests, water               
bodies and  other natural  resources as  well as determination of               
State-owned land value;                                                         
     15) whether  the loans  received from  the State  Budget and               
other State subsidies are used for the purpose and efficiently in               
the enterprises,  offices and  organisations;  the  economic  and               
financial condition  of the  economic entities  the guarantor  of               
loans or contractual obligations whereof is the state;                          
     16)   whether    local   authorities,    religious,   public               
organisations are  using the funds received from the State Budget               
for the purpose and efficiently;                                                
     17)  the  obtaining,  distribution,  use  and  repayment  at               
commercial banks  and enterprises,  offices and  organisations of               
all types  of credit  obtained on  behalf of the State as well as               
credit taken with the Government guarantee;                                     
     18) the formation and use of State funds and reserves; and                 
                                                                                
     19) as  necessary, the  municipal  budget  performance,  the               
economic  and  financial  activities  of  municipal  offices  and               
enterprises.                                                                    
     The  State   Control  shall   conduct  the  inquiry  in  the               
investigation of crimes assigned to its competence.                             
                                                                                
     Article 11. Supervision of Financial Discipline of                         
               State Offices                                                    
     The  State   Control  shall  supervise  the  maintenance  of               
financial discipline by state offices and present recommendations               
as to how it should be ensured.                                                 
                                                                                
     Article 12. Instructions of the Seimas to the State                        
               Control                                                          
     On  the  instruction  of  the  Seimas  of  the  Republic  of               
Lithuania, the  State Control  shall  examine  the  economic  and               
financial activities  of enterprises,  offices, organisations and               
commercial banks which are not provided for in Article 10 of this               
Law, if this is provided by law.                                                
                                                                                
       III. THE SYSTEM AND PERSONNEL OF THE STATE CONTROL                       
                                                                                
     Article 13. Organisational Framework of the State                          
               Control                                                          
     The system  of the State Control shall be formed taking into               
account the purpose, tasks and functions of the State Control.                  
     The structure  of  the  State  Control  shall  comprise  the               
departments which  perform the  functions of control (hereinafter               
referred to as control departments) and other subdivisions.                     
                                                                                
     Article 14. The State Controller                                           
     The State Controller shall:                                                
     1) direct  the State Control and shall be accountable to the               
Seimas;                                                                         
     2) organise the work of the State Control;                                 
     3) represent  the State  Control in state and non-government               
institutions as well as in international organisations;                         
     4) head the State Control Board;                                           
     5)  establish   and  divide   the  functions  of  the  State               
Controller deputies;                                                            
     6) approve  the structure  of the State Control, the list of               
staff and  the procedure  for giving  incentives to the employees               
without exceeding  the established  amount of the annual pay-roll               
fund;                                                                           
     7) approve  the  internal  work  regulations  of  the  State               
Control, the  office regulations  of the  structural subdivisions               
and their staff;                                                                
     8) control  the legality  of decisions  of the State Control               
officers, examine  complaints regarding the actions and decisions               
of the State Control officers; and                                              
     9) appoint  and dismiss,  in accordance with the established               
procedure, the officers and employees of the State Control.                     
                                                                                
     Article 15. Requirements Set to the State Controller                       
     A person  who is  a citizen of the Republic of Lithuania, is               
trained in  law or economics and has an impeccable reputation may               
be the State Controller.                                                        
     Persons who during the last three years have been Government               
members or  elected leaders  of the  central organisation  of the               
country's political  party may  not be  candidates to post of the               
State Controller.                                                               
                                                                                
     Article 16. The State Controller's Oath                                    
     The appointed  State Controller  shall take office only upon               
taking an  oath of allegiance to the Republic of Lithuania at the               
Seimas meeting.                                                                 
     The text  of the  oath of the State Controller shall read as               
follows:                                                                        
                                                                                
     "I (full name)                                                             
     swear to be faithful to the Republic of Lithuania;                         
     swear to respect and observe its Constitution and laws;                    
     swear  to   the  best   of  my  ability  to  strengthen  the               
independence  of   Lithuania,  to   protect  state  property,  to               
conscientiously serve  my Homeland, democracy, and the well-being               
of the people of Lithuania.                                                     
     So help me God!"                                                           
                                                                                
     The oath may be taken omitting the last sentence.                          
                                                                                
     Article 17. Procedure for Taking the Oath by the State                     
               Controller                                                       
     The oath  of the  State Controller  shall be administered by               
the Speaker of the Seimas of the Republic of Lithuania.                         
     The State  Controller shall  read the text of the oath while               
standing in  front of  the Seimas Speaker and holding his hand on               
the Constitution of the Republic of Lithuania.                                  
     Upon  reading  the  entire  text  of  the  oath,  the  State               
Controller shall  sign the  nominal oath  sheet. The nominal oath               
sheet shall  be handed  over to  the Speaker of the Seimas of the               
Republic of Lithuania.                                                          
     The text  of the  oath shall  not  be  amended  or  revised.               
Failure to  comply with this provision as well as refusal to sign               
the nominal  oath sheet or the signing thereof with a stipulation               
shall signify  that the  State Controller  has not taken the oath               
and, consequently, may not commence to perform his duties.                      
                                                                                
     Article 18. Participation of the State Controller in                       
               the Meetings of the Seimas and the Government                    
     The State  Controller may  attend the meetings of the Seimas               
without a  special invitation  and may  state his  opinion in the               
deliberations regarding  issues related  to the activities of the               
State Control.                                                                  
     The State  Controller shall have the right to participate in               
the meetings  of the Government of the Republic of Lithuania with               
deliberate vote.                                                                
     Should the State Controller disagree with the decision taken               
by the  Government he may state his individual opinion which must               
be recorded  in the  minutes of  the Government meeting, however,               
the implementation  of  the  Government  decision  shall  not  be               
thereby suspended.  The State  Controller shall inform the Seimas               
in writing of the stated individual opinion.                                    
     The Seimas  shall consider  the individual opinion stated by               
the State Controller in accordance with the procedure established               
by Statute of the Seimas of the Republic of Lithuania.                          
                                                                                
     Article 19. The State Controller's Property and Income                     
               Declaration                                                      
     The State  Controller shall  take office  upon declaring his               
own and his family members' property and income.                                
     The grounds  and procedure for declaring property and income               
shall be regulated by laws and Government decrees.                              
                                                                                
     Article 20. Expiry of the State Controller's Term of                       
               Office                                                           
     The State Controller shall cease to perform his duties:                    
     1) upon the expiry of his term of office;                                  
     2) if he reaches 65 years of age;                                          
     3) upon his resignation;                                                   
     4) upon being given a vote of no confidence; or                            
     5) upon his demise.                                                        
                                                                                
     Upon the expiry of the State Controller's term of office, or               
after he becomes 65 years of age or resigns, he shall continue in               
office until  another the  State Controller  is appointed  by the               
Seimas.                                                                         
                                                                                
     Article 21. Removing the State Controller from Office                      
     A vote of no confidence may be given to the State Controller               
by the Seimas or by the President of the Republic.                              
     Upon  being  given  a  vote  of  no  confidence,  the  State               
Controller shall  be removed  from office  in accordance with the               
procedure established  by  the  Statute  of  the  Seimas  of  the               
Republic of Lithuania.                                                          
                                                                                
     Article 22. The State Controller's Deputies                                
     The State  Controller's  deputies  shall  be  appointed  and               
removed from  office by  the President  of the  Republic  on  the               
nomination of the State Controller.                                             
     A person who is a citizen of the Republic of Lithuania, is a               
university graduate  and has  an impeccable reputation may be the               
State Controller's deputy.                                                      
                                                                                
     Article 23. Acting for the State Controller                                
     In the  absence of  the State  Controller one  of the  State               
Controller's deputies  who at  the said  moment is organising the               
work of the State Control but has no powers listed under items 1,               
4, 5,  and 6  of Article  14 of this Law shall act for him on his               
order.                                                                          
                                                                                
     Article 24. Departments of the State Control                               
     According to the spheres of control activities and the state               
institutions and economic entities that are under examination the               
State Control shall be divided into departments.                                
     The State Control may have territorial subdivisions (control               
departments).                                                                   
     Control departments  shall be  headed  by  department  heads               
employed in the post and removed from it by the State Controller.               
     Heads of  control departments shall organise the work of the               
departments.                                                                    
                                                                                
     Article 25. State Control Personnel                                        
     State Control officers and other employees shall be employed               
in the State Control.                                                           
     The  State   Controller,  his  deputies,  heads  of  control               
departments, controllers and persons conducting the inquiry shall               
be State Control officers.                                                      
     Persons conducting the inquiry shall be officers who conduct               
inquiry in  criminal cases  in accordance  with  the  established               
procedure who  have been  empowered for  the purpose by the State               
Controller.                                                                     
                                                                                
     Article 26. Selection of State Control Officers                            
     Employed as  State Control officers shall be citizens of the               
Republic of  Lithuania  whose  educational  attainment,  personal               
qualities and  professional training  makes them suitable for the               
work of the State Control official.                                             
                                                                                
     Article 27. Employment of the State Control Officers                       
               and other Employees, Their Transfer and                          
               Dismissal                                                        
     The employment,  transfer and dismissal of the State Control               
officers shall be regulated by this Law and other laws.                         
     Probation period for up to one year shall be established for               
the officers who are employed in control departments.                           
     The officers  shall begin to do their duties upon taking the               
oath of  allegiance to  the State  of Lithuania  and declare,  in               
                                                                                
accordance with  the established  procedure, their  own and their               
family members' property and income.                                            
     The employment,  transfer and  dismissal of  other employees               
shall be regulated by the Law on Employment Contract.                           
                                                                                
     Article 28. The Oath of the State Control Official                         
     Persons taking  up  employment  as  officers  of  the  State               
Control shall  take the following oath of allegiance to the State               
of Lithuania:                                                                   
                                                                                
     "I (full name), in your presence                                           
     swear  to   be  faithful   to  the   State   of   Lithuania,               
conscientiously observe  the laws  of the  Republic of Lithuania,               
honestly fulfil  my duties, serve the people and the State of the               
Republic of Lithuania;                                                          
     swear  to   keep  all   official  and  professional  secrets               
entrusted to me;                                                                
     swear to  always and everywhere preserve by my demeanour the               
good name of the State Control official.                                        
     So help me God!"                                                           
                                                                                
     The oath may be taken omitting the last sentence.                          
     The oath of the State Control officers shall be administered               
by the State Controller.                                                        
     The signed  nominal oath  sheet shall  be handed over to the               
State Controller.                                                               
                                                                                
     Article 29. Qualification Categories and Performance                       
               Evaluation of the State Control Officers                         
     Qualification categories shall be established for evaluating               
the qualification  of the control department officers and persons               
conducting the inquiry.                                                         
     Officers shall  be subjected  to performance evaluation with               
the aim  of evaluating  the work  results and suitability for the               
position of  control department  officers and  persons conducting               
the inquiry.                                                                    
     The  grounds   and  procedure   for  awarding  qualification               
categories and  carrying  out  performance  evaluation  shall  be               
regulated  by   the  Regulations   for   Awarding   Qualification               
Categories and Performance Evaluation Regulations approved by the               
State Controller.                                                               
                                                                                
     Article 30. Training of the State Control Personnel                        
     The  State   Control  personnel  shall  be  trained  at  the               
institutions of  learning and  studies  of  Lithuania  and  other               
states possessing long-standing traditions of democracy.                        
                                                                                
     Article 31. Public Activities of State Control Officers                    
     State Control  officers may  take part  in the activities of               
public organisations,  societies, clubs  and other  non-political               
associations.                                                                   
     The  functioning   of  political   parties   and   political               
organisations in  the State  Control shall  be prohibited.  State               
Control officers  may not  be members and supporters of political               
parties, political organisations and may not participate in their               
activities.                                                                     
     State Control  officers shall  be  prohibited  from  staging               
strikes or pickets.                                                             
                                                                                
     Article 32. Prohibition from Holding another Office                        
     The State  Control officers shall be prohibited from holding               
any other  elective or  appointive post,  being employed in other               
state,  public,  business,  commercial  or  private  offices  and               
enterprises, or  from receiving any other remuneration except his               
official salary and payment for creative activities.                            
                                                                                
     If the  State Controller or his deputy or any other official               
of the  State Control  becomes a member of the municipal council,               
he must quit his post in the State Control.                                     
                                                                                
     Article 33. Grounds for the Dismissal of State Control                     
               Officers                                                         
     A State Control official shall be dismissed:                               
     1) on  the grounds  established by  the  Law  on  Employment               
Contract;                                                                       
     2) when he reaches 65 years of age;                                        
     3)  if   during  performance  evaluation  he  is  recognised               
unsuitable for the office;                                                      
     4) if he loses citizenship of the Republic of Lithuania;                   
     5) if he discredits the name of the State Control official;                
     6) if he renounces his oath;                                               
     7) if  the provisions  of Par.  2 and 3 of Article 31 and of               
Article 32 of this Law are violated; or                                         
     8) if  he refuses  to declare his own or his family members'               
property and income, or if he understates the amount thereof.                   
     The State  Controller shall  cease to  perform his duties in               
accordance with  the procedure  established by Articles 20 and 21               
of this Law.                                                                    
     The grounds  for dismissal  from office  listed herein, with               
the exception  of the grounds provided for by item 3, shall apply               
to the State Controller's deputies.                                             
                                                                                
     Article 34. The State Control Board                                        
     A consultative  institution -  the State Control Board shall               
be formed  and shall  function within the State Control. It shall               
consist of  the State  Controller, his deputies, heads of control               
departments.                                                                    
     The State  Controller shall  be the  Chairman of  the  State               
Control Board.                                                                  
     The functions  of the  State  Control  Board  and  its  work               
procedure shall be determined by the State Controller.                          
                                                                                
                                                                                
       IV. RIGHTS AND DUTIES OF THE STATE CONTROL OFFICERS                      
                                                                                
     Article 35. Rights of the State Controller, his                            
               Deputies and Heads of Control Departments                        
     The State  Controller, his  deputies and  heads  of  control               
departments shall have the right to:                                            
     1) point  out to  the  heads  of  the  state  and  municipal               
institutions and  economic entities  which are  under examination               
the deficiencies  in their  activities, warn them, to charge them               
to eliminate the established deficiencies;                                      
     2) present  proposals to  the heads  of state  and municipal               
institutions and  economic entities  which are  under examination               
that they  should revoke  their decisions  which  violate  lawful               
interests of  other state and municipal institutions and economic               
entities, suspend  the clearly  unlawful decisions and actions of               
the officers  of state  institutions and  economic entities which               
are under  examination if  said decisions  and actions  may cause               
material damage to the state;                                                   
     3) impose  cash deductions  on the officers for the recovery               
of unauthorised  expenditure in  the  amount  equivalent  to  the               
damage  inflicted   on  the  state,  municipality  and  state  or               
municipal enterprise,  office or  organisation, but not in excess               
of 6 average monthly salaries;                                                  
     4) file  an action  in court  and propose  dismissal of  the               
guilty officers  from their  respective posts, with the exception               
of those  appointed by the President of the Republic or appointed               
or  elected  by  the  Seimas,  for  the  violations  of  laws  or               
Government decrees  or extensive  damage inflicted  on the state,               
                                                                                
municipality  or   state  or   municipal  enterprise,  office  or               
organisation;                                                                   
     5) recommend  to  the  heads  of  the  state  and  municipal               
institutions and economic entities which are under examination or               
to the heads of their superior institutions that they dismiss the               
employees subordinate to them from their respective posts for the               
violations of economic and financial activities;                                
     6) demand from heads of state and municipal institutions and               
economic entities  which are  under examination  or from heads of               
their superior  institutions that disciplinary penalties be taken               
against the  employees who  committed the  violations or that the               
employees be held materially liable therefor;                                   
     7) give  instructions to  banks to  suspend for  up  to  one               
month's period  the  payment  and  transfer  of  money  from  the               
accounts  of   state  and  municipal  institutions  and  economic               
entities which  are under  examination if extensive damage to the               
state is established in the course of examination. Upon receiving               
such instructions,  banks may  not open  a new  account  for  the               
state, municipal institution or the economic entity;                            
     8) charge  the heads of state and municipal institutions and               
economic entities  which are  under examination to repay into the               
state  or   municipal  budgets  or  state  funds  the  resources,               
subsidies,  budgetary   appropriations  allocated   or  used   in               
violation of  laws or  other legal  acts as well as to pay to the               
state the unpaid taxes and amounts due under economic sanctions;                
     9) exact  without suit from state and municipal institutions               
and economic  entities which are under examination the resources,               
subsidies, and  budgetary appropriations  allocated  or  used  in               
violation of laws or other legal acts as well as the unpaid taxes               
and amounts due under economic sanctions and pay the amounts into               
the state and municipal budgets or state funds;                                 
     10)  bring  an  action  in  court  in  defence  of  property               
interests of the State;                                                         
     11) submit  proposals to  cancel,  in  accordance  with  the               
procedure established by law, the enterprise registration for the               
violations established by the laws of the Republic of Lithuania;                
     12)  give   instructions  to  state  and  municipal  control               
institutions to  conduct examination  in the  state and municipal               
institutions and  economic entities  which  are  assigned  within               
their jurisdiction;                                                             
     13)  obtain   from  expert   examination  offices   findings               
regarding the examination material;                                             
     14)  enlist   the  aid   of   specialists   for   conducting               
examination; and                                                                
     15) impose  administrative penalties  in accordance with the               
procedure established by law.                                                   
                                                                                
     Article 36. Decisions of the State Controller, his                         
               Deputies and Heads of Control Departments                        
     Exercising their  respective powers,  the State  Controller,               
his  deputies  and  heads  of  control  departments  shall  adopt               
decisions regarding  the violations in the economic and financial               
activities of  state  and  municipal  institutions  and  economic               
entities which are under examination.                                           
                                                                                
     Article 37. The Procedure for Appealing the Decisions                      
               of the State Controller, his Deputies and                        
               Heads of Control Departments                                     
     The  decisions  of  heads  of  control  departments  may  be               
appealed to  the State  Controller or his deputies within 10 days               
of the receipt thereof.                                                         
     The decisions  of  the  State  Controller  or  his  deputies               
regarding  the  imposed  cash  deductions  for  the  recovery  of               
unauthorised expenditure  and exaction  of funds without suit may               
be appealed by instituting, within 10 days, action proceedings at               
the Vilnius district court of the first instance. Appeal to court               
shall not  suspend the  implementation of  decisions of the State               
Controller or his deputies, unless the court rules otherwise.                   
                                                                                
     Article 38. Administrative Liability of Persons for                        
               Obstruction of the State Control                                 
     Administrative action  shall be  taken against  persons  who               
prevent  State  Control  officers  from  conducting  examination,               
refuse  to   produce  or  conceal  documents,  furnish  false  or               
incomplete data as well as fail to comply with the lawful demands               
and decisions of State Control officers.                                        
                                                                                
     Article 39. Rights of State Control Officers                               
     In discharge  of their  functions of  control, State Control               
officers shall have the right to:                                               
     1)  check   material  valuables,   money,   securities   and               
documents;                                                                      
     2)  request  that  the  examined  persons  produce  required               
documents;                                                                      
     3) be  allowed free  entry of  the  premises  of  state  and               
municipal institutions  and economic  entities  which  are  being               
checked;                                                                        
     4) obtain  verbal and written explanations, certificates and               
copies of  documents from  the employees  of state  and municipal               
institutions and  economic entities  under examination as well as               
from private persons;                                                           
     5) confiscate  documents leaving copies thereof and the list               
of  confiscated  documents  and  attach  said  documents  to  the               
examination reports  (acts); when  deemed necessary,  seal up the               
places of  safekeeping of  documents, securities, money and other               
material valuables;                                                             
     6) request  that check measurements, stocktaking of material               
valuables and other factual checks be carried out;                              
     7) obtain data, certificates and copies of documents related               
to the  examination from  the Bank of Lithuania, commercial banks               
and other  credit institutions  as well  as state  and  municipal               
institution and economic entities;                                              
     8) carry  out counter-checks  in economic entities and banks               
of all  forms of  ownership to  the extent this is connected with               
the  examination   conducted  by   the  State   Control  and  the               
established violations; and                                                     
     9) engage the aid of police officers in the event that entry               
of premises  of state  and municipal  institutions  and  economic               
entities is  obstructed or  in case  of refusal  to  produce  the               
requested documents. In such cases police officers must take away               
the documents requested by the State Control officer.                           
                                                                                
     Article 40. Examination of Secret Documents                                
     Documents containing  data included  in the official secrets               
list and  the material  valuables and resources specified therein               
shall be  examined by  the State  Controller personally or by the               
State Control  officers specially  authorised on  his instruction               
for the purpose.                                                                
                                                                                
     Article 41. Powers of the State Control Officers to                        
               Impose Administrative Penalties                                  
     In the  cases determined  by law,  the State Controller, his               
deputies and heads of control departments shall be granted powers               
of the officer having powers to impose administrative penalties.                
                                                                                
     Article 42. Duties of the State Control Officers                           
     The State Control officers must be objective, keep official,               
commercial and  professional secrets  divulged  to  them  in  the               
discharge of their official duties as well as refrain from giving               
preliminary public evaluation of the performed examination.                     
                                                                                
               V. PROCEDURE FOR EXERCISING CONTROL                              
                                                                                
     Article 43. Period, Methods, Scope of Control and                          
               Conditions of Work                                               
     The State  Control shall at its own discretion determine the               
period, methods and scope of control.                                           
     The heads  of state  and municipal institutions and economic               
entities which  are under  examination must provide the necessary               
conditions of  work  for  the  State  Control  officers  and  the               
specialists engaged  by them  for the  purpose of  performing the               
functions of control.                                                           
     The examination  must be  performed in  such a  manner as to               
interfere as  little as possible in the activities of the persons               
under examination.                                                              
                                                                                
     Article 44. Rights and Duties of the Employees whose                       
               Activities are Examined by the State Control                     
     The employees  whose activities  are examined  by the  State               
Control  must   participate  in   the  examination   of  material               
valuables, securities and money they are in charge of; shall have               
the right  to familiarise  themselves with the documents in which               
the  deficiencies   of  their   work  is   recorded  and  present               
explanations.                                                                   
     If  employees   of  state  and  municipal  institutions  and               
economic entities which are under examination avoid participating               
in the  performance of  examination, the  checks shall be carried               
out without  their participation  and a  corresponding  statement               
shall be drawn up.                                                              
                                                                                
     Article 45. Examination Documents                                          
     Upon the  completion of  examination  a  report  (statement)               
shall be  drawn up,  the  responsibility  for  the  validity  and               
truthfulness of  the contents  whereof shall  fall fully  on  the               
State Control officer who signed it.                                            
     Heads and  officers of  state and municipal institutions and               
economic entities  under examination  must sign  the  examination               
documents no  later than  within 3  days from  the receipt of the               
report (statement).  If they  object to the recorded deficiencies               
in their  work, they  may  present  their  comments  in  writing.               
Refusal to  familiarise with  and sign  the examination documents               
shall not stop the taking of decisions.                                         
                                                                                
     Article 46. Time Limits for Implementing the Decisions                     
               of the State Control Officers                                    
     Heads of  state  and  municipal  institutions  and  economic               
entities which  have  been  subjected  to  examination  shall  be               
informed of  the decisions  adopted by the State Control officers               
and must  within a  month or  within any  other fixed time period               
inform the  State Control of the measures taken to compensate for               
the inflicted damage and to eliminate the established violations.               
                                                                                
        VI. IMPOSING CASH DEDUCTIONS FOR THE RECOVERY OF                        
                    UNAUTHORISED EXPENDITURE                                    
                                                                                
     Article 47. Imposing cash Deductions for the Recovery                      
               of Unauthorised Expenditure                                      
     Cash deductions for the recovery of unauthorised expenditure               
shall be imposed:                                                               
     1) regardless  of  the  application  of  other  measures  of               
influence provided for in Article 35 of this Law;                               
     2) on  the basis  of  examination  performed  by  the  State               
Control officers; and                                                           
     3) taking  into account  the extent of material damage which               
shall  be   determined  in  accordance  with  the  actual  losses               
sustained  by  state  and  municipal  institutions  and  economic               
entities,  on  the  basis  of  accounting  data  (damaged,  lost,               
                                                                                
unlawfully written-off  property; amounts  paid out  without  due               
justification; fines, late charge and other economic sanctions).                
     The value  of property  in the case of its misappropriation,               
embezzlement, wilful  destruction and damage shall be assessed on               
the basis  of  government-controlled  or  maximum  market  prices               
effective at the moment of establishment of said facts.                         
                                                                                
     Article 48. Conditions Precluding Imposition of Cash                       
               Deductions for Unauthorised Expenditure                          
               Recovery                                                         
     Cash deductions for the recovery of unauthorised expenditure               
may not  be imposed  after the passage of six months from the day               
of establishment  of material  damage caused by an officer (i.e.,               
from the day of drawing up of the examination report (statement),               
excluding the period of the officer's absence from work by reason               
of illness, business trip or holiday).                                          
                                                                                
     Article 49. Implementation of Decisions of the State                       
               Controller, his Deputies and Heads of Control                    
               Departments Regarding the Imposition of                          
               Cash Deductions for Unauthorised Expenditure                     
               Recovery                                                         
     Heads of  state  and  municipal  institutions  and  economic               
entities must  implement the  decisions of  the State Controller,               
his deputies  and heads  of  control  departments  regarding  the               
imposition of  cash deductions  for the  recovery of unauthorised               
expenditure.                                                                    
     The decision  to impose  cash deductions for the recovery of               
unauthorised expenditure  shall be  sent by  the State Control to               
the officer  who caused the damage, at his office address, and to               
the corresponding state tax inspectorate.                                       
     The amount  for the  recovery  of  unauthorised  expenditure               
shall be  deducted  from  the  officer  in  accordance  with  the               
procedure established  by law  by the  accounting  department  of               
state and  municipal institutions and economic entities which are               
under examination  at the place of his employment on the basis of               
the decision of the State Control.                                              
     The  deducted   amount  for  the  recovery  of  unauthorised               
expenditure shall  be transferred within five days into the State               
Budget.                                                                         
     From persons who take up another employment at another state               
or municipal  institution or  economic entity without having paid               
the required amount for the recovery of unauthorised expenditure,               
the sum  due shall  be deducted at their new place of employment.               
In such  cases the  head, the  chief  accountant  of  the  state,               
municipal institution  or economic  entity must send the decision               
of the  State Control  regarding  the  recovery  of  unauthorised               
expenditure with the entry concerning the deducted amounts to the               
new place  of employment  of the person who has failed to pay the               
amount for  the recovery  of unauthorised  expenditure and notify               
the appropriate state tax inspectorate thereof.                                 
     If it is impossible to deduct the amount for the recovery of               
unauthorised expenditure  or the  unpaid  sum  thereof  from  the               
salaries  of  persons  on  whom  it  is  imposed,  the  documents               
concerning the  recovery shall be referred to court in order that               
the required  amount  be  recovered  from  the  property  of  the               
specified person  in accordance with the procedure established by               
the Code of Civil Procedure of the Republic of Lithuania.                       
                                                                                
                                                                                
            VII. THE RIGHT OF STATE CONTROL OFFICERS                            
                        TO USE FIRE-ARMS                                        
                                                                                
     Article 50. The Use of Firearms                                            
     State Control officers shall be granted the right to possess               
service firearm.                                                                
     The procedure  for  the  acquisition,  keeping  and  use  of               
firearms shall be regulated by laws and Government decrees.                     
                                                                                
                                                                                
        VIII. COMPENSATION FOR WORK AND SOCIAL GUARANTEES                       
                    OF STATE CONTROL OFFICERS                                   
                                                                                
     Article 51. Compensation for Work of State Control                         
               Officers                                                         
     The procedure  and conditions  of compensation  for work  of               
State Control  officers shall  be established  by the laws of the               
Republic of Lithuania.                                                          
                                                                                
     Article 52. Social Guarantees for State Control                            
               Officers                                                         
     Social  guarantees  for  State  Control  officers  shall  be               
established by the laws of the Republic of Lithuania.                           
                                                                                
          IX. FINANCING AND MATERIAL -TECHNICAL SUPPLY                          
                      OF THE STATE CONTROL                                      
                                                                                
     Article 53. Financing of the State Control                                 
     The State  Control shall  be financed  from  the  Lithuanian               
State Budget.  The funding  level shall  be determined  and funds               
shall be  appropriated by the Seimas of the Republic of Lithuania               
on the proposal of the Committee on Budget and Finance.                         
                                                                                
     Article 54. Provision of the State Control with                            
               Premises                                                         
     The State  Control may  have official  dwelling  space.  The               
dwelling space shall be acquired in accordance with the procedure               
established by the Government.                                                  
                                                                                
     Article 55. Funds Assigned for Promoting the State                         
               Control Activities                                               
     After the  completion of  examination by  the State  Control               
officers, a  share (30%)  of the  funds recovered  and paid  into               
municipal budgets  as well  as into state funds shall be assigned               
for strengthening  the resource base and for giving incentives to               
the personnel.                                                                  
     75% of  the funds  received in accordance with the procedure               
established in  Par. 1 hereof shall be assigned for strengthening               
the resource base of the State Control and 25% of the funds shall               
be allotted for giving incentives to the personnel.                             
     Par. 1  and 2  hereof shall  be effective  until the  Seimas               
establishes the general procedure for promoting the activities of               
State Control institutions.                                                     
                                                                                
                                                                                
   X. PARLIAMENTARY CONTROL OVER THE STATE CONTROL ACTIVITIES                   
                                                                                
     Article 56. Parliamentary Control over the State                           
               Control Activities                                               
     Parliamentary control  over  the  State  Control  activities               
shall be exercised by the Seimas of the Republic of Lithuania.                  
     The economic  and financial  activities of the State Control               
shall be  annually examined  by the  commission appointed  by the               
Seimas. The  examination report  shall be presented to the Seimas               
together with  the  conclusion  concerning  the  annual  national               
account of the Budget.                                                          
                                                                                
     I promulgate  this Law  passed by the Seimas of the Republic               
of Lithuania.                                                                   
                                                                                
                                                                                
Algirdas Brazauskas                                                             
President of the Republic                                                       
                                                                                
Vilnius                                                                         
30 May 1995                                                                     
No. I-907