REPUBLIC OF LITHUANIA
Law
on
Privatisation of State-Owned
and Municipal Property
Chapter 1
GENERAL PROVISIONS
Article 1. Definitions Used in this Law
As used in this Law:
privatisation means the transfer of state-owned and
municipal property (shares, shareholdings and other property) to
the ownership of privatisation subjects under privatisation
transactions entered into in accordance with the procedure
established by this Law;
privatisation object means shares or any other assets
belonging to the state or a municipality by the right of public
ownership and which the Government of the Republic of Lithuania
or a municipal council decides to privatise. Housing belonging to
a municipality may not be a privatisation object;
privatisation subject means natural and legal persons of
Lithuania or a foreign state, who acquire the privatisation
object under this Law. Privatisation subjects may not be
Lithuanian state or municipal enterprises, institutions and
organisations financed out of the state or municipal budgets, as
well as stock and close stock companies, banks and insurance
agencies wherein more than 50% of the shares are held by the
state of Lithuania or a municipality;
privatisation transaction means a contract entered into
pursuant to this Law, under which privatisation institution
authorised by the state or a municipality to act as a seller of
state-owned or municipal assets, obligates itself to transfer the
privatisation object into the ownership of the privatisation
subject, and the privatisation subject commits itself to pay the
amount of money agreed in the contract, and/ or to fulfil other
obligations to the benefit of the Republic of Lithuania, or the
municipality;
initial privatisation means transfer of state-owned or
municipal property under the Law on Initial Privatisation of
State Property (hereinafter referred to as LIPSP);
enterprise means any legal person established and registered
in accordance with the laws of the Republic of Lithuania;
enterprise controlled by the state (municipality) means an
enterprise wherein more than 50 percent of voting shares belong
to the state or a municipality;
state (municipality) controlled enterprise under
privatisation means such state (municipality) controlled
enterprise which is included in the privatisation programme in
accordance with this Law;
founder of the enterprise means state institutions of the
Republic of Lithuania or the municipality or governing
institutions or other state institutions which hold state-owned
(municipal) property or at least one share in a public or private
company.
Unless otherwise provided, terms in bold print used herein
shall have the definitions specified above.
Article 2. Objective of the Law
1. The objective of this Law is to establish privatisation
of state-owned and municipal property for money instead of
initial privatisation under LIPSP.
2. The state-owned or municipal property owned by the right
of public ownership may be transferred to other persons as the
private property only in compliance with this Law, unless other
laws of the Republic of Lithuania provide otherwise.
Chapter 2
Privatisation Institutions
Article 3. Privatisation Institutions
1. Privatisation institutions shall be the following:
1) Privatisation Commission;
2) Lithuanian State Privatisation Agency within the
Government of the Republic of Lithuania (hereinafter referred to
as Privatisation Agency);
3) Ministries and municipalities;
4) municipal privatisation commissions.
2. Decisions of privatisation institutions on privatisation
issues, adopted in conformity with their powers and in compliance
with this and other laws, are mandatory to founders of
enterprises that are being privatised.
3. Municipal Council shall have the right not to establish
privatisation institutions provided for in Article 9 of this Law
and to authorise the mayor to conclude an agreement with the
Privatisation Agency, concerning the privatisation of
privatisation objects belonging to the municipality by the right
of ownership. Upon entering into such agreement with the
Privatisation Agency , the municipality shall also perform other
functions of the founder of an enterprise, regulated by this Law.
4. If the municipality council establishes municipal
privatisation institutions specified in Article 9 of this Law,
they shall have all the rights and shall perform all the
functions of the privatisation commission and Privatisation
Agency established by this Law. The executive institution of a
municipality must submit the list of privatisation objects and
data for the privatisation programme to the Privatisation Agency
within the time limit established by the Government of the
Republic of Lithuania.
5. The Government of the Republic of Lithuania and the
privatisation commission shall have no right to make any changes
in the data submitted for compilation of the list of
privatisation objects and drawing up of privatisation programme
if these data meet the requirements set forth by this Law.
Article 4. Objective, Establishment and Powers of the
Privatisation Commission
1. Privatisation Commission shall be a temporary state
institution operating in accordance with this Law and its
statutes, approved by the Government of the Republic of
Lithuania, which is formed exclusively for the purpose of this
Law. Upon the implementation of the tasks set forth by this Law,
the activities of the Privatisation Commission may be terminated
by the decision of the Government of the Republic of Lithuania or
said Commission may be reorganised. The Government of the
Republic of Lithuania may adopt resolutions regulating separate
spheres of activities of the Privatisation Commission only in
cases provided by this or other laws. Privatisation Commission
shall report to the Government of the Republic of Lithuania.
2. Privatisation Commission shall consist of 13 members - 11
members shall be recommended by the Prime Minister and 2 members
by the Association of Municipalities. Its members shall comprise
Ministers, Under-Secretaries of the Ministry of Finance, the
Ministry of Justice and other Ministries which perform the
functions of the founder of the enterprise, director of the
Privatisation Agency or other authorised officials of state power
and government institutions. The chairman of the Privatisation
Commission and its members shall be appointed and dismissed from
office by the Seimas of the Republic of Lithuania on the
recommendation of the Prime Minister.
3. Privatisation Commission shall be entitled to:
1) approve or disapprove privatisation programmes prepared
by Privatisation Agency and to control their implementation;
2) approve or disapprove privatisation transactions;
3) to perform the functions of the Central Privatisation
Commission established by LIPSP.
Privatisation Commission may adopt negative resolution in
cases specified in this Article only provided the drafts of
relevant resolutions are prepared not in compliance with this and
other laws of the Republic of Lithuania and Government decrees or
they are drafted with the knowingly adverse purpose to the
interests of the society .
4. Decisions of the Privatisation Commission shall be passed
by the simple majority vote of all Commission members. Commission
member shall have no right to vote on the issue, provided he or
members of his family have an interest in the results of the
decision.
Article 5. Powers of Privatisation Agency in Matters of
Privatisation
1. Privatisation Agency shall be the institution of the
Government of the Republic of Lithuania established pursuant to
the Law on the Government of the Republic of Lithuania.
2. When performing the functions of privatization
established by this Law, the Privatisation Agency shall act as
the representative of the Government of the Republic of
Lithuania, privatising the state-owned property. Under separate
agreements with municipalities, the Privatisation Agency may also
act as a representative of a separate municipality, which
privatises the property owned by the municipality.
Article 6. Duties of Privatisation Agency
1. Privatisation Agency shall:
1) compile annual draft list of privatisation objects and
submit it to the Government of the Republic of Lithuania for
approval;
2) on the recommendation of the founder of the enterprise,
determine the method of privatisation;
3) on the recommendation of the founder of the enterprise,
determine the terms and conditions of privatisation of a separate
privatisation object or a group of such objects;
4) at least once a quarter, prepare privatisation programmes
and submit them to the Privatisation Commission for approval, and
after they are approved, arrange the implementation of these
programmes;
5) appoint its representative to the commission formed by
the founder of the enterprise, which assesses the value of the
privatisation object;
6) issue Information Bulletin of Privatisation, wherein
official announcements shall be published. Information Bulletin
of Privatisation must contain information about privatisation
object, specified in Article 14 as well as additional information
as deemed necessary by Privatisation Agency;
7) on the recommendation of the founder of the enterprise,
and in conformity with the procedure set forth in Article 15,
allow or disallow the enterprise controlled by the state
(municipality), which is being privatised, to conclude
transactions;
8) arrange the advertising of the privatisation object;
9) alongside with the founder of the enterprise, seek
investors for privatisation object;
10) conduct the keeping of records of privatisation works in
Lithuania;
11) sign privatisation transactions.
2. Within the scope of its powers, Privatisation Agency must
ensure that each privatisation transaction be most efficient on
the macroeconomic level (business guarantees, investments,
employment guarantees, financial revenues, etc.)
Article 7. The Rights of Privatisation Agency in the
Sphere of Privatisation
1. Privatisation Agency shall have the right to:
1) approve or reject restructuring project of the enterprise
controlled by the state (municipality), prepared by the founder
of the enterprise;
2) hire experts by competition for carrying out
privatisation tasks;
3) propose to the founder of the enterprise to replace the
head of the administration or (and) the Board of the enterprise
controlled by the state (municipality) under privatisation, if
this enterprise failed to submit information established by legal
documents;
4) upon coming into effect of the privatisation transaction,
issue (or to delegate this right to an authorised representative)
documents to persons who have acquired privatisation objects
(shares of enterprises), that certify the ownership right;
5) represent the Government of the Republic of Lithuania in
court in cases concerning privatisation transactions signed by
the Privatisation Agency, as well as privatisation transactions
concluded under LIPSP;
6) establish agencies abroad for the implementation of tasks
set forth by this Law.
2. Privatisation Agency shall have the right to obligate the
founder of the enterprise to:
1) prepare proposals concerning the privatisation
restructuring (parcelling, debt coverage, creation of
infrastructure, etc.) , if upon the valuation of the
privatisation object (enterprise) , it turns out that such
restructuring shall enhance the possibility to privatise it or
shall increase the selling price of the privatisation object
(enterprise);
2) according to the procedure established by laws, appeal to
court with regard to the invalidation of transactions concluded
by the enterprise controlled by the state (municipality), in
violation of this and other laws, and compensation for damage.
Article 8. Duties of the Founder of the Enterprise in
the Sphere of Privatisation
The founder of the enterprise shall have to:
1) submit to the Privatisation Agency lists of the
privatisation objects intended for privatisation within the time
limits established by the Government of the Republic of
Lithuania;
2) prepare restructuring projects of privatisation objects
(enterprises) and upon the approval of the privatisation
programme, monitor the implementation of restructuring;
3) according to the list of privatisation objects approved
by the Government of the Republic of Lithuania, collect
information on the privatisation object , determine its value,
perform expert examination of all the documents of this
privatisation object, as well as prepare the draft programme of
the privatisation of this object and submit it to the
Privatisation Agency;
4) propose privatisation method;
5) propose terms and conditions of privatisation;
6) seek for the investor for the privatisation object;
7) give recommendations to the Privatisation Agency in
accordance with the procedure established by Article 15 of this
Law, concerning the transactions concluded by the enterprise
controlled by the state (municipality);
8) monitor the implementation of privatisation transactions
until all terms and conditions are met, or take measures provided
by laws against the privatisation subjects who default on the
terms and conditions of privatisation transaction.
Article 9. Powers of Municipal Privatisation
Commissions in the Sphere of Privatisation
1. Decision to include an enterprise owned by the
municipality or any other assets transferred into the ownership
of the municipality, into the list of privatisation objects shall
be passed by the municipal council.
2. Municipal privatisation commissions may be established by
the decision of the municipal council if the property owned by
the municipality is not transferred to the Privatisation Agency
under contract and according to the procedure established by this
Law for the purpose of privatisation.
3. The composition of the municipal privatisation commission
shall be established by the municipal council. Municipal
privatisation commissions shall perform at the municipal level
the same functions as privatisation commission and shall report
to the municipal council.
4. The statutes of the municipal privatisation commissions
shall be approved by the municipal council.
5. Municipal privatisation commissions shall take over the
functions of city (district) privatisation agencies established
for the purpose of implementation of the LIPSP.
6. Municipal executive institution authorised by the
municipal council shall perform, at municipal level, the
functions of the Privatisation Agency assigned by this Law, if
the municipal property is not transferred to the Privatisation
Agency according to the procedure established by this Law for the
purpose of privatisation.
7. Information about the municipal privatisation objects
must be published according to the procedure established by this
Law. For the publishing of information in the Information
Bulletin of Privatisation, the Privatisation Agency may charge a
fee which shall not exceed the average cost of advertising.
Municipality may publish in other information media other
information about privatisation objects as defined by this Law,
deemed necessary by the municipality.
Article 10. Privatisation Funds
1. Privatisation funds shall consist of :
1) receipts from privatisation transactions;
2) interest on payments deferred under privatisation
transactions;
3) interest on credits and loans granted from the
Privatisation Fund for the promotion of small and medium
business;
4) other revenues (aid from international organisations,
receipts from additional services, use of data base, etc.)
Privatisation funds referred to in par. 1 of this Article
shall be transferred to the account of the Privatisation Fund.
3. Financial resources of the Privatisation Fund shall be
used for:
1) payment for services rendered by hired experts;
2) Savings Restoration and Compensation Fund;
3) credits and loans for the promotion of small and medium
business and other investments in the Lithuanian economy;
4) covering of the expenses related to the technical supply
of Privatisation Commission, Privatisation Agency, and the
founder of the enterprise established by this Law, as well as for
the incentives to the employees engaged in privatisation,
publishing of Information Bulletin of Privatisation, and the
fulfilment of other functions established by this Law.
4. The resources of the Privatisation Fund shall be used
according to the estimate which shall be approved each quarter by
the Government of the Republic of Lithuania upon the submission
by the Ministry of Finance. The Government of the Republic of
Lithuania shall also establish the procedure for accounting and
application of resources of the Privatisation Fund.
5. The Government of the Republic of Lithuania by its
resolution shall establish annually the amount of financial
resources that it shall spend on the incentives to the employees
of the Privatisation Agency, Privatisation Commission, and the
founder of the enterprise, as well as the procedure for providing
incentives. In establishing incentives procedure the Government
must take into account the amount of investments into Lithuanian
economy, that result from privatisation transactions.
6. Privatisation receipts from the privatisation of
municipality-owned property shall be transferred to a special
account of the municipality. The procedure for the application of
these funds shall be established by the municipal council.
Chapter 3
PREPARATION OF OBJECTS FOR PRIVATISATION
Article 11. Gathering of Information on the Objects of
Privatisation
1. The founder of the enterprise must submit to the
Privatisation Agency documents and information concerning the
privatisation object (with the exception of commercial or
industrial secret) according to the procedure established by this
Law. The information containing industrial or commercial secret
must be submitted only during the negotiations on privatisation
transaction with the prior written obligation of all the
participants of the negotiations to keep this secret confidential
for the period established in the obligation.
2. Public information established by the laws of the
Republic of Lithuania may not be an industrial or commercial
secret.
Article 12. Valuation of the Privatisation Object
1. The value of the object of privatisation shall be
assessed for the purpose of determining its initial selling
price, on the basis of which the Privatisation Agency
(municipality) shall enter into privatisation transactions.
2. The object of privatisation shall be valued by the
commission formed by the founder of the enterprise, comprising
persons having a qualification certificate of the valuator, or a
natural or legal person having a licence for the valuation of
property, who is hired by the founder of the enterprise on a
competitive basis. Licences entitling to value the objects of
privatisation shall be issued by state institution authorised by
the Government of the Republic of Lithuania. The Privatisation
Commission shall have the right to hire on the competitive basis
an independent valuer for the assessment of the value of each
object of privatisation.
3. The object of privatisation may be valued by applying one
of the following methods or a combination of several of the
following methods:
1) comparable value (analogous selling price), the essence
of which is a comparison, i.e. the market value is determined by
comparing real transaction prices of analogous goods, taking into
account the differences between the object to be valued and an
analogous object ;
2) replacement value (cost), the basis of which is the
calculation of the price at which they could be replaced, broadly
in their existing state, according to the technologies and prices
used at the time of valuation;
3) price - earnings based value (income capitalisation) or
discount cash flow, when the asset is valued as a profit -
yielding business rather than the total of separate assets. The
forecasting of future cash flows and their present value
constitute the basis of this method;
4) special value method is applied for the valuation of
unique objects of art and history, jewellery and antiques,
various collections (they are valued according to special
technologies of valuation of this type of property);
5) other methods used in international practice and approved
by the Government of the Republic of Lithuania.
The procedure for the application of the methods of
valuation of privatisation objects specified above shall be
established by the Government of the Republic of Lithuania.
4. When assessing the value of the shares (assets) of the
enterprise controlled by the state (municipality), the value of
the plot of land used by said enterprise must also be taken into
account.
5. As the initial price of the privatisation object is not a
minimal selling price of the object, the Privatisation Agency
shall have the right, with the prior agreement of the founder of
the enterprise and the approval of the Privatisation Commission,
to reduce the selling price of the privatisation object provided
its privatisation failed within time limits set forth in the
privatisation programme.
Article 13. List of Privatisation Objects and the
Privatisation Programme
1. The list of privatisation objects is a document
containing the title, registered office, code, principal type of
activities, authorised capital, the amount of capital being
privatised (in nominal terms and in percentage) and the number of
employees on the pay-roll of the privatisation object.
2. The list of privatisation objects shall be approved
annually by the Government of the Republic of Lithuania on the
recommendation of the Privatisation Agency.
3. Privatisation programme is the document specifying:
1) the method of privatisation;
2) time period of privatisation;
3) short description of privatisation object, the shares or
assets of which are being sold (the capital and its structure,
the assets and their structure, nominal value of shares owned by
the state (municipality), profitability of the authorised
capital, the volume of production (annual turnover), the type of
principal activities, information on the market share and export
share of production (services) of the enterprise, number of
employees, geographical location) and the claims of third persons
to the privatisation object;
4) terms and conditions of privatisation.
The Government of the Republic of Lithuania shall be
entitled to establish other requirements for privatisation
programmes.
4. The enterprise controlled by the state (municipality) may
be included in the privatisation programmes only when they are
corporatised in the manner provided by the Company Law and re-
registered as stock companies. This provision, by the decision of
the founder of the enterprise, may not be binding upon the
enterprise controlled by the state (municipality) which is
planned to be privatised by the method of lease with the option
to purchase.
5. The property to which natural and legal persons and
religious communities claim to restore their rights of ownership
in accordance with the procedure established by the laws of the
Republic of Lithuania, as well as enterprises which pursuant to
the Republic of Lithuania "Law on Enterprises which are not
Planned to be Corporatised or Privatised by the Year 2000" are
included in the list of enterprises which shall not be privatised
or corporatised.
6. The objects that are protected by the state in accordance
with the laws of the Republic of Lithuania may be included in the
privatisation programmes only upon co-ordinating the terms and
conditions of their use with the relevant institution performing
the function of state supervision of these objects.
7. The privatisation object may be removed from the list
approved by the Government of the Republic of Lithuania or from
the privatisation programme approved by the Privatisation
Commission only after it has been offered for sale at least once
in conformity with this Law but failed to be sold during the time
period specified in the privatisation programme.
Article 14. Publishing of Information on Privatisation
Objects
1. Information on the privatisation object must be published
in the Information Bulletin of Privatisation. The announcement
must contain the following information:
1) privatisation programme;
2) the name, position, address, telephone and fax number of
the employee of the Privatisation Agency (municipality)
responsible for the implementation of privatisation programme;
3) the time of visit to the enterprise controlled by the
state (municipality) that is being privatised and the name,
position, address, telephone and fax number of the employee of
this enterprise, responsible for the implementation of the
privatisation programme;
4) procedure for the acquisition and payment for the set of
privatisation documents;
5) the place of public auction or public subscription for
shares.
The Privatisation Agency may also announce in this Bulletin
and other mass media other (additional) information.
2. The obligatory information on the privatisation object,
referred to in par. 1 of this Article must appear in the
Information Bulletin of Privatisation not later than 30 days
prior to the beginning of privatisation.
Article 15. Restrictions on the Activities of the
Enterprise Controlled by the State
(Municipality) under Privatisation
The enterprise controlled by the state (municipality)
included in the privatisation programme shall have no right,
without prior consent of the Privatisation Agency, to enter into
transactions (including lending and borrowing, leasing, as well
as agreements concerning the supply of raw materials and
materials, acquisition of capital goods, or any other transfer)
for the period of 9 months, if the total value of assets in
regard to which the transaction (transactions) is concluded
exceeds more than 10 percent of its statutory capital. If such
transactions are concluded without the prior consent of the
Privatisation Agency, they shall be invalid since they pursue
goals clearly contrary to public interest. If such transactions
are entered into with the prior consent of the Privatisation
Agency on the recommendation of the founder of the enterprise,
Privatisation Agency must immediately inform the privatisation
subjects in the same manner as is provided the information about
the enterprise controlled by the state (municipality) under
privatisation.
Chapter 4
METHODS OF PRIVATISATION
Article 16. Methods of Privatisation
1. Privatisation methods shall be as follows:
1) public subscription for shares;
2) public auction;
3) open tenders;
4) sale of state and municipal property by direct
negotiations;
5) lease with the option to purchase.
2. Privatisation Agency shall have the right, upon co-
ordinating with the founder of the enterprise, to change the
method of privatisation in the process of privatisation or to
apply a combination of methods provided by this Law. The change
of privatisation method must be approved at the Privatisation
Commission, and information about the privatisation object must
be announced in the manner specified in Article 14 of this Law.
3. Implementation procedure of privatisation methods
regulated by this Law and the forms of the privatisation
documents shall be established by the Government of the Republic
of Lithuania.
Article 17. Public Subscription for Shares
1. Public subscription for shares is a method of selling of
shares where the shares are sold in an open manner, i.e. neither
the number of purchasers nor the number of shares subscribed by
them is limited, and the selling price of the shares is
determined according to the supply and demand ratio.
2. When shares of stock companies are sold at National Stock
Exchange, they shall be sold through a state (municipal)
brokerage company in conformity with the rules established by
this stock exchange.
When applying the method of the public subscription for
share and when the shares are not sold at the National Stock
Exchange, the founder of the enterprise must:
1) prepare and publish the prospectus of the privatisation
object in compliance with the requirements set by the Securities
Commission, which are applied to the prospectus of securities ;
2) announce in the Information Bulletin of Privatisation and
at the place where the shares are being sold, the nominal and
issue price of shares, their number, the place, time, and the
beginning and end of the subscription for shares.
Article 18. Public Auction
1. Public auction is the method of selling of the
privatisation object, when the number of privatisation subjects
participating in the auction is unlimited and the purchaser shall
be that bidder who offers the highest price.
2. The purchaser shall acquire the right of ownership to the
purchased property when he:
1) pays the price offered at the auction in compliance with
the provisions of this Law;
2) fulfils or obligates under the agreement to fulfil all
terms and conditions of the acquisition of property that were
known to him or had to be known to him prior to the auction;
3) the acquired property is registered in the event such
registration is required by other laws of the Republic of
Lithuania or the Government Decrees.
3. Privatisation Agency must present to the public auction
all shares held by the state or municipality in a stock company
or close stock company that is being privatised.
Article 19. Open Tender
1. Open tender is the transfer of one or more privatisation
objects to the tenderer who is recognised winner in accordance
with the procedure established by this Law and offered the
highest price, having taken into account his written proposals as
to further operation of the enterprise and which meet the
requirements of the tenders, announced in advance.
The right of ownership to the privatisation object shall
pass to the winner of the tender upon the coming into effect of
the privatisation transaction. The privatisation transaction must
establish the obligations of the winner of the tenders, which
must be in full conformity with his previous tender proposals.
2. The method of open tender may be applied in privatising
the enterprises controlled by the state (municipality) the value
of which, determined pursuant to Article 12 of this Law, exceeds
50 000 Lt, as well as in privatising shareholdings in these
enterprises where the shareholding comprises more than 10 percent
of the statutory capital of the enterprise controlled by the
state (municipality) that is being privatised, or when
shareholdings of several enterprises are sold under the same
privatisation transaction.
Article 20. The Selling of the State and Municipal
Property through Direct Negotiations
1. The selling of privatisation object through direct
negotiations is such a method of privatisation when privatisation
transaction is concluded with one purchaser in the event only one
purchaser takes part in a public auction or open tender.
2. Direct negotiations may also be applied when the offers
of other purchasers do not meet the privatisation conditions
announced in advance.
3. Once direct negotiations are initiated, the new terms and
conditions of privatisation must be announced in accordance with
the procedure established in Article 14 of this Law, as well as
the time limit within which other privatisation subjects may
submit their offers.
Article 21. Lease with an Option to Purchase
1. Privatisation object shall be sold by this method by
announcing open tender for the lease of this object. The
provisions of this law shall not apply to those natural and legal
persons who lease any state-owned or municipal property not in
compliance with this Law.
2.Privatisation subject shall acquire the right of ownership
to the privatisation object only after he pays for this object
the full price and fulfils the conditions of acquisition of this
object, set forth in the privatisation transaction.
3. Lease period shall be established in the privatisation
transaction, but it may not exceed 25 years.
4. The amount of annual rent shall be established in the
privatisation transaction, but it may not be less than the amount
calculated in the manner provided for in Article 12 of this Law,
divided from the period of lease. Privatisation transaction must
stipulate that the unpaid balance of the value of the
privatisation object, if it must be paid in litas, each year
shall be adjusted according to the annual market price index.
When the payment for the privatisation object is made in
other currency than that specified in Article 22 of this Law,
this amount shall be adjusted according to the market price index
of the country the national currency of which is used for the
payment.
5. Privatisation transaction must stipulate that the payment
for the privatisation object shall be made by applying one of the
following methods:
1) by paying the rent only;
2) by paying the rent and upon the expiration of the lease,
by purchasing out the privatisation object.
6. Privatisation transaction must stipulate that:
1) if the rent is not paid when due, an interest of 0.5
percent shall be paid for each over-due day. If the amount of
arrears exceeds the amount which must be paid by the
privatisation subject for 6 month period, and (or) the period of
indebtedness for the rent due exeeds 6 months, the lease shall be
terminated and the sum paid shall not be refunded;
2) the lessee must insure the leased property;
3) the lessor shall have no right to sub -lease the leased
property without the prior consent of the founder of the
enterprise;
4) the lease shall be terminated and the payment shall not
be refunded if the terms and conditions provided for in the
privatisation transaction are not met with.
7. The model form of lease with the option to purchase shall
be established by the Government of the Republic of Lithuania.
Article 22. Payment for the Privatisation Object
1. Privatisation subjects may pay for the privatisation
objects acquired by them only in the national currency of
Lithuania -litas, and privatisation subjects which are registered
abroad -in litas, US dollars, German marks, French francs and
British pounds.
2. The procedure and the time limits for the payment shall
be set forth in the privatisation transaction. The payment may be
made in instalments but the final payment may not be postponed
until later than the period of 5 years. When this payment is
postponed, the privatisation transaction must contain a clause
indicating the interest rate and the procedure for the payment
thereof. If the privatisation object is paid for by a Lithuanian
natural person or a group thereof, pursuant to the "Law of the
Republic of Lithuania on the Declaration of Property and Income
of Individuals", a certificate issued by the State Tax
Inspectorate must be presented.
Article 23. Obligations of the Privatisation Subject
under Privatisation Transaction
1. Privatisation transaction under which the enterprise
controlled by the state (municipality) is being privatised, must
include the obligation of the purchaser (purchasers) not to
reduce the number of jobs in the enterprise by more than it is
allowed under the laws of the Republic of Lithuania.
2. Privatisation transaction which is concluded by open
tender must include the obligation of the purchaser (purchasers)
to invest into the enterprise controlled by the state
(municipality) being privatised or other spheres of Lithuanian
economy.
3. The Privatisation Agency or any other institution,
authorised by the municipality, may request to include in the
privatisation transaction the obligations of the purchaser not to
liquidate, pledge, donate, mortgage, or exchange the privatised
enterprise, use its assets as a collateral , suspend its
operations, or sell the shares of the privatised enterprise until
the purchaser fulfils all the terms and conditions established by
the privatisation transaction. Privatisation transaction may
provide for other obligations of the purchaser as well.
4. If the privatisation subject starts to manage and operate
the privatisation object under the privatisation transaction
prior to the acquisition of ownership rights to that object,
privatisation transactions must provide for the conditions
ensuring the possibility for the founder of the enterprise to
control the activities of the privatised object.
5. Privatisation transaction must provide for the sanctions
against the purchaser for non-fulfilment of the undertaken
obligations (fines or deprivation of shares) and (or) guarantees
(by indicating the guarantor who would compensate for the losses
incurred by the Republic of Lithuania).
Chapter 5
FINAL PROVISIONS
Article 24. International Agreements
In the event the international agreements of the Republic of
Lithuania establish other rules regulating the conclusion and
enforcement of transactions or if privatisation transactions
provide for other conditions of the fulfilment of obligations,
the provisions of international agreements shall apply.
Article 25. Coming into Effect of this Law
1. This law comes into effect as of 15 September 1995.
2. Upon coming into effect of this Law, the Law on the
Initial Privatisation of State Property (LIPSP) of the Republic
of Lithuania shall remain in force to the extent of its
applicability to the privatisation of state property included in
the privatisation programmes that were prepared under the LIPSP.
3. By 1 September 1995, the Government of the Republic of
Lithuania shall establish the Lithuanian State Privatisation
Agency within the Government of the Republic of Lithuania and
approve its statutes.
I promulgate this Law passed by the Seimas of the Republic
of Lithuania.
Algirdas Brazauskas
President of the Republic
Vilnius
4 July 1995
No. I-1001