Republic of Lithuania                                           
                                                                                
                               Law                                              
                                                                                
        On the Initial  Privatization of  State  Property                       
                                                                                
                                                                                
                            Chapter 1                                           
                                                                                
                                                                                
                        General Provisions                                      
                                                                                
     Article 1. The Objective of this Law                                       
                                                                                
     1. This  law shall  regulate the  initial  privatization  of               
manufacturing industries, construction industry, transport, power               
engineering,  commerce,  consumer  service  and  public  catering               
establishments as  well  as  institutions  of  culture,education,               
pharmacy, medicine  and rehabilitation  run on  commercial basis,               
and  of   other  stateowned   property  (hereinafter  state-owned               
property subject  to privatization  shall be  refferred to by the               
term "object of privatization").                                                
     2. The procedure and terms for the privatization of land and               
other natural  resources,  agriculture,  forestry,  communication               
establishments or  their property,  dwellings belonging  to State               
and public  housing funds  shall be  established by other laws of               
the Republic of Lithuania.                                                      
     3. This  law shall  not regulate the restoration of property               
rights  of  natural  persons  whose  property  was  nationalized,               
confiscated or  otherwise taken  into public sector against their               
will.                                                                           
                                                                                
     Article 2.Further privatization of state enterprises under                 
               the Law on State Enterprise                                      
                                                                                
     1. Pursuant  to the  Laws on Initial Privatization of State-               
owned Property,  state enterprise  can be  privatized only  once.               
Enterprises can  be further  privatized under  the Law  on  State               
Enterprise of the Republic of Lithuania only if they have already               
been privatized  under the  Law on  the Initial  Privatization of               
State-owned Property of the Republic of Lithuania.                              
     2. Under  the Law  on State Enterprise, enterprises shall be               
sold to  private owners  only for  Lithuanian currency (litas) or               
for any  other convertible  currency according to the established               
exchange rate  if it is not otherwise provided by the laws of the               
Republic of Lithuania.                                                          
                                                                                
     Article 3. Information relating to privatization                           
                                                                                
     1. During  the period  of privatization,  special periodical               
publications --  information bulletins  of privatization -- shall               
be issued.                                                                      
     2. Publishing  procedure and  periodicity of  statewide  and               
local government information bulletins of towns (districts) shall               
be established by the Government of the Republic of Lithuania.                  
     3. When  privatization of  an object  is being  announced in               
relevant information  bulletins, they  must contain the following               
economic  and   technological  data   concerning  the  object  of               
privatization:                                                                  
     1) type of business;                                                       
     2) the amount and structure of authorised capital;                         
     3) the amount of loan capital;                                             
     4) an  enterprise's profitability over the preceding yearand               
the anticipated  profitability   in  the  coming  year  (a  ratio               
between balance profit and business capital);                                   
     5) the  proportion of imported machinery in the active fixed               
assets;                                                                         
                                                                                
     6)  annual   production  volume   (annual   turnover),   the               
proportion of goods produced (services rendered) for export;                    
     7) the  number of  employees and the number of workers among               
them;                                                                           
     8) supply  structure of  basic materials  and raw  materials               
from the USSR and other foreign countries.                                      
     On the  decision of  the  Central  Privatization  Commission               
other information  bearing upon the manner of privatization of an               
object shall be also included therein.                                          
     4. The  list of  all objects subject to privatization in the               
Republic of Lithuania and the programmes of privatization as well               
as data specified by this law must be published in advance in the               
national information bulletin.                                                  
                                                                                
                                                                                
                            Chapter 2                                           
                                                                                
                                                                                
                     Bodies of Privatization                                    
                                                                                
     Article 4. The Structure of the Bodies of Privatization                    
                                                                                
     1.The  privatization   of  state-owned   property  shall  be               
implemented  by  the  Central  Privatization  Commission  and  by               
privatization commissions  of towns  and districts subordinate to               
it, on  the basis  of this  and other  laws of  the  Republic  of               
Lithuania. Where  the wording  of this law is applied both to the               
Central  Privatization   Commission  and   to  the  privatization               
commissions of  towns  and  districts,  the  term  "privatization               
commissions" shall be used.                                                     
     2. The  Central Privatization  Commission shall be appointed               
or dissolved  by the Supreme Council of the Republic of Lithuania               
on the  recommendation of  the Prime  Minister of the Republic of               
Lithuania. Privatization commissions of towns and districts shall               
be appointed by the Government (executive branch) of the Republic               
of Lithuania  on the  recommendation of  the  presidiums  of  the               
councils  of   local  governments   of  higher   level.  On   the               
recommendation  of   the  Central   Privatization  Commission,  a               
representative thereof may be appointed to these commissions. The               
procedure for  the formation and functioning of these commissions               
shall be  established by the Government (executive branch) of the               
Republic of Lithuania.                                                          
     3. Privatization  agencies shall  be established under local               
governments of  higher level.  They shall  be financed out of the               
resourses received  by local  governments of higher level through               
the privatization of state-owned property.                                      
     4. Privatization  commissions and  agencies shall  be formed               
only for  a specified  period of  time deemed  necessary for  the               
implementation of  the objectives  prescribed by  this law. These               
commissions and  agencies shall be dissolved on the decision of a               
body that has formed them.                                                      
                                                                                
     Article 5. The powers of privatization commissions                         
                                                                                
     1. The  powers of the Central Privatization Commission shall               
be specified by this law and by other legislative acts. Decisions               
adopted by the Central Privatization Commission shall be executed               
by those  Ministries of  the  Republic  of  Lithuania  under  the               
supervision  of   which  is   an  object   of  privatization,  by               
privatization  commissions   of  towns   (  districts)   and   by               
privatization  agencies  of  local  governments  as  well  as  by               
administrative bodies of enterprises subject to privatization.                  
     2. On  the recommendation  of a general meeting (conference)               
of employees  of relevant Ministries of the Republic of Lithuania               
or of  enterprises, the  Central Privatization  Commission  shall               
approve privatization  programmes of  objects, with the exception               
of objects  that are under the jurisdiction of local governments,               
as well  as national  privatization programme,  and shall control               
the implementation  of these  programmes.  Preparations  for  the               
privatization  of   objects  that   are  under   the   Republic's               
jurisdiction  shall   be  made  by  relevant  Ministries  of  the               
Republic.                                                                       
     3. Privatization  commissions of  towns (districts),  having               
coordinated the  objects  selected  for  privatization  with  the               
Central Privatizaton  Commission, shall  work  out  privatization               
programmes of  objects that  are under  the jurisdiction of local               
governments, and  in  conjunction  with  the  councils  of  local               
governments  shall   control  how   these  programmes  are  being               
implemented.                                                                    
     4. Privatization commissions of towns (districts) shall have               
the  right   to  give   directions  concerning   the  issues   of               
privatization  to  those  departments  of  the  boards  of  local               
governments under the jurisdiction of which is the object subject               
to privatization,  as well  as  to  agencies  and  administrative               
bodies of  enterprises under  privatization which  are under  the               
jurisdiction of local governments.                                              
     5. Relevant  privatization commissions or authorised by them               
administrative bodies  of enterprises  subject  to  privatization               
shall issue  certificate of ownership to persons who have aquired               
the object  under privatization (shares), after the result of the               
auction or  of the  subscription for  shares have  been  affirmed               
according to the procedure established by this law.                             
     6.In addition  to powers  provided by  this law,  a relevant               
privatizaton commission shall have the right :                                  
     1) in  cases specified  by this  law to  discount the object               
under privatization  ( to  reduce its intitial selling price), if               
the shares  have not been subscribed for or if the object was not               
sold in  the repeated  auction. This provision shall not apply to               
the selling of objects designated as cultural heritage;                         
     2) to compel an enterprise to purchase wholly or in part the               
state capital which it has available;                                           
     3) to  sell out the shares of an enterprise which the bodies               
of the  state power and government have available pursuant to the               
rules established by this law.                                                  
                                                                                
     Article 6. Rights and duties of privatization agencies                     
                                                                                
     1. In  their  activities  privatization  agencies  shall  be               
guided by  laws of  the Republic  of Lithuania, by the decrees of               
the Supreme Council and the Government (executive branch), and by               
the directives of relevant privatization commissions.                           
     2. Privatization  agencies shall  accumulate information  on               
the objects  subject to privatization in towns (districts) and in               
the  Republic   in  general,  shall  organize  auctions  and  the               
subscription  for   shares,  and   shall  arrange   privatization               
documents.   After an  auction was  held or after the shares were               
subscribed for,  a privatization  agency shall  within five  days               
furnish relevant  documents to   a  local government  and  to  an               
enterprise  under   privatization,  as  well  as  to  a  relevant               
privatization commission  that affirms  the results of an auction               
or of  the subscription  for shares.  Results pertaining  to  the               
objects which  are under  the jurisdiction  of local governments,               
shall be  approved  by  the  privatization  commission  of  towns               
(districts), whereas  the results  pertaining  to  other  objects               
shall be affirmed by the Central Privatization Commission.                      
     3. Privatization  agencies must  enable each person enjoying               
the right  to purchase an object (shares) under privatization, to               
get  aquainted   with  the   general  list   of   objects   under               
privatization in  the Republic and with the list of objects under               
privatization in towns (districts ) as well as with their initial               
selling (subscription  for shares)  price, economic condition and               
programmes of privatization.                                                    
     4. Appeals  against the  unlawful actions  of  privatization               
agencies may  be filed  with a  privatization commission  of town               
(district) within  10 days  after the violation was uncovered but               
not later  than within  20 days  from the  date the violation was               
committed. A  privatization commission  must consider  the appeal               
within 7  days, and  within 3  days it  must notify the appellant               
about its  decision. If  the appelant  is not  satisfied with the               
decision, he  may file  within 10  days an  appeal  against  such               
decision with  the Central  Privatization Commission. None of the               
provisions of  this  part  shall  be  applied  when  criminal  or               
administrative actions are instituted  against guilty persons.                  
     5. Upon  the termination  of privatization  agencies , their               
employees shall  have the right to get a job at  a previous place               
of employment  or  they  shall  be  employed  at  state  (  local               
government) institutions and organizations, with the exception of               
cases when  a privatization  agency was  dissolved  or  when  its               
separate employees  were dismissed  from posts  for the  improper               
performance of their duties or violation of law.                                
                                                                                
                                                                                
                            Chapter 3                                           
                                                                                
                                                                                
              Objects and Subjects of Privatization                             
                                                                                
     Article 7. Object of Privatization                                         
                                                                                
       1.   An  object   of   privatization   means   enterprise,               
institution, building  or any  other state-owned  property  drawn               
into privatization programmes. The following objects shall not be               
liable for privatization :                                                      
     1) an  enterprise that  was not  re-registered in accordance               
with the  laws  of  the  Republic  of  Lithuania  regulating  the               
activities of enterprises;                                                      
     2) separate  fixed assets  (active assets)  of an  operating               
enterprise, with  the exception  of those  fixed assets  the list               
thereof shall be established by the Government (executive branch)               
of the Republic of Lithuania;                                                   
     3) the property of the citizens of the Republic of Lithuania               
which was  nationalised, confiscated  or otherwise  against their               
will transferred to the ownership of the state without awarding a               
compensation, and  which may be returned to its owners or persons               
to whom the ownership has been transferred;                                     
     4) the  state-owned property  that was  not re-appraised  in               
accordance  with   the  rules   established  by   the  Government               
(executive branch) of the Republic of Lithuania.                                
     2. The  list of  objects under  privatization  sold only for               
convertible currency, shall be approved by the Supreme Council on               
the recommendation  of the  Government (executive  branch) of the               
Republic of Lithuania.                                                          
     3. Pursuant  to the  decrees of  the  Government  (executive               
branch )  of the  Republic of  Lithuania as  well as  directives,               
adopted by  local governments of the higher level on the basis of               
these decrees, also other objects that are under the jurisdiction               
of the  Government or local governments  may be designated as not               
liable for privatization. It may also be established that certain               
enterprises can operate only as state enterprises.                              
     4. Objects  of culture  and  education  can  be  drawn  into               
privatization programmes  only upon  the approval of the Ministry               
of Culture and Education of the Republic of Lithuania; objects of               
nature protected by the state,as well as sites can be included in               
privatization programmes only upon the approval of the Department               
of Environmental  Protection of  the Republic of Lithuania, after               
the list  of said  objects has  been approved  by the  Government               
(executive branch) of the Republic of Lithuania.                                
                                                                                
     Pharmaceutical amd  medical institutions  can be  drawn into               
privatization programmes  only upon  the approval of the Ministry               
of Health  of the Republic of Lithuania, transport enterprises --               
upon the approval of the Ministry of Transport, objects of energy               
-- upon the approval of the Ministry of Energy.                                 
     Objects of landscape, urbiculture, architecture, archeology,               
history and art, built (or created) before 1940, as well as other               
objects which,  according to the established procedure, have been               
designated  as   protected  by  the  state,  can  be  drawn  into               
privatization programmes  and appraised only upon the approval of               
the Cultural  Heritage Inspectorate  of the Republic of Lithuania               
and the Department of Environmental Protection.                                 
     5. Protection  and maintenance  contracts shall be concluded               
with persons  who shall  acquire objects  of privatization  which               
according  to   the  procedure   established  by  law  have  been               
designated as objects of cultural heritage.                                     
     6.  Objects   must  be   prepared   for   privatization   by               
administrative bodies  of  enterprises  and  institutions,  their               
founders, or  by other bodies of state power and government under               
the  jurisdiction   of   which   is   the   object   subject   to               
privatization.The  following   documents  must  be  prepared  for               
objects under privatization:                                                    
     1)  certificate   of  property   re-appraisal  drawn  up  in               
accordance with  the rules  established by  the Government of the               
Republic of Lithuania;                                                          
     2)  certificate  issued  by  the  board  of  an  enterprise,               
testifying to  the authorised  capital of  a state  enterprise  (               
state joint-stock  enterprise) and  its  structure,  as  well  as               
justifying the formation of share capital;                                      
     3)  other   information  bearing   upon  the  objects  under               
privatization specified by this law.                                            
     7. Monopolistic  enterprise the  goods and services of which               
supplied for  national or  local market  account for more than 50               
percent of  this market  output, when  being privatized  must  be               
subdivided into  separate objects  of  privatization  (if  it  is               
possible from  the technical  point of  view). If  an  enterprise               
cannot be  subdivided, the  procedure for its privatization shall               
be established by the Central Privatization Commission.                         
     8.  A  board,  council  of  observers,  or  general  meeting               
(conference)  of   an  enterprise   that  is   not   liable   for               
privatization, shall  have the  right to  recommend to a relevant               
privatization commission  to privatize  the  said  enterprise.  A               
privatization commission must within 2 months make a decision and               
notify the said enterprise thereof.                                             
                                                                                
     Article 8. Re-appraisal of Objects Subject to Privatization                
                                                                                
     1. The object under privatization shall be re-appraised (the               
residual value  shall  be  re-appraised  )  by  the  inventorying               
commission formed in accordance with the procedure established by               
the Ministry  of Finance of the Republic of Lithuania. The act of               
property re-appraisal  ( the amount of authorised capital ) shall               
be  signed   by  the   managing   director   of   an   enterprise               
(institution),chief accountant  (book-keeper),  chairman  of  the               
board of observers (auditing commission) and representative of an               
inventorying commission, and it shall be approved by the founder.               
If an  object under  privatization has  no administrative bodies,               
its re-appraisal  act shall  be signed  and approved  by  persons               
authorized by  the body of state power and government under whose               
juridiction  is   an  object   of  privatization.  An  object  of               
privatization shall be re-appraised (the amount of its authorized               
capital shall  be reassessed  ) in  accordance with the procedure               
established by  the Government (executive branch) of the Republic               
of Lithuania and the regulations established in advance.                        
     2. The price of objects designated as cultural heritage,that               
is assessed  on the basis of its residual value, may be increased               
by the  group of  experts appointed  by  the  Government  of  the               
Republic of  Lithuania on  the  recommendation  of  the  Cultural               
Heritage Inspectorate of the Republic of Lithuania.                             
     3. The  initial price  (the amount of authorized capital) of               
objects of privatization which are included in a special list and               
shall be  sold only  for freely  convertible currency pursuant to               
the procedure  established by  this law,  may be increased by the               
Central Privatization  Commission on the basis of the conclusions               
submitted by  the commission  of experts formed by the Government               
of the Republic of Lithuania.                                                   
      4.  After an enterprise has been privatized under this law,               
the amount  of  state-owned  capital  cannot  be  re-assessed  or               
otherwise adjusted by changing property value of this enterprise.               
     5. The  Ministry of  Finance of  the Republic  of  Lithuania               
shall have  the right  to compel  to repeat  stock-taking  of  an               
enterprise and  readjustment of  the  amount  of  its  authorised               
capital.                                                                        
                                                                                
     Article 9.Persons Enjoying the Right to Acquire Property                   
               Subject to Privatization                                         
                                                                                
     1*.Objects of privatization (shares ) may be acquired by the               
citizens of  the Republic  of Lithuania. This provision shall not               
apply in  acquiring appartments  that belong  to state and public               
housing funds.                                                                  
     2. Legal  persons cannot  acquire objects  of  privatization               
(shares) for roubles.                                                           
     3. Natural  and legal persons of the Lithuanian and of other               
states shall  have the  right to  acquire for  freely convertible               
currency objects  of privatization (shares) included in a special               
list  approved   by  the  Supreme  Council  of  the  Republic  of               
Lithuania.                                                                      
     4. Objects  of privatization  (shares) cannot be acquired by               
the institutions  of sate power and government, state enterprises               
and state  joint-stock companies,  enterprises, institutions  and               
organizations  financed   out  the  budget  of  the  Republic  of               
Lithuania or of local government budgets.                                       
                                                                                
     Article 10. Representation                                                 
                                                                                
     A natural  person ( a group of them) shall have the right to               
authorize another person by the notarised authorization who would               
represent him  at auctions  or subscriptions for shares and would               
perform appropriate  legal actions.  Members of  boards of  local               
governments,  officers   of  ministries  or  other  state  (local               
government) institutions,  employees of  privatization  agencies,               
members of  privatization commissions,  as well as members of the               
board and  of  the  observers  council  of  an  enterprise  under               
privatization, manager of its administration and chief accountant               
(book-keeper)  cannot   act  as   authorised   persons   if   the               
authorization  is   related  with   the  privatization   of  this               
enterprise. Representation  relations shall  be regulated  by the               
civil code of the Republic of Lithuania.                                        
                                                                                
                                                                                
                            Chapter 4                                           
                                                                                
                                                                                
      Payments for the  Purchased  Object of Privatization                      
                                                                                
     Article 11.Means of and Procedure for payment in purchasing                
               an object of privatization                                       
                                                                                
     1. Objects  of privatization  shall be  sold for  investment               
vouchers allocated  by the state in accordance with the procedure               
set forth  in Article  12 of  this law,  for money  valid in  the               
Republic of  Lithuania or for freely convertible currency as well               
as for  supplementary compensations earmarked for special purpose               
and  allocated   pursuant  to  other  laws  of  the  Republic  of               
Lithuania.                                                                      
     2. Every person who  under Article 9 of this law is entitled               
to  the   right  to   acquire  state-owned  property  subject  to               
privatization, for  the acquisition thereof shall be permitted to               
use money  (roubles). Their  quotas shall  be determined  by  the               
resolution of  the Supreme  Council of  the Republic of Lithuania               
"On the Comming into Force of the Law on Initial Privatization of               
State-owned Property".  A person  may delegate this right only to               
his spouse,  parents, children,  brothers or  sisters.   Sums  of               
money expended  by the tenants for the acquisition of appartments               
belonging to  state or public housing funds shall not be included               
into the fixed money quotas. If a person has deliberatly violated               
money quota determined for investment, unlawfully invested sum of               
money shall  be recovered  according to the procedure established               
by law  and payed  into the  state  Budget  of  the  Republic  of               
Lithuania. The Central Privatization Commission shall approve the               
list of  objects of  privatization which  shall be  sold  without               
applying money (rouble) quotas. In this list can be included only               
those objects of privatization which remained unsold according to               
the procedure established by this law.                                          
     3.  If   an  object  of  privatization  is  being  purchased               
according to  the procedure  established by  this law  for freely               
convertible currency, money quotas shall not be applied.                        
     4. An  object of  privatization  (shares)  may  be  sold  by               
installments  according  to  the  procedure  established  by  the               
Ministry of Finance, applying lower rate of interest.                           
     5. For  persons who have been allocated  one-time investment               
vouchers  or   other  compensations,shall  be  opened  investment               
accounts with  a bank,  where sums of one-time allocations and of               
other supplementary  compensations payed  in accordance  with the               
laws of  the Republic  of Lithuania,  shall be  deposited.  Money               
(roubles) utilized  for investment according to the fixed quotas,               
shall be  placed to  the same  investment accounts. Sums of money               
(roubles) held  in the  investment account,  which have  not been               
expended  on  the  acquisition  of  an  object  of  privatization               
(shares), shall be transferred to the current accounts of persons               
who have deposited them.                                                        
     6. The  regulations governing  the management  of investment               
accounts and  payments  for  the  acquisition  of  an  object  of               
privatization, shall be established by the Ministry of Finance of               
the Republic of Lithuania and the Bank of Lithuania.                            
                                                                                
     Article 12.Terms and procedure for the allocation of one-                  
               time investment vouchers and agrarian                            
               compensations.                                                   
                                                                                
     1.* One-time  investment vouchers  shall account  for 2/3 of               
the value of property subject to privatization.  2/3 of the value               
of the  total state-owned  property ( with the exception of land)               
shall be  privatized. The  one-time investment  vouchers shall be               
allocated to all the citizens of the Republic of Lithuania in the               
following portions:                                                             
     1) for  persons who  on the  31st of  December,1991 were  35               
years of age--5 portions;                                                       
     2) for  persons who  on the  31st of  December, 1991 were 30               
years of age--4portions;                                                        
     3) for  persons who  on the  31st of  December, 1991 were 25               
years of age--3 portions;                                                       
     4) for  persons who on the 31st of December were 18 years of               
age--2 portions;                                                                
     5) for  persons who on the 31st of December, 1991 were under               
18 years of age--1 portion. If one of the parents of a person was               
dead by  the 31st  of December,  1991, the  said person  shall be               
allocated the  investment voucher  under subparagraph  3, and  if               
both parents  were dead,  he shall  be  allocated  an  investment               
voucher under subparagraph 1 of this paragraph;                                 
     6) the  invalids of  Group 1 and 2, regardless of their age,               
shall be  allocated investment  vouchers under  subparagraph 1 of               
this paragraph.                                                                 
     One-time investment vouchers shall not be allocated to :                   
     1)  persons  found  to  have  repeatedly  committed  serious               
crimes;                                                                         
     2) wards  of the state found legally incapable and having no               
guardians.                                                                      
     A  monetary   expression  of   one  portion  of  a  one-time               
allocation shall  be computed  and  approved  by  the  Government               
(executive branch  ) of  the  Republic  of  Lithuania  under  the               
provisions set forth hereby.                                                    
     2. Having  taken into  consideration the  difference between               
the average  wages of persons employed in national economy and of               
persons employed  in agriculture  , persons  who were employed in               
agriculural sector after 1944 as well as persons who are employed               
in agriculture at the present moment, pursuant to the appropriate               
laws of  the Republic  of Lithuania shall be allocated additional               
agrarian compensations (agrarian vouchers).                                     
     3. A  person who  has been  allocated a  one-time investment               
voucher or  other compensation,  can  transfer  it  only  to  his               
spouse, parents,  children, brothers  or sisters,  by  depositing               
these funds  into their investment accounts. These allocations or               
compensations  shall  be  inheritted  according  to  the  general               
procedure.                                                                      
     4. The  procedure for  the allocation of one-time investment               
vouchers  shall  be  established  by  the  Government  (executive               
branch) of the Republic of Lithuania.                                           
                                                                                
     Article 13.The utilization of one-time allocations or                      
               compensations earmarked for a special purpose                    
                                                                                
     1. One-time  allocations or  other  compensations  shall  be               
utilized only for the acquisition of objects of privatization (or               
shares), if  the laws of the Republic of Lithuania do not provide               
otherwise.                                                                      
     2. A  person upon  acquisition of an object of privatization               
(or shares)  for a  one-time investment voucher, must pay in cash               
for  5 percent of the value of the acquired property.                           
     3.The Government  of the Republic of Lithuania shall fix the               
term  for  the  utilization  of  one-time  allocations  or  other               
compensations  for  acquiring  an  object  of  privatization  (or               
shares) and  shall make it available to the public no less than 3               
months before  the end  of the term. Within this period the funds               
of one-time  allocations and  other compensations  which had  not               
been utilized by the citizens, shall be converted into terminable               
government (local  government ) registered bonds according to the               
procedure and  rate established by the Government of the Republic               
of Lithuania  if the  laws of  the Republic  of Lithuania  do not               
provide otherwise.  The Government (local government) shall repay               
the bond on maturity and on demand of a bondholder or his heir.                 
     4. A  holder of  shares or  of registered  government (local               
government) bonds  acquired for  one-time  allocations  or  other               
compensations shall  have no  right to sell or otherwise transfer               
them to the ownership of other person prior to July 1, 1992, with               
the  exception  of  their  conveyance  to  his  spouse,  parents,               
children, brothers  or sisters.  Such shareholders  may be  payed               
thedividends in  cash only  on and  after January 1, 1992, if the               
laws of the Republic of Lithuania do not provide otherwise.                     
                                                                                
                                                                                
                            Chapter 5                                           
                                                                                
                                                                                
              The Sale of Objects of Privatization                              
                                                                                
     Article 14. Methods of Initial Privatization                               
                                                                                
     1. By  virtue of  this law the state-owned property shall be               
privatized by:                                                                  
     1) selling the objects subject to privatization at auctions;               
     2) announcing public subscription for shares.                              
     2. An object of privatization (or shares) shall be sold to a               
natural person  by the  right of  private property, to a group of               
natural persons  by the  right of  common shared  property or  to               
spouses by theright of common joint property.                                   
     3. An  object of  privatization the initial selling price of               
which exceeds  500 000  roubles shall  be sold only by announcing               
public subscription for shares. This provision shall not apply to               
objects sold  for freely convertable currency. The sum of nominal               
values of issued bonds must be equal to the amount of state-owned               
capital (or  to its  portion subject  to  privatization)  of  the               
object under  privatization computed according to the regulations               
established by the Government of the Republic of Lithuania.                     
     4. State  joint-stock and state enterprises possessing share               
capital  shall   be  privatized   only   by   announcing   public               
subscription for shares.                                                        
     5. If a functioning enterprise is being privatized in whole,               
i.e. not  divided into  separate objects  of  privatization,  the               
natural persons  who have  acquired it  as  well  as  enterprises               
founded by  them, shall  take over  all rights and obligations of               
the acquired  enterprise. If  the functioning enterprise is being               
privatized by splitting it into separate objects of privatization               
which may  function  as  separate  enterprises,  the  rights  and               
obligations  of   an  enterprise  under  privatization  shall  be               
distributed among  the owners  of privatized objects according to               
the regulations  established by the Government of the Republic of               
Lithuania. The Government shall be entitled to repay the whole or               
a portion of the loans of an enterprise under privatization.                    
     6.  Shares   of  an  enterprise  hold  by  state  power  and               
government bodies,  shall be  sold only  by announcing  a  public               
subscription for  shares in  the manner set forth by this law. If               
such shares  are sold in 1991, a special permission issued by the               
relevant privatization commission must be obtained.                             
     7. The  state-owned property  of a liquidated enterprise can               
be sold  only at  auctions according  to the regulations provided               
for in  Article 16  of this  law.Article 15.  The Utilization  of               
Funds Received through the Selling of Objects of Privatization                  
     1. Receipts  for sold  objects of  privatization (or shares)               
shall be  accumulated in  privatization funds of the Republic and               
of local governments of the higher levels.                                      
     2. The  privatization fund  of the  Republic shall be formed               
from the  moneys received  for sold  objects of privatization (or               
shares) that  are under the jurisdiction of the Government of the               
Republic of  Lithuania and  from the  70  percent  of  the  funds               
received through  the privatization of objects that are under the               
jurisdiction of local governments.                                              
     3. 30  percent of  moneys received through the privatization               
of objects  (or shares)  that are under the jurisdiction of local               
governments, shall  be accumulated  in the privatization funds of               
local governments of the higher level.                                          
     4. The  funds of one-time allocations or other compensations               
used for  the acquisition  of state-owned  property, shall not be               
transferred to the privatization funds.                                         
     5. the  procedure for the utilization of privatization funds               
shall be  established by  the Supreme  Council of the Republic of               
Lithuania.                                                                      
                                                                                
     Article 16. The Procedure for Organizing Auctions                          
                                                                                
     1.  Auctions   shall  be   organised  by   the  agencies  of               
privatization of  local governments.Not later than 20 days before               
the auction  is held,  privatization agencies must provide in the               
information bulletins of privatization the following data:                      
     1) the  name of an object under privatization ( full name of               
an enterprise,its address);                                                     
     2) time and location of an auction;                                        
     3) address,  telephone  number  and  business  hours  of  an               
agencyfor organizing auctions;                                                  
     4) economic and technological data specified in Article 3 of               
this law.The  statewide privatization  bulletin must contain data               
provided for in subparagrapgs 1 and 3 of this paragraph.                        
     2. To  take part  in an  auction may solvent natural persons               
who have  been registered  according to the procedure established               
in advance or groups of persons possessing a notarized foundation               
agreement of  a group.  The agreement  concluded by  a  group  of               
natural persons must contain the following data:                                
     1) full names and addresses of the members of the group;                   
     2) the  amount of  planned investment  (installment) of  the               
members of the group, their other duties and powers;                            
     3) a representative of a group and his authorisation to take               
part in an auction;                                                             
     4) the  terms and  procedure  for  the  utilization  of  the               
property acquired at an auction.                                                
     The property  acquired by  a group  of natural persons shall               
belong by  the right of partial ownership to the persons who have               
concluded an agreement.                                                         
     3. An  auction may  be held if no less than two participants               
have been  registered. Participants  of an  auction must register               
themselves at the agency for organizing an auction not later than               
7 days  before the  auction and must pay 5 percent of the initial               
price of the object they wish to acquire to the account indicated               
by the agency as well as registration fee of 50 roubles.                        
     4. Within  5 days  after the auction, the purchaser must pay               
the difference  between the  price set  at the  auction  (or  its               
obligatory installment  if  the  object  is  being  purchased  by               
installments) and the initial investment. If a purchaser fails to               
settle accounts  when due, the auction shall be considered not to               
have  taken  place  and  the  initial  investment  shall  not  be               
refunded.                                                                       
     5. Pursuant  to the  regulations established by the Ministry               
of Finance  of the  Republic of  Lithuania, a  natural person may               
acquire the  object under  privatization sold  at an  auction  by               
installments.  In  this  case,  the  purchaser  within  the  term               
indicated in paragraph 4 of this Article must pay no less than 60               
percent of the price of the object including one-time allocations               
or other  compensations.  The  Central  Privatization  Commission               
shall be entitled to increase this percentage.                                  
     6. If the initial price at an auction has not been raised by               
at least  5 percent, the contract shall be considered not to have               
been concluded.                                                                 
     7. If  the participants of the auction have not acquired the               
object  of  privatization,  their  initial  investment  shall  be               
refunded within 7 days after the date of the auction.                           
                                                                                
     Article 17.Privatization of State Enterprises by Announcing                
               Public subscription for Shares                                   
                                                                                
     1. The public subscription for shares shall be announced and               
conducted by privatization agencies of local governments on whose               
territory the object under privatization is located.                            
     2. State enterprises and state joint-stock enterprises which               
have no  private share  capital formed  from the  investments  of               
natural persons  or private enterprises, or if it accounts for no               
more than  20 percent  of  their  authorised  capital,  shall  be               
privatized by  issuing shares. Nominal value of shares planned to               
be issued  must account  for 25 percent of the authorised capital               
of an  enterprise under  privatization. The Central privatization               
Commission is  entitled to  change the said percentage (degree of               
privatization).                                                                 
     3.  State  joint-stock  companies  in  which  private  share               
capital accounts  for no  more than  20 percent of the authorised               
capital ,  must  be  drawn  into  privatization  programmes.  The               
percentage of  privatized capital  shall  be  determined  by  the               
managing bodies  of a  company.  They  shall  have  no  right  to               
determine that  less than 30 percent of the state capital held by               
an enterprise  should be  privatized, and  that the part of state               
capital under  privatization together  with its  private  capital               
formed previously  (by other  means) should account for less than               
50 percent of the total authorised capital of an enterprise.                    
     4.When  privatizing  state  capital  under  this  law,  only               
ordinary registered  shares can  be issued.  The sum  of  nominal               
values of  issued shares  must be  equal  to  the  state  capital               
planned to be privatized.                                                       
     5. If  only part  of the  state capital of an enterprise has               
been privatized,  the amount  of the remaining state capital must               
be equal  to the  difference between  the  state  capital  of  an               
enterprise computed under the rules established by the Government               
of the  Republic of  Lithuania and the total nominal value of all               
shares issued (sold) by an enterprise.                                          
     6. An  enterprise  under  privatization  cannot  issue  more               
shares than it was established under the determined degree of its               
privatization. If  more shares  have been  subscribed for than it               
was determined,  and if  pursuant to paragraph 3 of Article 18 of               
this law  the subscription  for shares is considered to have been               
made, the  initial investment  must be  refunded for  persons who               
subscribed for shares last.                                                     
                                                                                
     Article 18. Subscription for Shares                                        
                                                                                
     1. Subscription  for shares and terms for the acquisition of               
shares shall  be given public notice by privatization agencies of               
local government  not later  than 15 days before the subscription               
for shares  begins .  While announcing subscription for shares or               
terms for the acquisition of shares, the following data should be               
included in information bulletins of privatization :                            
     1) the name and address of an enterprise (object);                         
     2) the  authorized capital  of an  enterprise, the number of               
shares planned to be issued and their par value;                                
     3) the initial subscription price ;                                        
     4) the  place, beginning  and completion oft he subscription               
for shares according to different stages;                                       
     5) the economic condition and technical data of an object of               
privatization provided for in Article 3 of this Law.                            
     The data  set forth  in subparagraphs 1-4 of this paragraph,               
shall  be   published  in   statewide  information  bulletins  of               
privatization.                                                                  
     2. Subscription for shares shall be an agreement between the               
state (local  government), represented  by privatization agencies               
and the  natural person or their group, or, in cases provided for               
by this  Law, the legal person. By this agreement one party shall               
bind itself  to supply  with a  certain number of shares, and the               
other party  shall bind  itself to pay full issuance price of the               
of subscribed  shares. The  agreement shall be considered to have               
been concluded  if more  than 80  percent of shares planned to be               
issued have  been subscribed  for and the subscription for shares               
has been approved by the relevant privatization comission.                      
     3. Subscription  for shares shall be made in several stages.               
During the  first stage  which lasts for 30 days, shares shall be               
subscribed for  at their  initial price  fixed by a privatization               
agency.The initial  price for  subscription for  shares shall  be               
higher than  their par  value. If  more than 80 but not more than               
110 percent  of shares  planned to be issued have been subscribed               
for at  their initial  subscription  price,the  subscription  for               
shares shall  be considered  to have  been made. In this case the               
issuance  price   of  shares   shall  be  equal  to  the  initial               
subscription price.                                                             
     4. If  more than  110 percent of planned to be issued shares               
have  been   subscribed  for   at  their  initial  price,  a  new               
subscription for  shares shall  be announced at the initial price               
increased by  not less than 10 percent. In this case every person               
who has subscribed for shares shall have the right to demand that               
his payment would be refunded without any deductions.                           
     5. If  not more  than 80  percent of  shares planned  to  be               
issued are  subscribed for during the first stage of subscription               
, then  their initial price shall be reduced by 10 percent during               
the subsequent  stages of  subscription but  not more  frequently               
than every  10 days, until more than 80 percent of shares planned               
to be issued are subscribed for.                                                
     6. Having  reduced the  price of  shares, persons  who  have               
subscribed for  them earlier  at a  higher price,  must pay  such               
price  at  which  the  last  share  of  an  enterprise  has  been               
subscribed for.  Such price  shall be deemed as issuance price of               
shares. Issuance  price of  shares cannot be lower than their par               
value.                                                                          
     7. A  person shall  have the  right to  refuse shares  until               
announced time limit for subscription for shares has not expired.               
In this  case he  shall be  refunded the  sum he  payed  for  the               
shares, having  deducted from  it 2.5 percent of the par value of               
the subscribed shares into the state budget.                                    
     8. If  not more than 80 percent of shares are subscribed for               
at their  par value,  it is  considered that the subscription for               
shares have  not been  made, and  the  information  bulletins  of               
privatization shall  inform about  this.  In this case a relevant               
privatization commission shall devalue the state property held by               
an enterprise  and not later than within 10 days shall announce a               
new subscription  for shares  or shall adopt a decision to refund               
initial payments  to persons  not later  than within 7 days after               
the time limit for the subscription for shares has expired .                    
     9. Upon  subscribing for shares, not less than 25 percent of               
par value of shares must be payed immediately to the bank account               
indicated by the privatization agency. Not less than 5 percent of               
this sum  must be  payed in  cash. If  the relevant privatization               
commission has  affirmed the subscription for shares, the persons               
who have acquired them must pay within 30 days the total issuance               
price  of   shares.  If   the  shares   are  being  purchased  by               
installments, the  persons who  have acquired  them must  pay the               
total issuance price of shares in two years period.                             
     10. If  shares have  not been  payed for  when due,   on the               
decision of  a relevant  privatization commission  the subscribed               
shares may be annulled and the initial payment may be transferred               
to the relevant fund of privatization. When after the shares have               
been annulled  not more  than 80  percent  of  subscribed  shares               
remain, public  subscription for  the  annulled  shares  must  be               
announced.  Claims   against  the   decisions  bearing  upon  the               
annulment of  shares can be filed within 10 days with the Central               
Privatization Commission.                                                       
     11.   The    subscription   agreement   submitted   by   the               
privatization agency shall contain the following information :                  
     1) the name and address of an enterprise (or object);                      
     2) the  number and  date of the decree adopted by a relevant               
privatization  commission   regarding  the  privatization  of  an               
enterprise (or  object), the amount of private capital planned to               
be accumulated and the amount of the remaining state capital;                   
     3) subscription price;                                                     
     4) full name and address of a subscriber;                                  
     5) the number of subscribed shares.                                        
     12. Having  affirmed the  subcription for  shares and having               
payed their  total issuance price, except in the case when shares               
are purchased  by installments,  accumulated share  capital  (its               
increase) as  well as  state capital  and appropriately  adjusted               
bylaws of  an enterprise  shall be  registered according  to  the               
procedure established by the laws of the Republic of Lithuania.                 
                                                                                
     Article 19.Invalidity of Contracts Concluded at Auctions,                  
               and of .Ssubscriptions for Shares                                
                                                                                
     1. The  court shall find  the contract concluded at auctions               
or subscriptions for shares to be invalid if:                                   
     1) there  was  no  public  notice  of  the  auction  or  the               
subscription for shares;                                                        
     2)  the   object  under   sale  has   not  been  drawn  into               
privatization programmes or was registered not in conformity with               
laws;                                                                           
     3)  participation  by  persons  entitled  to  take  part  in               
auctions or in subscriptions for shares was interfered with;                    
     4) the  object of privatization ( shares) has been purchased               
by a  person who  had no  right to  take part in an auction or to               
subscribe for shares;                                                           
     5) the  object  of  privatization  (shares)  has  been  sold               
violating the  time limit  fixed for conducting an auction of for               
subscribing for shares;                                                         
     6) other  rules governing  the conducting and advertising of               
an auction or subscription for shares have been violated;                       
     7) there  are other  invalidity terms  of contracts provided               
for in the civil code.                                                          
     2. If  the court finds an auction or subscription for shares               
to be  invalid through  the fault  of privatization  agencies  of               
local governments,  all losses   shall be reimbursed by the local               
government of the higher level.                                                 
                                                                                
                                                                                
V. Landsbergis                                                                  
                                                                                
President                                                                       
Supreme Council                                                                 
Republic of Lithuania                                                           
                                                                                
                                                                                
Vilnius                                                                         
28 February,1991                                                                
No. I-1115                                                                      
                                                                                
                                                                                
Note: The law includes all the amendments approved by the Supreme               
Council of  the Republic of Lithuania on 14 March, 1991. They are               
marked by an asterisk*.