Amendments to the Law on the Legal Status of Aliens

The draft amendments to the Law on the Legal Status of Aliens (hereinafter – the Law) aim to ensure more effective control of the migration of the aliens that are posing risk, to reduce the threat of their temporary or permanent residency in Lithuania, as well to establish an order for the urgent issuance of residence permits in the Republic of Lithuania.  

According to the proposed draft law, upon the receipt of the alien’s application for the issue of a residence permit in the Republic of Lithuania the Migration Board shall inquire the State Security Department, the Police Department and the State Border Guard Service in order to assess whether the alien poses a threat to national security, public order or society. The Migration Department shall not issue the residence permit until they receive the findings of the aforementioned authorities. Thus the draft law provides the term of 14 calendar days for the mentioned authorities to provide information. This term can be extended up to 28 calendar days due to important reasons.

The draft law also establishes that the alien seeking to obtain residence permit in the Republic of Lithuania shall provide a list of visited countries and countries where he/she lived, also fill in the questionnaire, as approved by the order of the Minister of Interior, by providing detailed personal information as well as information about the contacts with other persons, foreign intelligence, security and (or) military authorities. It is expected that such regulation will help to ensure that the Migration Board issues residence permits in the Republic of Lithuania only if comprehensive information is available about the alien.

The draft amendments also propose to establish an order for urgent issuance of the residence permits. According to this order when the alien requests the urgent processing of the application, the Migration Board shall adopt a decision to issue a residence permit within a period less than half of maximum period provided in the Law, unless the alien’s application is manifestly unfounded or not all required documents are submitted or the state fee is not paid. Since the legal acts implementing the Law provide for the urgent examination of the applications to issue residence permits in the Republic of Lithuania, these new amendments will allow to ensure that the Law is compatible with them.

The draft amendments to the Law on the Prohibition of Unfair Practices of Retailers 

The new amendments to the Law on the Prohibition of Unfair Practices of Retailers (hereinafter - the "Law") are presented in order to specify and supplement the procedure of investigation of infringement of the Law, it is also proposed to grant the status of executive document for resolutions of the Competition Council imposing fine, and to establish the right of the Competition Council to issue binding instructions, where appropriate.

The draft Law proposes to establish the right of persons involved in the infringement proceedings to get acquainted with the findings of the investigation and submit explanations on the infringement (a minimum period of 14 days shall be determined for the participants of the proceedings to submit explanations on the infringement). It should be noted that such right is not granted in the current wording of the Law.

Taking into account the fact that the current existing wording of the Law only fragmentarily regulates the proceedings of infringement of the Law and its investigation (there is no term determined within which participants of the proceedings must be notified about the hearing of the case, in addition, there is lack of clarification whether witnesses should be involved in the process, and whether the case should be examined publicly, moreover, it is not clear what shall be considered as proper notification on the time and place of the proceedings, etc.), the draft Law proposes to specify the procedure of investigation of infringement of the Law. The period of 3 business days is established for the Competition Council to notify the parties involved in the proceedings about the time and place of the proceedings, a proper notification on the time and place of the proceedings is defined. Also, the amendments provide provision that cases are examined publicly and the parties involved in the proceedings are entitled to offer their witnesses. In addition, the parties and other participants in the proceedings are entitled to interview witnesses, they also have the right to access the investigation material.

The draft Law also provides the prescription period for penalties on the infringement of the Law. It is established the prescription period shall be applied if one year period has passed from the infringement of the Law to the submission of an application to carry out the investigation on infringement and in case the infringement is continuous or ongoing - one year period from the date of discovery of the infringement.   

In order to ensure implementation of resolutions of the Competition Council imposing penalties, the draft Law proposes to establish that the resolution of the Competition Council is considered as an executive document, which shall be implemented in accordance with the Code of Civil Procedure of the Republic of Lithuania.

The draft Law is intended to establish the right of the Competition Council in performing its functions to issue binding instructions to retailers, suppliers, third parties and entities of public administration to provide documents (among others, those which contain commercial secrets) and other information necessary to perform the functions of the Competition Council.

It is proposed to supplement Article 5 of the Law governing the protection of commercial secrets with a new provision, which provides that upon a motivated request of the supplier, who has submitted it to the Competition Counsel to perform an investigation on infringements of the Law, or other documents and information necessary to perform the duties of Competition Council, the identification data of the supplier (natural person‘s name, surname, place of residence, legal entity‘s name, address of the registered office, etc.) shall not be made publicly available and disclosed. It is expected that this provision would make the suppliers more interested in revealing possible violations of the Law and enhance the supervision of the implementation of the Law.

The draft amendments to the Law on Advertising

The amendments to the Law on Advertising (hereinafter - the "Law") suggest to improve the outdoor advertising business and remove the defects found while implementing the Law. It is proposed to accelerate the issuance of permits for installation of outdoor advertising, determine additional cases for suspension of the permit as well as regulate other relevant issues more accurately.

The draft Law proposes to determine that in case the advertising is installed on separate object of commonly used facilities used in order to meet the needs of apartments owners (e.g., a detached building block), it is required to receive the consent of the majority of apartment owners. It is also proposed to determine that the consent of apartments owners is not required if a signboard is installed on external wall of non-residential premises (i.e., shop, barber shop, etc.).

The draft Law also proposes to determine that the permit shall be issued for 10 years after the installation of the signboard, and for 5 years after the installation of another outdoor advertising.

The draft Law proposes to expand the list of entities entitled to issue a permit by establishing that the permits are being issued, suspended, restored, revoked as well as terms for the submission of documents for issuance of permit and the elimination of deficiencies on outdoor advertising are determined by the executive authority of person authorized by municipality.

According to the current provisions of the Law, there is no legal basis not to issue a permit or to suspend it if the operator of advertising activities fails to pay the local fee for the issuance of advertising permit as determined by the municipality (each municipality individually determines local fee for issuance of advertising permits). The draft Law proposes to establish that the permit shall not be issued or it shall be suspended, if the operator of advertising activities fails to pay the local fee. In addition, it is proposed not to suspend the permit in case of minor violations and to allow the operator of advertising activities to eliminate the violation within the term established by the authority issuing the permit.

The draft Law proposes to provide that in case the advertising permit period ends or permit is withdrawn, the operator of advertising activity shall dismantle the outdoor advertising, take down advertising sign and clean up the environment within the term established by the authority issuing the permit, which shall not be longer than 40 business days.

In addition, the draft Law proposes to establish obligation for operator of advertising activity to remove the advertising sign not later than within 20 business days after he ceases his activity at the residence building or at business or service provision location on which the advertising sign is affixed. The mentioned provision has been established in the draft Law in order to avoid consumer misleading. 

Amendments to the Law on Enterprise Bankruptcy

The President of the Republic of Lithuania submitted amendments to the Enterprise Bankruptcy Law (hereinafter – the Law) to the Parliament for consideration which propose to set the time limit within which the head of the enterprise, the owner or other person entitled to make respective decisions will be required to apply to the court for initiation of the enterprise bankruptcy proceedings. In addition, it is proposed to establish liability for non-compliance of the mentioned obligation. The draft Law also aims to provide clearer and more transparent procedure for selling the enterprise’s assets, calculating bankruptcy administration expenses and bankruptcy administrator’s remuneration. 

The draft Law proposes to set the term of one month during which the head, the owner or other authorized person(s) of the enterprise must file with the court a petition for the initiation of bankruptcy proceedings once the enterprise becomes insolvent. The mentioned one month period is counted from the day of the discovery of the grounds for filling with the court of a petition for initiation of enterprise bankruptcy proceedings as provided by the Law. Currently, the heads and the owners of enterprises have an obligation to apply to the court for the initiation of bankruptcy proceedings, however the current wording of the Law does not provide the time limit within which it should be done. The legislator believes that establishment of the mentioned term may cause the higher number of bankruptcy proceedings opened on time and it may also cause decrease of negative consequences for the creditors.  

The draft amendments also propose to establish that the bankruptcy administrator would be required on its own initiative or in accordance with the resolution of the creditor meeting to bring an action on damages in case the person under obligation (the head, owner or other authorized person of the enterprise) does not comply with one month time limit set for filing with the court a petition for the initiation of bankruptcy proceedings when the enterprise becomes insolvent. 

Additionally, according to the draft amendments to the Law the court upon the reasoned request of the bankruptcy administrator or creditors shall decide to restrict the person’s right to hold the position of the head of the enterprise or the member of a collegial management body of the enterprise in case that person: a) has not filed a petition for the initiation of bankruptcy proceedings, b) has not transferred the assets and (or) documents upon the entry into force of the ruling to initiate bankruptcy proceedings, c) has avoided to provide all the information necessary for the bankruptcy process or d) has otherwise impeded the procedures. 

The draft Law also proposes that movable property the value of which exceeds the amount of 250 Basic Social Benefits (EUR 9.500) (except for animals, perishable assets, securities and pledged assets the selling of which already had started before initiation of the bankruptcy proceedings) as well as immovable property, pledged assets, as provided by current version of the Law, should also be sold at auction. The procedure for the sale of assets and property unsold at two auctions shall be established by the meeting of creditors to the same extent and level of particularity of what was offered at the time of the auctions. If the meeting of creditors decided to change the extent and level of particularity of the assets, the assets shall be sold at the auction. The proposed amendments aim to solve the existing issue of current sale of assets procedure which allows to avoid sale of assets at auction by setting an unusually high initial sale price or by combining separate units of assets into one object for sale so the auction would not be proceeded and the assets could be sold later without the auction. The proposed provisions remove these gaps and allow to ensure transparent sale of the enterprise assets, reduce the possibility for abuse and promote more efficient sale of assets. 

The draft Law also provides amendments relating to the maximum amount of the bankruptcy administration expenses. It is suggested to set the maximum amount of administrative expenses as well as the bankruptcy administrator’s remuneration. The mentioned amounts would be used to determine the payable funds of the bankruptcy administration expenses and the procedure for calculation and payment of it (to achieve this goal the Government will have to prepare and adopt the rules on establishment, calculation and payment of the bankruptcy administration expenses). The draft amendments propose that the bankruptcy administrator’s remuneration shall depend on the results of the bankruptcy administrator’s activities and it shall not depend on the duration of the bankruptcy proceedings, i.e. the determined monthly salary shall be eliminated.