RESTRICTED
WORLD TRADE WT/ACC/LTU/2
12September 1995
ORGANIZATION(95-2597)
ACCESSION OFLITHUANIA
Questions andReplies
totheMemorandum ontheForeign Trade Régime
(L/7551 andAdd.1)
Inacommunication, dated 18January 1994, circulated asL/7398, theGovernment ofthe
Republic ofLithuania applied foraccession totheGeneral Agreement onTariffs andTrade onthe
basis ofArticle XXXIII oftheGeneral Agreement. Having regard totheDecision adopted bythe
General Council on31January 1995, theWorking Party ontheAccession ofLithuania tothe
GATT 1947 wastransformed intoaWTO Accession Working Party. Theterms ofreference ofthe
Working Party arereproduced indocument WT/ACC/LTU/1. Indocument L/7551, members had
beeninvited tosubmit questions inwriting concerning theforeign trade régime ofLithuania. The
questions submitted bymembers andthereplies thereto provided bytheauthorities ofLithuania are
reproduced hereunder.
DelegationswishingtoraiseadditionalquestionsconcerningtheforeigntraderégimeofLithuania
might inform thedelegation ofLithuania (with acopytotheSecretariat) ofsuchquestions inadvance
ofthenextmeeting oftheWorking Party, sothatconsidered replies canbemade available byLithuania
tomembers atthetimeoftheWorking Party meeting.WT/ACC/LTU/2
Page2
TABLE OFCONTENTS
Section Question numbers
I. INTRODUCTION 1
II. ECONOMY AND FOREIGN TRADE
1. Economy
(b) Main directions oftheongoing policies, etc.
Transition toamarket economy 2
Prices 3-5
(c) Thedivision ofauthority between central
andsub-central governments 6
III. FOREIGN TRADE REGIME
1. Import Regulations
(a) Theevolution ofthecustoms tariff 7
(b) Customs tariff nomenclature, types ofduties, general
description ofthecustoms tariff structure, weighted average
levelofduties onmain customs tariff groupings 8-10
(c) Tariff preferences 11-12
(d) Non-tariff measures, quotas andlicensing system 13-17
(g) Customs formalities 18
(h) Standards andcertification 19-28
(i) Sanitary andphytosanitary measures 29-32
(j) Other 33
2. Export regulation
(a) Customs tariff nomenclature, types ofduties, customs tariff
structure onmain customs tariff groupings 34-35
(b) Export restrictions andprohibitions 36
IV. OTHER POLICIES AFFECTING FOREIGN TRADE
1. Industrial policy 37-38
2. Agricultural policy 39-48WT/ACC/LTU/2
Page3
3. Financial, budgetary andfiscal policy
Monetary policy andthebanking system 49-50
5. Foreign anddomestic investment policy 51-56
6. Government procurement 57
7. State trading andState enterprises 58-60
8. Subsidy policy 61-63
9. Freeeconomic zones 64
10. Protection ofintellectual property rights 65-67
V. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC
RELATIONS WITH THIRD COUNTRIES
1. Brief description ofbilateral trade andeconomic
agreements andintegration arrangements 68-72
VI LAWS AND LEGAL ACTS
2. Laws andlegal actsrelating tonon-tariff regulation of
imports, exports andtrade intransit, rules oforigin;
responsible agencies 73
3. Laws andregulations relating toforeign investment;
responsible agencies 74-77
ANNEX IV GOVERNMENT DECISION ONTHE PROCEDURE OF
COMMODITY EXPORT AND IMPORT REGULATION
INTHE REPUBLIC OFLITHUANIA 78-79WT/ACC/LTU/2
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CHAPTER I. INTRODUCTION
Question 1
Lithuania hasidentified among itspriorities, thedevelopment ofthetransport system,
communications andinformation system andservices infrastructure. Arethere anyrestrictions
ontheforeign provision ofservices inthese sectors?
Reply
Lithuania isworking toelaborate alegal structure togovern services activity initsmarket.
Currently, theonlylegalinstrument pertaining toservices istheGovernment 'sResolution No.511
"OnApproving Regulations ofRendering Services" (12April 1995), which provides aframework
forservices activity. Thedecision itself isverygeneral anddoesnotaddress thetreatment accorded
toforeign service providers. However, itdoesrequire eachministry involved inservices toissue
appropriate regulations governing theirrespective areas ofresponsibility.
There arenorestrictions orprohibitions ontheforeign provision ofservices toLithuania at
thecurrent moment (except those indicated intheanswer toQuestion 52),butforsomekinds ofactivities
thelicences arenecessary. Alistofsuchactivities isapproved bytheLawonAmendments and
Supplements oftheLawonEnterprises (5July1995), andisincluded intheanswer toQuestion 52.
CHAPTER II. ECONOMY AND FOREIGN TRADE
1. Economy
(b) Main directions oftheongoing policies, etc.
Transition toamarket economy
Question 2
InitsMemorandum Lithuania mentions thatitispreparing, incooperation withtheIMF,
aMemorandum concerning Lithuania 'seconomic policy forthenextthree years (1995-1997).
Would Lithuania advise ifthisMemorandum hasbeencompleted andifsowhen willitbemade
available toworking party members?
Reply
TheMemorandum ofState Economic Policy ofRepublic ofLithuania wasapproved andit
isvalid from the1October 1994, to28September 1997. AnEnglish language translation hasbeen
deposited withtheWTO Secretariat forreview byWTO members.
Prices
Question 3
Itisindicated thatLithuania intends toliberalize prices inthetransportation and
telecommunications sectors in1994-1996. What arethetransportation andtelecommunications
services sub-sectors concerned, andwhat willbethedegree ofliberalization andthetime-limits
forimplementation? What ismeant bysectors working as"natural monopolies"?WT/ACC/LTU/2
Page5
Reply
Lithuania doesnothaveadefinite schedule fortheliberalization ofprices inthetransportation
andtelecommunications sectors; thetimeframe forthisprocess islinked tothepaceofeconomic
restructuring andprivatization ofthese sectors, andtotheincreased competition thatwillresult.
Inthetransport sector theGovernment setsprices forpassenger transportation byair,rail,
boatandbuses between cities. Municipalities setprices forpassenger transport bybuses operating within
cities.
TheGovernment doesnotcontrol anyprices ofcargo transportation.
Inthetelecommunications sector, theGovernment setsprices forservices provided bytheState-
owned "Lietuvos Pastas" (Lithuanian PostOffice) andtheState-owned "Lietuvos Telekomas" (themain
company providing telecommunications services).
Lithuania considers "sectors operating asnatural monopolies" tobethose sectors inwhich,
fortechnical andeconomic reasons, there isanabsence orrestriction ofcompetition andconsumer
choice possibilities. These alsoaresectors where onedominant Stateentity isoperating inthewhole
orinamain partoftheLithuanian territory. Thus, Government regulation andcontrol (including
price regulation) isnecessary forthese sectors. Thefollowing sectors currently operate asnatural
monopolies: supply ofnatural gas; production andsupply ofelectricity andheatenergy; supply of
water andsewage services; supply ofsome kinds oftelecommunication andpostal services; and
passenger transportation.
Question 4
Towhat extent haveprices beenliberalized foragriculture andfoodcommodities? What
State control remains overprices forenergy, railandother freight methods?
Reply
Lithuania hasliberalized itsprices foragriculture andfoodcommodities. Lithuania 'sCouncil
onCoordination andRegulation ofPurchasing ofAgricultural Production (composed ofagricultural
producers, processors, wholesalers, andtherepresentatives from theMinistry ofAgriculture) does
recommend purchase prices forcattle, milkandcertain plants. However, theseprices arenotmandatory
andarebased onworld market prices.
TheGovernment regulates prices forelectricity, natural gasandheatenergy supplied to
households (seetheanswer toQuestion 3).
Inregard torailandother freight methods, please seetheanswer toQuestion 3.
Competition
Question 5
Howmany ofthe57enterprises saidto"have adominant position" areactive intheservices
area? What aretheservices sectors concerned?WT/ACC/LTU/2
Page6
Reply
Thelistof57entitiesthataredominantintherelevantmarketsarecomprisedmostlyofextracting
andprocessing industries. These entities haveover40percentofthemarket share. Inthesphere of
services, notincluding thesectors mentioned intheanswers toQuestions 3and4thataredirectly
controlled bytheGovernment, fourentities areincluded inthelistofdominant entities:
(i) theStateenterprise "Lietpraba", which engages intheassaying andhall-marking ofprecious
metals;
(ii) theLithuanian-Luxembourg joint-venture "Comliet", which provides cellular communication
services;
(iii) theStateenterprise "Lietuvos kuras" ("Lithuanian fuel"), which engages intheselling ofpetrol;
and
(iv) theStateBureauofInventorization,DesignandService,whichprovidestechnicalinventorization
ofconstructions, building andengineering constructions, certification ofbuildings and
constructions. (This Bureau hasthestatus oftheprofit company).
(c) Thedivision ofauthority between central andsub-central governments
Question 6
Would Lithuania expand ontheroleoflocal councils inlevying taxes andduties? Are
anysuchlevies applied toimported goods and,ifso,aretheyconsistent withthenational treatment
provisions ofArticle IIIoftheGeneral Agreement? What aretheestablished limits andprocedures
inthecreation ofsuchadditional taxes?
Reply
Leviessetbythelocalcouncil(municipalities)mustbecoordinatedwiththeMinistryofFinance.
Municipalities donothavetherighttoassess levies onobjects, operations orservices thatarealready
subject tonational taxes orlevies. There arenosuchlevies applied toimported goods.
CHAPTER III. FOREIGN TRADE REGIME
1. Import regulations
(a) Theevolution ofthecustoms tariff
Question 7
Could Lithuania please provide acopy oftheLithuanian applied customs tariff?
Reply
TheLithuanian applied customs tariff wasapproved bytheGovernment Resolution No.281
of28February 1995. Acopyofthisdocument withamendments hasbeendeposited withtheWTO
Secretariat forreview byWTO members.WT/ACC/LTU/2
Page7
(b) Customs tariff nomenclature, types ofduties, general description ofthecustoms tariff
structure, weighted average levelofduties onmain customs tariff groupings
Question 8
DidtheConvention ontheHarmonized System enter intoforce forLithuania on
1January 1995 asexpected?
Reply
Yes.
Question 9
Attheendofthelistofthehighest tariff rates, there isamention ofglass bottles and
jars. Does thisrefer toempty containers, orthose containing product, orboth?
Reply
Thisrefers solely totheimport ofempty glassbottles andjars,classified inLithuania 'scustoms
tariff system as7010 9010,7010 9043and7010 9045(codes according totheEEC Harmonized
Commodity Description andCoding System).
Question 10
Given thestatement thattariff duties maybemodified inthefuture totakeaccount of
changes inLithuania 'seconomic situation, hasLithuania given thought tothelevelofanoverall
ceiling binding?
Reply
Lithuania iscurrently giving thought tothelevelofbindings itwillofferinconnection with
itsaccession toWTO andwillcommunicate itsconclusions assoonaspossible.
(c) Tariff preferences
Question 11
Inthissectionitstates:"Lithuaniadoesnotgranttariffpreferences.AccordingtoResolution
No.627(18July1994) preferential customs duties areapplied withcountries having afreetrade
agreement." Please explain thiscontradiction.
Reply
Tocorrect anymisunderstanding, Lithuania does grant some tariff preferences togoods
originating incountries withwhich ithasnegotiated afreetradeagreement (FTA). Lithuania currently
hasFTAs inplace withtheEuropean Union, Estonia, Latvia, Norway, Switzerland andLiechtenstein.
Many ofthese tariff preferences arezerotariffs.
Lithuaniaappliesconventional(MFN)importdutiestogoodsoriginatingincountrieswithwhich
ithasnegotiated MFN tradeagreements. Lithuania hassuchagreements inplacewithAustralia, Belarus,
Bulgaria, China, Cyprus, theCzech Republic, Cuba, Hungary, India, Iceland, theRepublic ofKorea,WT/ACC/LTU/2
Page8
Moldova, Romania, theRussian Federation, Slovakia andTurkey. Lithuania alsoapplies conventional
duties forgoods originating incountries without MFN agreements butwhen itisincustoms policy
interests ofLithuania. Thefollowing countries benefit fromsuchtreatment: Canada, Japan, Kazakhstan,
Poland, Tajikistan, Ukraine andtheUnited States.
Autonomous duties areapplied forgoods originating fromcountries notbenefiting fromFTAs
orMFN treatment.
Question 12
Towhat extent isagriculture covered byeachofLithuania 'sfreetrade agreements, and
what arethemargins ofpreference foraffected commodities foreachagreement?
Reply
Lithuania 'sfreetrade agreements provide fortheelimination ofduties onsubstantially onthe
trade between theparties.
Thefollowing description ofagricultural trade pertains tochapters 1-24oftheHarmonized
System.
AnFTA withtheEuropean Union (signed on18July1994, which entered intoforce on
1January 1995) provides thatLithuania committed itselftoabolish import duties forindustrial goods
progressively overaperiod of6years. Anearlier signed agreement ontrade intextile products was
entirely incorporated intotheFTA. Fortextiles imported from countries oftheEuropean Union,
Lithuania applies zerotariff(Lithuanian conventional dutyfortextile products seeks 10-25 percent).
Tradeonagriculturalproducts(aswellasfishproducts)withtheEUisregulatedbytheprotocols
ofexceptions oftheFTA. EUagricultural products imported intoLithuania areimposed bycurrent
conventional duties (MFN), andbytheyear2000, suchduties must bereduced byapproximately
10percent. TheFTA provides thattheEUwillgrant increased tariff quotas foritsimports of
unprocessed agricultural products from Lithuania.
AFreeTrade Agreement between Lithuania andNorway wassigned on16June1992, and
entered intoforce on1August 1993. Under thisagreement there isapplied zerotariff intrade with
industrial goods andfishproducts.
Onthesamedate,another agreement wassigned concerning tradeinagricultural products (HS
1-24). Inthisdocument therewerelisted positions ofLithuanian agricultural products forwhich Norway
applies discounts comparing withitsMFN import duty. Under thisagreement Lithuania commits itself
toapply conventional duties (MFN) forthemajority ofagricultural products imported fromNorway;
alsotherearepositions withzerotarifftoimports fromNorway -forcereals (Lithuanian conventional
duty (MFN) forsome kinds ofcereals is30percent), margarine (20percent), some oilsand
preparations ofcereals, etc.
AnFTAwithSwitzerland (andLiechtenstein) wassigned on24November 1992, andentered
intoforce on1April 1993. Itcovers all-industrial andagricultural -products. Fortradeinindustrial
products agreement approved zerotariff, foragricultural -discount system. Inthisagreement Lithuania
listed positions ofSwiss agricultural products which import must beprovided onregime notless
favourable asforgoods imported fromother EFTA orEUcountries. Alsoitmustbestressed theSwiss
concessions toLithuanian import offish.WT/ACC/LTU/2
Page9
On12December 1994, theTrade Arrangement forAgricultural Products between Lithuania
andSwitzerland (astheannex tothevalid freetrade agreement between Lithuania andSwitzerland)
wassignedandenteredintoforceon1June1995.AgricultureintheseagreementsiscoveredbyHS1-24
(excluding fishproducts). Under thisagreement, the20percenttariffreduction average fromcurrent
Swiss import dutyonMFN basis isapplied toLithuanian agricultural products.
Both theagreements withSwitzerland (andLiechtenstein) currently apply. Inthecaseof
contradictions, thesecond agreement prevails.
ATrilateral FreeTrade Agreement between Lithuania, Latvia andEstonia wassigned on
13September 1993, andentered intoforce on1April 1994. TheAgreement covers industrial goods
andprovides zerotariff.
Anagreement onagricultural products between Lithuania, Latvia andEstonia isonthe
preparation way(itwillbealsoasanannex totrilateral FTA).
(d) Non-tariff measures, quotas andlicensing system
Question 13
CanLithuania confirm thatSection (d),page19ofitsMemorandum describes thetotality
ofLithuania 'snon-tariff measures? CanLithuania giveanundertaking thatanyquantitative
import restrictions which arenotconsistent withGATT Article XIwillbeeliminated onaccession?
Reply
Lithuania applies quantitative restrictions onsome additional goods buttheycanbejustified
under theGATT/WTO exceptions forhuman health orsafety.
These restrictions (besides themeasures mentioned intheMemorandum Chapter III,Part1,
Section (d))apply intheareas ofdangerous andmilitary cargoes, clandestine cargoes, hunting and
sporting firearms, ammunition, special devices, colour copying equipment, wildanimals, trophies of
hunting andfishing, narcotics, highly effective poisonous, radioelectronic andelectric equipment, which
emitradio waves inoperation, etc.(importation ofsuchspecific goods isruling under theGovernment
Resolution No.718(19May1995) "OntheRestriction ofImport ofCertain Things (Goods) tothe
Republic ofLithuania, theirExport andTransit"). There arenootherquantitative restrictions onimports
(except some restrictions onsugar import -seebelow).
Lithuania atthemoment doesnotapply import quotas. Allthequotas which arementioned
intheanswers aretariff quotas -seetheanswer toQuestion 14.
Since theMemorandum wasprepared, Lithuania hasdecided thatcertain measures arenecessary
toprotect producers ofsugar beets andsugar products. Under theorder provided intheLawonSugar
(27April 1995) licences forsugar imports arenecessary.
While protecting sugar manufacturers, theGovernment ofLithuania mayapprove threshold
sugar prices taking intoconsideration thechanges ofretail sugar prices andtoestablish import quotas
forsugar andsemi-manufactured sugar products.
According tothisLaw, theprocessing industry isprohibited from theimportation ofsemi-
manufactured sugar products intothecountry untilthetimeithaspurchased sugar beets according
toquantities setbytheGovernment. Incases ofnatural calamities andpoorcroptheimportation ofWT/ACC/LTU/2
Page10
semi-manufactured sugar products shallberegulated bytheGovernment (forinformation onthatLaw
seetheanswer toQuestion 47).
SincetheMemorandumwasprepared,Lithuania,bytheLawonAlcoholControl(18April1995)
anditsamendment (3July1995), hasestablished thelegalbasis oftheintroduction oftherightofa
State monopoly toproduce, sellandimport alcohol products, noted inthislaw.
Thegeneral purpose ofthelawistoprotect thehealth ofLithuanian citizens byreducing the
level ofalcohol consumption ingeneral. Thelawprohibits selling domestic andimported products
thatcontain unacceptably highlevels ofalcohol. Thelawalsoallows theGovernment todecide what
number ofimport licences should begranted eachyear. Thelawalsogives theGovernment theright
toregulate themanufacture, import, tradeanddomestic consumption ofliquids containing ethylalcohol
which maybeimbibed asintoxicating drinks andfoodproducts, containing alcohol additives.
Under thisLawonAlcohol Control there isprohibited tosellthefollowing products inthe
Republic ofLithuania:
(i)beerwhich contains more than9.5percentethyl alcohol byvolume;
(ii)winewhich contains more than22percentethyl alcohol bevolume;
(iii)products ofdistilled ethylalcohol which contain more than50percentethylalcohol byvolume.
Lithuania 'sParliament alsoisconsidering aLawonTobacco Control which might provide
forrestrictions onimports. Atthemoment theorder ofimport oftobacco products requires appropriate
licences.
Concerning theother products forwhich alicence forimportation toLithuania isnecessary
seetheanswer toQuestion 52.
Lithuania upon theaccession willbeprepared toadhere totheWTO obligations relating to
quantitative restrictions.
Question 14
Howarethe"quotas" referred toinsection (d),page19,different from the"tariff quotas"
mentioned insection (b)?What ismeant bytariff quotas inthisinstance? Would theLithuanian
authorities please provide details ontheoperation ofthetariff quotas?
Reply
Insections 1(b)and1(d)ofChapter IIIoftheLithuanian Memorandum ontheForeign Trade
Régime auniform notion "tariff quotas" shallbeused(according theGovernment Resolution No.281,
28February 1995).
Asprovided under theGovernment Resolution No.653(8May1995), implementing theLaw
onStateRegulation ofEconomic Relations inAgriculture (22December 1994), Lithuania usestariff
quotas toimplement itsfreetradeagreements andtoprovide fortemporary import ofcertain products
forshortsupply orotherreasons exist. Inregard tofreetradeagreements, thetariffquotas allow imports
fromtheEU(orother freetradepartners) within setquantities tobeassessed lessthantheMFN tariff,
including insome cases azerotariff. These tariff quotas areintended asatemporary measure leading
tofullyliberalized trade. Inregard toshortsupply andother problems, Lithuania applies import tariffs
under MFN ratesandwithin thequota foratimetobedetermined bytheGovernment.WT/ACC/LTU/2
Page11
Under theResolution No.281,of28February 1995 andlateramendments, these goods are
freefrom customs dutyimported inquantities authorized bytheMinistry ofAgriculture:
- pure-bred breeding animals (codes according totheEECHarmonized Commodity Description
andCoding System -0101.11, 0102.10, 0103.10, 0104.10.10, 0104.20.10);
- pure-bred breeding poultry (0105.11, 0105.19.10, 0105.19.90);
- other livepure-bred breeding animals (0106.00.10, 0106.00.90);
- meatofbovine animals, meatofswine (0201, 0202, 0203);
- pure-bred breeding fish(0301.91-0301.99.19);
- butter (0405);
- pure-bred breeding birds'eggsforhatching (0407.00.11, 0407.00.19);
- semen ofstallions, boars, ram,he-goats, embryo ofbovine animals (0511.99.50, 0511.99.80);
- potatoes (0701);
- cereals (10);
- wheat flour (1101);
- compound feed(1104, 1214.90.91, 1214.90.99);
- maltnotroasted (1107.10);
- fatsofbovine animals, sheep orgoats (1502);
- rawsugar forrefining (1701.11.10-1701.12.90);
- sugar forspecial purpose (1701.91, 1702.30, 1702.40, 1702.90) (andMinistry ofHealth Care);
- sugar (1701.99);
- alcoholic beverages andtheirrawmaterials incontainers forindustrial processing (2204.29,
2204.30, 2205.90, 2206.00.81, 2206.00.89, 2207, 2208.10, 2208.20.40, 2208.20.62,
2208.90.35, 2208.90.38, 2208.90.71-2208.90.79, 2208.90.99);
- irregular transparent glass bottles (7010.90.41-7010.90.47).
Goods freefrom customs dutyimported inquantities authorized bytheMinistry ofIndustry
andTrade: spirits fortechnical uses(2207.10).
Goods freefromcustoms dutyimported inquantities authorized bytheMinistry ofTransport:
special furniture forships (9401, 9403).
Majority oftariff quotas aregranted bywayofcompetition.
Question 15
What isthepurpose oftheannual levypaidbyimporters ofalcoholic beverages? (section
(d),page 19)
Reply
Thischarge hasbeenintroduced inconnection withimport licensing foralcohol andalcoholic
beverages. Thepurpose behind theimport licensing istocontrol theselection ofimporters ofalcoholic
drinks toavoid theimport ofcounterfeited andnon-quality products which would endanger human
lifeorhealth.
Question 16
Please provide alistofagricultural goods (with H.S.codes) forwhich import quotas and
licences apply. Howarethese administered? What arethelevels ofimports under quota andhow
arethequotas established? Please explain whylivepure-bred animals aresubject tothese quotas.WT/ACC/LTU/2
Page12
Reply
Import quotas arenotapplied inLithuania (about some restrictions onsugar import seethe
answer toQuestion 13).Allquotas mentioned intheanswers aretariff quotas (seetheanswer to
Question 14).
Concerning thelicences seetheanswer toQuestion 13.
Question 17
How doesLithuania plantoadjust itspolicy ofquantitative restrictions inlightofWTO
requirements under theAgreement onAgriculture (Article 4.2)?
Reply
Atthemoment there arenoquantitative restrictions (except some restrictions onsugar -see
theanswer toQuestion 13)onimport toLithuania.
There aresome export prohibitions asatemporary measure till1May1996 (seetheanswer
toQuestion 34).
In1994, Lithuania committed itself forIMFtoabolish existing quantity restrictions andnot
introduce newrestrictions.
(g) Customs formalities
Question 18
Does Lithuania apply quality control procedures atthefrontier?
Reply
Lithuaniaappliessanitary,phytosanitaryandveterinarycontrolproceduresatthefrontier(control
ofdocuments, taking ofsamples, etc.).
Under theGovernment Resolution No.35(9January 1995) "OntheApproval oftheOrder
ofFoodstuffs Import intotheRepublic ofLithuania andtheirQuality Control", foodstuffs must be
imported through those border crossing points where frontier foodstuff control service isavailable.
Thesubmitted certificates shallcontain theindicators ofquality andverification thatimports arenot
hazardous tohealth.
(h) Standards andcertification
Question 19
What international andEuropean standards doesLithuania apply inconnection withits
newcertification regulations?WT/ACC/LTU/2
Page13
Reply
ThebasisoftheLithuaniacertificationsystemconsistofnormativedocumentspreparedaccording
torelevant International Organization forStandardization/International Electrotechnical Commission
(ISO/IEC) guides andstandards indeveloped countries.
Question 20
Willthemechanism fordrafting, adopting andenforcing technical regulations include
aprocess whereby interested parties including foreigners willbeallowed tocomment before the
issuing andapproving oftechnical regulations?
Reply
Although currently Lithuania doesnotprovide thepossibility forforeigners tocomment on
proposed technical regulations, Lithuania understands therequirements oftheWTO Agreement on
Technical Barriers toTrade andintends todraftprovisions which would allow foreigners tocomment
ontechnical regulations when theyarenotconsistent withinternational norms.
Question 21
Whatmechanismswillbeusedtoensurethatnewregulationswillconformwithinternational
standards? Forexample, willLithuanian representatives participate ininternational standards
development fora?
Reply
Lithuanian representatives intend toparticipate ininternational standards development fora
asthenational budget permits. Currently, Lithuania isamember oftheInternational Organization
forStandardization (ISO), theInternational Electrotechnical Commission (IEC), theInternational
Organization forLegal Metrology (OIML) andtheEuropean Organization forStandardization (CEN).
Inaddition, thebasicguidelines fordeveloping standards inLithuania foresees thatLithuanian technical
regulations willconform withinternational standards.
Question 22
Isthere aplanforthedevelopment ofavoluntary standards system inLithuania andare
there anydetails available onitsproposed structure (ie:inareas where standards arenot
compulsory)?
Reply
Lithuania hasbeendeveloping asystem ofvoluntary standards since 1992. These standards
aredeveloped andapproximated toISO/IEC orstandards, thatarewidely accepted internationally,
by30technical committees established bytheLithuanian Standardization Office andreporting toit.
Thecommittees cover theareas ofseparate branches ofindustry. Thecommittees seekadvice from
allinterested parties, including producers, consumers, andauthority institutions.
Question 23
Canforeign producers ofconstruction materials obtain certificates ofquality from the
Ministry ofConstruction andUrban Development?WT/ACC/LTU/2
Page14
Reply
Constructionmaterialsmustbecertifiedandmustbesubmittedtotestingcentresandlaboratories
forverifying. Testing centres andlaboratories issue certificates ofquality toforeign producers; they
alsorecognize corresponding documents (corresponding certificates) fromforeign countries 'analogical
institutions.
Question 24
Which department isresponsible forcertifying electrical appliances forsafety andfor
recognizing safety certificates ofothers countries?
Reply
According totheGovernment Resolution No.474"OnMandatory Certification ofElectrical
Household Appliances" of22June1992, theCertification Centre forElectrical Appliances wasgiven
thisresponsibility.
Question 25
Canaforeign manufacturer receive prior approval from theState Inspection ofElectrical
Appliances forexporting radio electronic equipment andelectrical appliances toLithuania?
Reply
Permission forproducing orimporting radioelectronic apparatus andelectric equipment can
beissued ifasample ofapparatus orequipment isapproved (orverified) bytheState Inspection of
Electrical Appliances oriftheexporter canprovide acorresponding certificate recognized bythis
institution.
Question 26
Canimporters ofmotor fuelsubmit certificates ofquality from aforeign source or
laboratory indicating thepercentage oflead?
Reply
Yes. Starting on1January 1995, oilproducts canbeimported intoLithuania withcertificates
issued inthecountry ofproduction. Suchcertificates havetocorrespond tomandatory quality indicators
approved byLithuanian Standardization Office.
Question 27
Arethere other lawsregulating thesaleofgoods inLithuania suchaslabelling (ofpackaged
consumer goods, food, textiles), weights andmeasures, packaging, vehicle safety, thesale
pharmaceutical products andmedical devices, etc?
Reply
Therulesofmarking ofgoods wereestablished byorder No.42/25/107 on23February 1995,
oftheMinistry ofIndustry andTrade, Lithuanian Standardization Office andMinistry ofHealth "OnWT/ACC/LTU/2
Page15
Mandatory Properties ofMarking ofGoods Produced inandImported totheRepublic ofLithuania
andEstablishing ofOrder".
Theorder ofverification ofcertain imported goods isestablished bytheGovernment Resolution
No.53/89 of31August 1994, ofChief State Doctor Hygienist oftheRepublic ofLithuania and
Lithuanian Standardization Office "OnConfirmation ofSome Imported Non-food Goods Harmless
toHealth".
Provisions onvehicle safety areprovided bytheGovernment Resolution No.883
(29November 1993) "OntheApproval ofTraffic Rules". Every imported vehicle mean must be
examined according thetechnical inspection requirements ofthatResolution.
Allpharmaceutical products have toberegistered before selling. Selling ofunregistered
pharmaceutical products isregulated bythedecrees ofMinistry ofHealth Care.
Question 28
Which government agencies areresponsible forgiving permission forimporting different
types ofspecific products?
Reply
TheMinistry ofEnvironment Protection controls theimport, transport, export andusage of
chemical andradioactive materials andmicroorganisms.
TheAgency ofTransportation oftheMinistry ofDefence controls thetransit ofdangerous
(1-9classofdangerous) andmilitary loads.
TheState Inspection onAtomic Energetic Prevention andtheCustoms Department controls
theimport ofstrategic goods besides those mentioned already. TheParliament isnowconsidering a
newdraftLawontheControl ofImport, Transit andExport ofStrategic Goods andTechnologies.
(i) Sanitary andphytosanitary measures
Question 29
DoesLithuaniaparticipateininternationalstandard-settingorganizationssuchastheOffice
International desEpizooties (OIE), Codex Alimentarius Commission andInternational Plant
Protection Convention (IPPC)? AstheWTO SPSAgreement identifies these organizations as
relevant international standards-setting bodies, itwould beuseful todetermine ifLithuania follows
orintends tofollow theguidelines/standards developed bythese international organizations.
Reply
In1992 themembership inInternational desEpizooties (OIE) wasrenewed (seetheanswer
toQuestion 31.4).
Lithuania isfollowing therequirements ofCodex Alimentarius Commission andEuropean Plant
Protection Organization (EPPO) -seetheanswers toQuestion 31.8.3, 31.8.4 andQuestion 32).WT/ACC/LTU/2
Page16
Question 30
What aretheprocedures fordrafting, adopting andenforcing sanitary andphytosanitary
measures?
Reply
TheMinistry ofAgriculture, theMinistry ofForestry andtheMinistry ofEnvironmental
Protection coordinate thedrafting ofphytosanitary measures withother appropriate institutions.
Phytosanitary measures must beapproved bytheGovernment andtheyaremandatory.
Under theLawonVeterinary (17December 1991) theStateVeterinary Agency issues sanitary
measures which aremandatory intheterritory ofLithuania. Sometimes thisinvolves coordination with
other agencies.
Question 31
Additional information pertaining totheLithuanian regulatory process andregulations
would alsobeuseful. Specifically, could Lithuania please provide additional information onthe
following regulatory areas:
Seeds Standards andInspection
Feeds Standards andInspection
Fertilizers Standards andInspection
Animal Health/Animal Disease
Plant Health/Plant Protection
Pesticides andPestControl Product Standards
Plant Breeders Rights
Food Standards andInspection
- Meat (Hygiene andGrading) Inspection
- Horticulture Inspection, Dairy Inspection
- EggandEggProduct Inspection
- Additives andContaminants Standards
- Packaging andLabelling Standards
Reply
31.1Seeds Standards andInspection.
Formerly,seedsinspectionandestimationwasdoneaccordingtotheGOSTsystem(thestandards
oftheformer USSR). Now, theLithuanian Standardization Office prepares andapproves newseed
standards which areclose tointernational standards. Allnational standards make reference tothe
application ofinternational norms.
On1January1993,theLaboratoryofStateSeedInspectionbecameamemberoftheInternational
SeedTestingAssociation(ISTA)member.From17June1994,thislaboratorywasgrantedunconditional
authorization toissue ISTA certificates. Thismeans thattheLaboratory ofState Seed Inspection
researches andestimates, according toISTA rules, thequality ofimported andexported seeds.
Domestic inspection andcontrol isperformed bytheStateSeedInspection Service. According
toitsmethods,district-levelseedinspectoratescarryoutseedqualityestimationandseedcropsinspection.WT/ACC/LTU/2
Page17
31.2Feeds Standards andInspection.
TheState Veterinary Agency hastheauthority toinspect andcontrol feedproduction. Tests
areperformed according toLithuanian, GOST (standards oftheformer USSR) andinternational
standards.
31.3Fertilizers Standards andInspection.
Fertilizers areinspected bytheState Quality Inspection Service which isunder theauthority
oftheStateOffice ofCompetition andConsumer Protection. Fertilizers areproduced andtransported
according toGOST standards (thestandards oftheformer USSR).
31.4Animal Health/Animal Disease.
According theLawonVeterinary (17December 1995), theStateVeterinary Agency hasthe
right toissue instructions forthecontrol ofcontagious animal diseases which areobligatory within
Lithuania. These instructions were prepared according totheprinciples oftheWorld Organization
forAnimal Health (OIE -Office International desEpizooties) andadequate documents provided by
other countries.
Inthisconnection theStateVeterinary Agency iscarrying outtheveterinary supervision and
control ofallcattle-breeding processes. Every yearthemeasures planned forcontrolling ofanimal
health havebeenapproved. Themonitoring ofthecontrol ofdiseases listed intheOffice International
desEpizooties (OIE) iscarried out.Forcontrolling ofseparate diseases theinstructions ofdiseases
liquidation andprophylactic measures areapproved. Such activity isfinanced bytheState budget.
31.5Plant Health/Plant Protection
TheState Plant Protection Station hasresponsibility forplant protection issues. There are8
stationsforinspectionwhichareconnectedwithexistinginstitutionsofagriculturescience.Thespecialists
fromsuchstations supervise thestateofallcrops, inform about pestsanddiseases, andindicate what
proper measures must beused.
AdraftLawonPlant Protection andSeedGrowing currently isunder consideration bythe
Seimas (Parliament).
31.6Pesticides andPestControl Product Standards
Pesticides arenotproduced inLithuania; onlytheirregistration iscarried out.
AdraftLawonPlantProtection andSeedGrowing, currently under consideration bytheSeimas
(Parliament), willprovide procedures forregistration, production, import andtrade ofchemical and
biological plants, andsubstances which regulate plant growth.
Tests onbiological efficacy arecarried outconcerning theregistration ofnewplantprotection
measures. Such testsarefulfilled bytheLithuanian Agricultural Institute, Lithuanian Agricultural
Academy, Lithuanian Forestry Institute, Lithuanian Horticulture andMarket-Gardening Institution.WT/ACC/LTU/2
Page18
31.7Plant Breeders Right
AdraftLawonPlant Protection andSeedGrowing iscurrently under consideration bythe
Seimas (Parliament). TheLawwillprovide rights andobligations forforeign plant breeders aswell
asfordomestic natural andlegalpersons engaged inseedgrowing. Thedraftprovides thatimportation
ofseeds andplantings cantakeplaceifonanapproved listofthose which areappropriate forLithuanian
soilsandconditions.
Lithuania isnotamember oftheInternational Union fortheProtection ofNewVarieties Plants
(UPOV). Therefore, currently, thelegalprotection ofplants varieties created byforeign plants breeders
andseedgrowing firms isensured bytreaties between breeders andgrowers.
31.8Food Standards andInspection.
31.8.1. Meat (Hygiene andGrading) Inspection. Dairy Inspection. EggandEggProduct
Inspection.
TheLithuanian Standards Committee hasbeengiven theauthority toprepare andapprove
standards formilk, meat andother foodproducts. Technical regulations orGOST (former USSR)
standards areinforce forevery foodproduct inLithuania.
International standards areusedforproduction offoodproducts.
According totheLawonVeterinary, theState Veterinary Agency hasresponsibility for
performing animal health checks atfarms forcontrolled (meat, milk, eggs, fish)products.
Control oftheprocessing offoodproducts isperformed bytheHuman Health andQuality
Inspection, under theresponsibility oftheState Veterinary Agency.
31.8.2. Horticulture inspection.
Thedevelopment ofLithuanian horticulture isprovided bytheMinistry ofAgriculture, together
withtheInstitute ofHorticulture andMarket-Gardening.
Intheinternal market, Lithuanian standards areapplied forthesaleoffruits andberries.
Theuseofpesticides ingardens andberry-fields iscontrolled bytheState Station onPlant
Protectionundertheestablishedrulesofuseofchemicalplantprotectionmeasures.Quarantineinspection
offruit-trees andberry-fields iscarried outbytheState Plant Quarantine Inspection.
TheNational Veterinary Laboratory hasresponsibility forascertaining whether thelevel of
pesticides andother unhealthy materials forfruits andberries iswithin EUnorms.
31.8.3. Additives andContaminants Standards
Requirements foradditives allowed tobeusedintheproduction offoodstuffs conforms tothe
practice oftheEuropean Union.WT/ACC/LTU/2
Page19
Requirements forcontaminants areestablished under theregulations ofCodex Alimentarius.
31.8.4. Packaging andLabelling Standards
Currently, GOST (former USSR) standards andrules established bytheLithuanian
Standardization Office areusedforfoodstuffs packaging.
Labelling offoodstuffs iscarried outaccording toGOST orinternational standards approved
bytheLithuanian Standardization Office.
Under theLawonAlcohol Control (18April 1995-forinformation onthisLawseetheanswers
toQuestions 13and58)itshallbeprohibited tosellinLithuania alcoholic beverages, bothimported
andmanufactured inLithuania, themarking whereof doesnotcorrespond totherequirements ofthe
Codex Alimentarius.
Question 32
Could Lithuania please provide more information onitsapplication ofEuropean Standards
todemonstrate thattheterms oftheSPSAgreement oftheWTO accord willbemet? Which
government agency isresponsible fortheenforcement ofSPSmeasures?
(Can Lithuania confirm thatitwillbring itsvarious sanitary andphytosanitary measures
intoconformity withtheAgreement onSanitary andPhytosanitary Measures?)
Reply
Lithuania isworking toconform itssanitary andphytosanitary measures withtherequirements
oftheWTO.
TheMinistry ofAgriculture (theStatePlant Quarantine Inspection Service) isresponsible for
theapplication ofphytosanitary measures. Theexport, import andtransit through Lithuania ofplant
origin products isregulated bytheGovernment Resolution No.599(3August 1993). Themain
requirements ofthatresolution are:
(i) allplant origin products havetobeexamined andmust carry phytosanitary certificates;
(ii) theform andcontent ofphytosanitary certificates aremodelled onEuropean countries.
Certificates must contain thefourfigure codes oftheimported goods according totheHS
nomenclature. Ifnecessary itispossible topasstothefullscheme ofcodification;
(iii) quarantine permission isnecessary toimport some plant origin products intoLithuania;
(iv) theimport ofplantorigin products toLithuania isprohibited forthose goods which areinfected
withdangerous vegetable pests, pathogens orweeds, which cannot beeffectively fought. In
LithuaniathereareapprovedlistsofobjectsunderquarantinewhichconformtoEPPO(European
Plant Protection Organization) guidelines.
TheStateVeterinary Agency isresponsible forveterinary-sanitary measures which apply to
cattle-breeding.WT/ACC/LTU/2
Page20
TheNational Veterinary Laboratory isaccredited tocarry outbacteriological, viruselogical,
serological, chemical-toxicological andother research. Thisresearch iscarried outaccording toEU
methods andpractice.
(j) Other
Question 33
Does Lithuania intend toenact antidumping orcountervailing duties and/or measures
related totrade remedies orsafeguards inthefuture, andifso,when?
Reply
Lithuania intends tomaintain theability toapply anti-dumping duties, countervailing duties
orsafeguard measures assetoutunder therelevant WTO agreements.
2. Export regulation
(a) Customs tariff nomenclature, types ofduties, customs tariff structure onmain customs
tariff groupings
Question 34
Does Lithuania currently apply export duties? Ifsoplease specify onwhich products (by
HSgroupings) theexport duties arelevied?
(Were export duties abolished atthebeginning of1995 asintended?)
Reply
Export duties were abolished bytheGovernment Resolution No.985(14October 1994).
However,LithuaniahasenactedsomeexportrestrictionsandprohibitionsundertheGovernment
Resolution No.281"OnPartial Amendments toResolution No.985"OnProcedure ofExport and
Import Regulation intheRepublic ofLithuania" adopted bytheGovernment oftheRepublic ofLithuania
on14October 1994". Theamendment provides forexport prohibitions until1May1996 of:
-seeds ofredclover (codes according totheEECHarmonized Commodity Description and
Coding System -1209.22.10),
-feathers anddown usedforstuffing (0505.10),
-rawhides andskins (4101-4103),
-unprocessed pineandbirch timber which thinendacross diameter notlessthan20cm,
unprocessed oakandashtimber (4403.20.00.1, 4403.99.80.2, 4403.91, 4403.99.80.1),
-glandsandotherorgansusedforpharmaceuticalproductsandorgano-therapeuticaluseswithout
quotas issued bytheMinistry ofHealth Care (0206.29.10.1, 0206.29.99.1, 0510.00.10.1,
0510.00.10.3, 3001.10.90-3001.90.91).
Theexport ofcertain copper andaluminium remelted intoballs, itsalloys scrap andwaste
(codes according totheEECHarmonized Commodity Description andCoding System -74.04, 76.02)
istemporarily discontinued (thereason isindicated intheanswer toQuestion 36).WT/ACC/LTU/2
Page21
Question 35
Lithuania states that: "Export tariffs areonlyimposed oncertain rawmaterials having
importance forLithuanian industry. These tariffs areonlyapplied asatransitional measure."
When willthese export tariffs belifted? Arethese measures entrenched inlaw?
Reply
Theimposing ofimport andexport duties islegalized bytheCustoms Tariff LawoftheRepublic
ofLithuania, passed on27April 1993.
Allexport duties havebeenremoved. Butthere aresome restrictions andprohibitions -see
theanswer toQuestion 36.
(b) Export restrictions andprohibitions
Question 36
Specify which products arecovered byexport licensing system and,ifso,forwhatreasons?
Reply
Under theGovernment Resolution No.1094 (8November 1994) "OntheStrengthening of
Export Control ofAlcoholic Beverages, Tobacco Products andSugar" andtheGovernment Resolution
No.806(8June1995), theexport ofethylspirit without thelicence oftheGovernment isprohibited.
Thepurpose oftheexport licensing istocontrol theselection ofexporters ofethyl spirit toavoid
ostensible export when theappropriate taxes areavoided andtherefore counterfeit alcohol beverages,
which would endanger human lifeandhealth, areproduced. Forthesamereason, theexport ofalcoholic
beverages andmineral fuelismore strictly controlled.
Lithuania alsorequires licences fortheexport ofcopper andother non-ferrous metals, alloys,
scrap andwaste thereof (codes according totheEECHarmonized Commodity Description andCoding
System -74.01-81.12), purchased inLithuania (thisdoesnotapply tothere-export ofsuchmetals).
Thelicences arenecessary toprevent illegal purchasing, remelting andexport ofcopper andother
non-ferrous metals, etc.Some exceptions existconcerning export forremelting orprocessing.
Licences alsoarerequired fortheexport ofwaste andscrap oftheferrous metals (forthesame
reasons asfortheexport ofnon-ferrous metals).
Concerning theother licensed exports seetheanswer toQuestion 52.
Theexport ofwheat, ryeandfodder cereals canbecarried outonlywithquotas granted by
theMinistry ofAgriculture (asatemporary measure of1995).WT/ACC/LTU/2
Page22
CHAPTER IV. OTHER POLICIES AFFECTING FOREIGN TRADE
1. Industrial policy
Question 37
CanLithuania provide more detail onhowitwillprotect andsupport industry asoutlined
inLithuania 'sindustrial policy onpages 23and24ofitsMemorandum? Inparticular howlong
doesLithuania anticipate the"transition" period tolast?
Reply
During Lithuania 'stransition toamarket economy, Lithuania iscontinuing topromote the
development ofcertain industrial sectors:
-wood processing industry;
-flaxindustry;
-processing ofnatural skins andfurs;
-production ofconstruction materials;
-production ofagricultural machinery;
-energy extraction from non-traditional sources;
-usage ofnatural extracted from theearth;
-processing andutilization ofwaste;
-production ofmedicines andmedical equipments, etc.
Lithuania does notgrant direct subsidies topromote specific industries. Instead, ithas
implemented measures toimprove thelegal andeconomic environment fortherestructuring ofold
andthecreation ofnewenterprises, building uponlawsandregulations already inforce. Specifically,
Lithuania provides Government 'sfinancial guarantees forenterprises thatreceive short-term credits
frombanks;allowstheseenterprisesshort-termexemptionsfrompayingtaxes;channelsforeigntechnical
assistance toappropriate recipients; andprovides these enterprises with Government 'sfinancial
guarantees. Foreign technical assistance isreceived intheareas ofstrategic planning, attracting foreign
partners, restructuring and,ifnecessary, saleforconvertible currency, andimproving management
ingeneral.
Otherwise, Lithuania doesnotplantoprovide anyotherassistance orprotection toitsindustrial
sector apart from tariff protection indicated intheLithuanian national tariff schedule.
Lithuania estimates thatitwilltakeapproximately sixyears torestructure theindustrial sector.
Question 38
Whatarethecriteriausedforselecting"potentiallycompetitive"companies?Whatmeasures
istheLithuanian Government taking tosafeguard these companies against bankruptcy?
Reply
Lithuania chooses theseenterprises based ontheirability tocompete inthedomestic andworld
markets.
Inselecting potentially competitive enterprises, criteria suchasshare ofexports inthetotal
production oftheenterprise considered areused.WT/ACC/LTU/2
Page23
These companies benefit from thetreatment asexplained intheanswer toQuestion 37.
2. Agricultural policy
Question 39
Please elaborate ontheprivatization process asitaffects agriculture. Towhat extent has
thefoodprocessing industry beenprivatized? Please provide anexplanation ofinternal support
measures andlegislation, including preferential taxrates forState and/or domestic corporations.
Reply
Privatization oftheagricultural sector isdivided intothree groups:
-privatization ofland;
-privatization ofcollective andsoviet farms;
-privatization offoodprocessing industry enterprises.
Privatization oflandwasdivided intothree groups:
-landrestoration toformer owners;
-landlotsforconstruction -obtaining iscarried outbythecompetition way;
-landofcollective gardens.
Thelandwhich isplanned tobeprivatized amounts to3.5ha(land incountry-side amounts
to4.5ha).TheState willbetheowner oftheremaining partoftheland-itismainly forests, State
farms (seebelow), landforscience needs andlandwhich contains natural resources. Atthemoment,
15percentoflandisprivatized which isintheprivatization plan.
Forthemostpart,privatization ofcollective andsoviet farms wasfinished in1993. They were
transformed into:
-agricultural partnerships (joint-stock companies)(to 300ha);
-private (family) farms (to10ha);
-andprivatized household plots (2-3ha).
AfewState farms remain asstud-farms, seedgrowing farms, testing stations, etc.
Onemainproblem associated withtheagricultural joint-stock companies isthatlegalpersons
donotcurrently havetherighttoownland, onlytheState andnatural persons havethisright.
Themainproblem ofprivate (family) farms isthatafterproperty restoration, themajority of
owners havetobegin theiractivity fromscratch -theyhavenomachinery, appropriate buildings, etc.
Theimpact onthethirdgroup -privatized household plots -wasthesmallest. People here
onlyhavealegalrighttolandproperty.
Privatization inagriculture hasarisen number ofproblems suchasdivision ofland, scattering
ofmain assets andinherited technical basewhich wasnotadapted foruseinsmall farms.
Foodprocessing enterprises mainly wereprivatized according totheLawonInitial Privatization
(28February 1991) byshares subscription. Producers (farmers) ofagricultural products weregrantedWT/ACC/LTU/2
Page24
therighttobuy,onfavourable terms, 50percentofvalue ofinitial capital shares ofdairy, meatand
grain enterprises andsugar factories withthepurpose ofcompensation ofproduction expenditures for
producers (farmers) andencouragement oftheircooperation.
Most enterprises havebeenalmost entirely privatized (approximately toalevelof89percent
oftheirinitial capital value). Under theGovernment 'sestablished order thepossibility tobuyallshares,
belonging totheState, weregranted toshareholders andworkers ofsuchenterprises where afterthe
privatization shares belonged toState were leftmore than20percent.
Ithasbeendecided thatalcohol industry enterprises canbeprivatized upto20percentofinitial
capital value.
Question 40
Reference ismade tothe"National Agriculture Development Programme". Please explain
what thisis.Isthisanumbrella organization fortheSowing Fund andtheFarmers Supporting
Fund?
(CanLithuaniaprovidemoredetailonthe"NationalAgricultureDevelopmentProgramme",
theSowing Fund andtheAgriculture Support Fund?)
Reply
TheNational Agricultural Development Programme (NADP) wasprepared withthepurpose
tosatisfy population demand forhighquality foodstuff; taking intoconsideration theeconomic juncture
ontheforeign markets, toincrease theexport offoodindustry production, toguarantee thefarmer 's
income wasnotlower thantheaverage; todevelop farming activities taking intoaccount ecological
limitations andtorevive andfoster ethnocultural traditions.
TheNADP fundamounts 332.5 million litasinthe1995 budget, andthisis74.6percentof
thetotalagriculture budget and8.7percentofthetotalState budget.
Thelargest amount fromtheNADP isallotted tosubsidizing (seetheanswer toQuestion 45).
Theother areas which canbemaintained bythefundofNADP: forming ofsoft-credit sources;
implementation ofprogrammes onfarmers 'settlement andinfrastructure development; buying of
thoroughbred material ofproductive plants, animals andpoultry; financing ofthestock-breeding
programme; agriculture science research, consultation andtraining; support toagricultural companies
suffered from fires; financing ofsoursoilsliming; etc.
Duetochanges ofeconomic relations, according tothedecision oftheGovernment, theNADP
willbedefined more exactly before 1July1996. Lithuania willprovide updates asappropriate onhow
itsProgramme isevolving.
TheAgriculture Support Fund for1995 (263million litas) wasestablished from theformer
various types funds of1993 and1994. Thisfundwasformed from thefollowing sources:
- means from theState budget of1995 yearassigned forfinancing ofNational Agriculture
Development Programme (55million litas);
- means from theState budget of1994 yearassigned forfinancing ofNational Agriculture
Development Programme (19million litas);WT/ACC/LTU/2
Page25
- loans tookfrom enterprises purchasing agricultural products, legal andnatural persons for
centralized buying ofmaterial resources andselling themforproducers ofagricultural products
onfavourable terms (55million litas);
- preferential loans forreturning which weretaken byentities fromtheSowing Fund ofspring
of1993 year(50million litas);
- preferential loans forreturning which weretaken byentities in1993forpurchasing ofgrains
(50million litas);
- credits assigned asaState support foragriculture suffered from drought (10million litas);
- credits assigned forpurchasing ofagricultural products in1994 year(23.9 million litas);
- andothers sources.
TheSowing Fund forspring of1993 yearwasformed temporarily from themeans assigned
toNational Agriculture Development Programme. Itnolonger exists.
AnewFarmers 'Support Fund wascreated on22June1994, toprovide general support to
theimprovement oftheinfrastructure foragricultural production andtofundlong- andshort-term loans
tofarmers. Thisyear, Lithuania isplanning toassign 50million litastothatFund. Inregard to
infrastructure improvements, theFund finances theelectrification offarmsteads, thecreation ofa
communication system, roadbuilding andmaintenance, etc.Inregard toloans, theFund finances
disability allowances forfarmers suffered from fires, strong wind, downpours, frostandcontagious
diseases ofanimals; andcompensates farmers fortheirinterest payments forloans taken outfrom
commercial banks.
Question 41
How much direct support dothese programmes andfunds provide, howissuchsupport
allocated andwhat areitspriorities?
Reply
Aswassaidintheanswer toQuestion 40,theAgriculture Support Fund wasformed from
theformer various types funds of1993 and1994.
Themeans ofthatfundareused:
-forpreferential loans forproducers (farmers) ofagricultural products;
-enterprises purchasing agricultural products andagricultural services enterprises;
-legalandnatural persons abletobuyoncentralize waythematerial resources andsellthem
forproducers ofagricultural products onfavourable terms;
-cooperation development inagriculture;
-support toagricultural companies suffered from fires;
-others needs provided bytheGovernment.
Commissions formed bytheheads ofdistricts assign loans from thisFund taking into
consideration thefarmers 'needs toobtain seeds, fertilizers, chemicals andother value andservices,
which inseparate areas ofLithuania aredifferent.
Question 42
Under theSowing Fund, farmers "getpreferential credits andobtain cheaper necessary
material resources." Please describe these preferential credits. How arethematerial resources
provided?WT/ACC/LTU/2
Page26
Reply
TheSowing Fund (aswassaidintheanswer toQuestion 40)wasaprovisional measure and
isnolonger used. Ifabudget allocation isavailable itmayberenewed infuture.
Concerning support forfarmers, seetheanswers toQuestions 40and41.
Question 43
Does Lithuania intend phasing these programmes out,particularly theSowing Fund and
theAgriculture Support Fund?
Reply
Seetheanswer toQuestion 42(about Sowing Fund) andtheanswer toQuestion 48.
Question 44
Please provide sufficient explanation ofthese policies sothattheymaybeappropriately
categorized under theAgreement onAgriculture (e.g., Aggregate Measure ofSupport or"Green
box").
Reply
Seetheanswers toQuestions 40and41.
Lithuania willbeworking toproduce adraftschedule onagriculture which willeventually
besubmitted forWTO members 'consideration.
Question 45
"Starting from 1994, theMinistry ofAgriculture setsprocurement quotas andminimum
purchase prices forthemajor kinds ofagricultural products." Please provide acomplete listof
these products, anddetails ofthese measures.
Reply
Inresponse totheLaw onState Regulation ofEconomic Relations inAgriculture
(22December 1994), theGovernment established some support measures forproducing andtradeon
agricultural products.
Given thedifficult economic andsocial situation intheagriculture sector, theCoordination
andRegulationCouncilonPurchasingofAgriculturalProductsundertheGovernmentResolutionNo.230
(10February 1995) "OntheSubsidizing ofLivestock Production in1995" established (asatemporary
measure in1995) minimum marginal prices forthepurchase ofcattle andmilk.
Theproducers (farmers) ofagricultural products andprocessing enterprises between themselves
areconcluding special treaties ontheminimum purchase price. Such measures arebeing usedinthe
beefandmilksectors withthepurpose ofencouraging beefproduction ofhigher quality andtoreduce
themilkoverproduction inthesummer season.WT/ACC/LTU/2
Page27
Inthisconnection, thereareestablished subsidies applied tofarmers forpurchased production
onminimum purchase prices. Thatsubsidies (110million litas)arepaidfromthefundoftheNational
Agricultural Development Programme (seetheanswer toQuestion 40).Actual expenditures onthe
cattle anddairy subsidies could belessthanthedesignated amount butcannot exceed 110million litas
inthisbudget year.
On1July1995, theGovernment introduced subsidies forcattle inthetotalamount of10million
litastopayforstorage andtoimprove marketing possibilities forpork. Funds aresupposed tocome
fromtheNational Agricultural Development Programme, bringing theprevious amount tototalsubsidy
fundof120million litas.
Thetotalsubsidy fundof120million litasisdivided inthefollowing manner:
Cattle subsidies 60million litas
Dairy subsidies 50million litas
Farmers 21million litas
Processors 29million litas
Porksubsidies 10million litas
Subsidies arepaidtofarmers through theprocessors inorder toreduce paperwork thatwould
beinvolved indealing withindividual farmers. Processors canreceive andpaysubsidies totheirfarm
suppliers provided thattheypaytofarmsuppliers atleasttheminimum purchase prices specified by
theabove-mentioned special treaties (applied tobeefanddairy).
Thesubsidy paidforthehigher grades ofcattle slaughtered isforaquota of85,000 mt.Under
thecurrent implementation mechanism thesubsidy willnotbepaidonanyproduction above thequota.
Thesubsidy being paidformilkproducers isforaquota of700,000 mt,which istheestimated
production forthehighproduction period of1Mayto1October 1995. Unlike forcattle, thesubsidy
ispaidonallproduction, notonlyonthehighest quality.
Thedairy programme alsohasstorage andmarketing subsidies forprocessors. Thepurpose
ofthisprogramme istoencourage processors tostore butter andcanned milkproduced during the
highproduction season (May toOctober) foruptosixmonths andfermented cheese forupto1.5months
sothatitcanbemarketed lateratahigher price. Thequota amounts forbothstorage andmarketing
subsidies are4,500 mtforcheese, 12,000 mtforbutter and12million conventional tinsforcanned
milk.
Arrangements forporksubsidies arestilltobeworked outbytheMinistry ofAgriculture.
Depending ontheavailability offunds intheNational Agricultural Development Programme subsidies
maybeintroduced forsome crops inthefall.
For1996, theprocurement quotas areprovided for:grains, flax,sugar beets, rapeseed, cattle,
swine andmilk. Inaddition, Lithuania plans tosupport thestorage ofsurplus offoodstuff foruseduring
thewinter, butitishardtosaywhatkindofsupport foragricultural willbeimplemented inthenext
year, since itdepends ontherevenues oftheStatebudget andtheavailability offunds foragricultural
programmes. Sofar,theLaw onState Regulation ofEconomic Relations inAgriculture
(22December 1994), states thatnotlessthan10percentofthebudget expenditure hastobeallocated
tosupport agriculture inLithuania. However, thisLawdoesnotindicate clearly howfundshould be
allocated forspecific purposes orprogrammes andcovers alltypes ofsupport provided through
agricultural andrural developments schemes.WT/ACC/LTU/2
Page28
Question 46
What procurement quotas andprice support mechanisms areinplace andforwhich
products? Howdotheyoperate? Does Lithuania intend phasing outtheprocurement quotas and
price support mechanisms onaccession totheWTO? Ifso,howdoesitintend doing so?
Reply
Concerning products forwhich theprocurements quotas aresetandpricesupport seetheanswer
toQuestion 45.
Subsidies arepaidforagricultural products purchased under procurement quotas inorder to
prevent increases inprices forconsumers. Forseparate products (grains, sugar beets) softcredits are
granted forpurchases under theprocurement quotas.
Concerning theapplying ofsuchmeasures inthefuture, seetheanswer toQuestion 48.
Question 47
What types (andlevels) ofindirect support areapplied (including exemptions orreductions
oflandtaxandlandrenttax)?
Reply
Atthemoment thefollowing kinds ofindirect support areapplied:
TheStatesupports theproduction ofagricultural products byfinancing fromthebudget land-
reclamation works, liming ofsoursoils, roadbuilding, theactivity 'srearrangement ofentities settled
inthelands oflowproductivity andreduction ofdifferent farming economic conditions, agricultural
science research, consultations andtraining.
There areapplied suchkindoftaxprivileges:
- thepreferentialVATtariffof9percentisappliedforcertainagriculturalproductsandfoodstuffs
produced from them (forother production the18percentVAT tariff isapplied);
- theproducers ofagricultural products areexempted fromtheprofit tax(enterprises mustpay
24-29 percentofprofit tax);
- forfarmers regaining land, thefirstthree years areexempted from thelandtax.
TheLawonSugarwasadoptedon27April1995,regardingthenormalizingtherelationsbetween
sugar beetproducers, processors, sugar market participants andState institutions. According tothis
Law, theGovernment shallsupport thedevelopment ofthedomestic sugar rawmaterial production
andprocessing industry andguarantee andprotect domestic sugar supply.
Upon founding asugar manufacturers 'association, thesanctions oftheLawonCompetition
(15September 1992), which areestablished fordominant market entities, shallnotbeapplied.
Under theLawonSugar (27April 1995) sugar beetprocessors shallbegranted seasonal soft
credits which allow topayfornotlessthan40percentofsugar beetspurchased according toquantities
setbytheGovernment (forinformation onthatLawseetheanswer toQuestion 13).WT/ACC/LTU/2
Page29
Question 48
Does Lithuania plantoadjust allmentioned policies inlight ofWTO requirements? If
so,how?
Reply
TheGovernment oftheRepublic ofLithuania provides toreorganize theagricultural sector
insuchawaythatitwould become asefficient aspossible. TheGovernment isseeking tocreate a
support system which would encourage theefficient production ofagricultural products.
Nodetailed planhasyetbeenprepared forthetransition fromsoftcredits andsubsidies applied
bymeans ofminimum purchase prices toadirect support system. Some more timeisnecessary for
thepreparationandadoptionofsuchaplan.Itsexactformwilldependuponcircumstancesinagriculture,
farmers 'needs andontheGovernment 'sfinancial abilities.
Atthemoment, Lithuanian agriculture finds itself particularly inaverydifficult state. The
Government therefore needs, asmuch aspossible, tosoften thenegative social consequences inthe
country-side. Lithuania 'sability toreduce support toagriculture nowistherefore limited. However,
Lithuania isready toaccept obligations similar tothose accepted bycomparable WTO members.
3. Financial, budgetary andfiscal policy
Monetary policy andthebanking system
Question 49
What isthepresent State share inthecapital ofcommercial banks? Exactly when will
theState'sshare bereduced, asproposed, to20percentorless?
Reply
Withtheexception ofthreebanks, theStateshare inthecapital ofcommercial banks represents
10.3percentofthevoting share stock, which hasalready surpassed theoriginal target of20percent.
Forthethree exceptions -Savings Bank ofLithuania, Agricultural Bank ofLithuania andState
Commercial Bank ofLithuania -theStatemaintains 51percentofthevoting stock ineachofthese.
Question 50
What aretheconditions forobtaining abanking licence (licensing procedure, competent
authorities, criteria applied, etc.)? Arethere restrictions ontheparticipation offoreign capital
innational commercial banks?
Reply
Lithuania hassubmitted anEnglish language copy ofitsnewLawonCommercial Banks
(21December 1994). Asummary ofthatlawfollows.
TheBank ofLithuania reviews allapplications forlicences toopencommercial banks, whether
submitted byLithuanians orforeigners. Alicence willbeissued bytheBoard oftheBank ofLithuania
iftheapplicant isabletoprove thatit:WT/ACC/LTU/2
Page30
(i) hasaccumulated theminimum amount offixed capital (atthemoment itis10million litas);
(ii) retains managers withthenecessary qualifications, experience andreputation torunabank;
(iii) provides details onitsbusiness plan;
(vi) provides information concerning theBank'sboard andcouncil; andother details specified
intheLaw.
TheBank ofLithuania issues itsdecision within twomonths ofthedateofreceipt ofthe
applicationunlessitmustrequestadditionalrequirementsonforeignerswishingtoestablishacommercial
bank.
There arenorestrictions ontheparticipation offoreign capital innational commercial banks.
However, foreign aswellasdomestic investors whointend toacquire 10percentormoreofaparticular
bank'scapital must firstobtain thepermission oftheBank ofLithuania.
5. Foreign anddomestic investment policy
Question 51
Although trade-related investment measures (TRIMs) arementioned onthecover page
ofdocumentL/7551,furtherreferencestoTRIMsandLithuania'sintentionsregardingnotifications
andtransition could notbefound elsewhere inthedocument. Please provide information covering
these matters.
Reply
Thecover pageoftheLithuanian Memorandum ontheForeign Trade Régime (L/7551) was
prepared bytheGATT Secretariat, andtheyprobably hadinmind Section 5ofPartIVofthe
Memorandum ("Foreign anddomestic investment policy").
Theprovisions forinvestments aredetermined bytheLawonForeign Capital Investment in
theRepublic ofLithuania (13June1995) andother laws, orbyinternational agreements towhich the
Republic ofLithuania isaparty.
AReply concerning TRIMs andLithuania 'sintentions regarding notification ispending.
Question 52
What definition offoreign investment isbeing usedinthissection? What percentage of
foreign ownership isallowed intherestricted sectors? Does Lithuania allow theunrestricted
transfer ofreturns fromforeign investments? Ifnot,under whatcircumstances could suchtransfers
beprevented orrestricted (apart from profit taxes)?
Reply
According tothenewLawonForeign Capital Investments intheRepublic ofLithuania
(13June1995), thecapital investment offoreign origin isthecapital offoreign origin which belongs
toforeign investors andisinvested intheRepublic ofLithuania. Itmaybe:
(i) monetary funds infreely convertible currency orinthenational currency ofLithuania;
(ii) thefollowing property valued infreely convertible currency ornational currency ofLithuania
forforming orincreasing theauthorized capital:WT/ACC/LTU/2
Page31
- movable andimmovable property,
- intellectual andindustrial property.
Investment ofcapital offoreign origin shallbepermitted inallspheres ofeconomic-commercial
activities withtheexception ofthespheres:
(i) relating tosecurity anddefence oftheState;
(ii) manufacture orsaleofnarcotic substances, andother non-medicinal, poisonous substances
thatproduce strong effect;
(iii) growing, processing, andsaleofcultures thatcontain narcotic andpoisonous substances, or
substances having strong effect;
(iv) organizing oflotteries.
Forcarrying outlicensed activities established bytheLawonAmendments andSupplements
oftheLawonEnterprises (5July1955) alicence orpermit bytheGovernment oranyother institution
authorized byit,must beobtained.
ThisLawrequires bothdomestic andforeign interests toobtain alicence toengage inthe
following activities:
(i) prospecting ofnatural resources;
(ii) theexploitation ofnatural resources;
(iii) repair ofsports andhunting firearms, weapons;
(iv) pharmaceutical activity;
(v) cultivation andsaleofcrops containing narcotic, highly effective orpoisonous substances;
(vi) production ofalcohol products;
(vii) import ofalcohol products toLithuania, wholesale andretail trade byalcohol products;
(viii) providing ofmedical services, medical treatment andhygiene practices;
(ix) veterinary practice;
(x) lawyer practice, unless thelawsprovide otherwise;
(xi) establishment ofeducational institutions, enterprises andinstitutions engaged inthehealthiness
activity;
(xii) carrying outofgeodetic andtopographical works, publishing andprinting oftopographical
plans andmaps aswellascartographic charts;
(xiii) activity bytheinternational transportation, unless thelawsprovide otherwise;
(xiv) production oftobacco products, import oftobacco products toLithuania;
(xv) purchasing andremelting ofcopper andother non-ferrous metals, itsalloys, scrap andwaste
inLithuania;
(xvi) tourism services;
(xvii) organizing oflotteries assigned forcharity andsupport purposes;
(xviii) purchasing offerrous metals scrap anditswaste inLithuania;
(xix) purchasing andprocessing ofprecious metals waste andscrap;
(xx) providing ofcommunication services using ofcommon network oftelecommunications lines
andstations;
(xxi) construction andexploitation oftheinstallations radiating electromagnetic waves;
(xxii) researching, preservation andrestoration ofimmovable cultural values; preparation ofthe
conditions, programmes andprojects ofsuchworks; preservation andrestoration ofmovable
cultural values;
(xxiii) projecting andconstruction oftheState roads;
(xxiv) manufacturing,importandexportofthenarcoticsandhighlyeffectiveandpoisonoussubstances
(which arenotusedforpharmaceutical purposes), wholesale andretailtradebyitsinLithuania;
(xxv) import ofspecial foodstuff andfoodadditives, wholesale trade byitsinLithuania;WT/ACC/LTU/2
Page32
(xxvi) production ofseals, stamps, hunting knives;
(xxvii) establishment oftheshooting-galleries andstands ofhunting shooting;
(xxviii) trade bythetransport means onthecommission bases; projecting, production, instillment,
assembling andexploitation oftheprotective fire-signalling;
(xxix) production, import, transportation, trade, usage, storage andburying ofthechemical materials
which canharmfully acttheenvironment;
(xxx) commercial activity related withtheprecious metals andjewels;
(xxxi) mediation activity inthepublic turnover ofstock exchange;
(xxxii) stock exchange activity;
(xxxiii) investment andreinvestment tosecurities andtrade byitsasamain activity; possession of
theinvestments companies property, unless thelawsprovide otherwise;
(xxxiv) import, export, wholesale andretail trade bytheoilproducts; retail trade bytheliquefied
gas;
(xxxv) energetic activity;
(xxxvi) selling ofsports andhunting firearms, ammunition, weapons, explosives andpyrotechnics;
(xxxvii) inventory oftheforests andpreparation oftheforestry projects;
(xxxviii) export ofrawwood;
(xxxix) theforwarding agent services providing intheairandrailway transport;
(xxxx) ships tugging;
(xxxxi) rescuing andunderwater technical works;
(xxxxii) locman services;
(xxxxiii) manufacturing oftheweapons, parts thereof, explosives andpyrotechnics;
(xxxxiv) fulfilment ofaudit;
(xxxxv) mediation services foragiving ajob;
(xxxxvi) import andproduction ofbiological plants protection measures andtrade byits;
(xxxxvii) realestate activity.
OnlyStateenterprises andcompanies ofspecial destination (stock andlimited stockcompanies),
which allshares belong totheState, havetherighttoengage inthefollowing activities withthelicences
giving bytheGovernment established order:
(i) manufacturing ofweapons, ammunition andexplosives;
(ii) production ofsecurities, monetary signs andcoins, post-stamps;
(iii) transportation, usage orother activity related withradioactive, nuclear material andwaste
thereof.
Only State enterprises, localenterprises andcompanies ofspecial destination havetheright
toengage inthefollowing activities withthelicences given bytheGovernment established order:
(i) production, import ofthenarcotic andhighly effective andpoisonous substances, wholesale
trade byits;
(ii) production ofundenatured ethyl alcohol andalcohol beverages which contain more than
22percentofethylalcohol byvolume (thisrightisgiven onlytoStateenterprises unless the
LawonAlcohol Control provides otherwise);
(iii) treatment ofpatients illwithinfectious diseases listed inthespecial listofMinistry ofHealth
Care;
(vi) treatment ofanimals illwithespecially dangerous diseases;
(v) postwork (only theState enterprise "Lietuvos pastas");
(vi) accepting andpaying offofpostal orders (only theState enterprises "Lietuvos pastas");
(vii) production, import andrealization ofthehighly effective substances which arenotofmedicinal
destination.WT/ACC/LTU/2
Page33
Without thelicence given bytheGovernment established order fortheenterprises which less
then50percentshares belong toState isprohibited:
(i) toexploit railway, ports, airports andState roads;
(ii) toexploit gas-pipes, pipelines, communication lines, electric transmission lines, heatnetwork
ofState importance andtoensure technical functioning ofsuchobjects.
Forcredit andbanking activities, alicence from theLithuanian Bank isnecessary.
Theprocedure forfounding aforeign commercial bank oracommercial bank withforeign
capital andtheprocedure fortheiroperation shallbeestablished bytheLawonCommercial Banks
(21December 1994). Seetheanswer toQuestion 50.
Profit,income,ordividendsreceivedinaccordancewiththeLawonForeignCapitalInvestments
shallbelong toforeign investors bytherightofownership. Foreign investors shallhavetheright, after
having paidthetaxes, totransfer theprofit, income ordividends belonging tothem bytherightof
ownership toaforeign country without anyrestrictions.
Foreign investors mayalsoexport theirprofit, income ordividends intheformofgoods and
services purchased onthedomestic market, orreinvest thesame intotheeconomy oftheRepublic
ofLithuania.
Question 53
Arethere anyrestrictions withrespect totheprovision orsupply ofservices byforeigners
inLithuania, either through commercial presence (i.e.,investment) orwithrespect toindividuals
providing services?
Reply
Seetheanswer toQuestion 1.Lithuania isintheprocess ofestablishing alegalregime for
services. Inaddition, asdescribed intheanswer toQuestion 52,Lithuania requires business licences
toengage incertain types ofactivities.
Question 54
Aretherevenues and/or profits from foreign investments exempt from taxonlywhen
transferred abroad? Iftransferred, aretheysubject toprofit tax?
Reply
Profit from foreign investment issubject toprofit taxunless benefitting from anexemption
described below.
Profits, dividends andother receipts offoreign investors which aretransferred abroad arenot
subject toanyadditional taxation inLithuania, butprofit taxmustbepaid. Itshould benoted thatthe
taxation conditions applied toforeign enterprises arenotworse thanthoseapplied tothelegalandnatural
persons ofLithuania.
Exemptions: Ifaforeign investor hasacquired atleast30percentoftheenterprise 'sauthorized
(ownership) capital orhasinvested foreign capital worth ofaleastUS$2 million, suchenterprise shallWT/ACC/LTU/2
Page34
beexempt from profit (income) taxforthree years fromthemoment theincome isreceived. Forthe
subsequent three years, theenterprise willhaveitsprofit (income) taxreduced by50percent.
Question 55
Does Lithuania apply restrictions onforeign participation inthecapital (minimum or
maximum limit) ofcompanies incertain sectors ("joint-ventures")?
Reply
Thesizeofforeign capital isnotrestricted.
Fortheestablishment ofstock companies theminimal sizeofinitial capital is100000litas;
forlimited stock companies -10000litas. Inthecaseoftheestablishment ofenterprise ofspecific
destination theshare ofprivate capital cannot exceed 30percent.Thiscondition isvalid equally for
domestic andforeign investors.
Question 56
Canforeign investors acquire property rights without restrictions orhave theyonlythe
right torentthelandandbuilding needed fortheir business activities?
Reply
Enterprises shallhavetherighttopossess bytherightofownership, lease, oruseinanyother
manner, thebuilding necessary forcarrying outitsactivities, aswellastotakeonlease landlotsin
accordance withthelawsofLithuania.
Under theLawonForeign Capital Investment intheRepublic ofLithuania (13June1995)
landlotsowned bytheState maybeleased toenterprises forupto99years. Private landlotsmay
beleased according totheagreement between theparties.
Theorder oflandleasing forforeigners, whohavepermission toliveinLithuania, andforeign
legalpersons, which havepermission forforeign investment, isprovided bytheGovernment Resolution
No.391(23May1994) "OntheApproval ofOrder oftheState Land Leasing forNon-Agriculture
Activity forForeign Legal andNatural Persons andJoint-ventures andForeign Capital Enterprises".
6. Government procurement
Question 57
Itisstated thatalawongovernment procurement istobeprepared in1994. Isacopy
nowavailable? Isthelawyetinforce? What areLithuania 'sintentions regarding adherence to
theGovernment Procurement Agreement?
Reply
Lithuania iscontinuing itswork todraftaLawonGovernment Procurement which willbe
consistentwiththerequirementsoftheWTOAgreementonGovernmentProcurement.Lithuaniaexpects
thatthislawwillbeadopted in1995 or1996.WT/ACC/LTU/2
Page35
Inthemeantime,Lithuania'sgovernmentprocurementisregulatedbytheGovernmentResolution
No.510,which hasbeeninforce since 12April 1995.
According tothisResolution incarrying outgovernment procurement, goods produced abroad
arepermitted tobepurchased when enterprises registered inLithuania donotproduce suchgoods or
produce themininsufficient quantities; when technical indices ofdemanded goods arelower thanthose
ofanalogous goods produced abroad, orwhen prices ofLithuanian goods arehigher thanthose ofgoods
produced abroad. These regulations arealsobeapplied topurchasing services.
7. State trading andState enterprises
Question 58
What wastheshare ofState trading intotal trade on1January 1995? What arethe
sectors concerned (including services)? Hasthedraft LawofTrade enabling theState toestablish
trade monopolies been approved bytheSeimas? Ifso,what arethesectors affected?
Reply
AsofJanuary1995,Statetradingaccountedfor13.6percentoftotalretailcommodityturnover.
Statetrading iscarried outinthose trade enterprises which arenotprivatized yet,andincludes trade
infoodstuffs andindustrial goods, public catering. Theprivate andcooperative trade makes upthe
remaining partofthepercentage.
TheLawonTrade wasadopted on12January 1995. Most ofitsprovisions donotdealwith
specific obligations covered under theWorld Trade Organization. However, oneprovision would allow
theGovernment toestablish trade monopolies inallsectors -in"special cases oncertain goods".
Based ontheabove-mentioned provision andtheLawonAlcohol Control (18April 1995),
theGovernment ofLithuania mayintroduce awholesale andretail trade monopoly ofalcoholic
beverages. Theobjective ofthatLawistoreduce alcohol consumption ingeneral because ofthedamage
itcauses tohuman health, through theintroduction ofaStatemonopoly onalcohol manufacture, sale
andtrade.
ThisLawshallregulaterelationsinconnectionwiththemanufactureofalcoholandfoodproducts,
withalcohol additives, andother products containing ethylalcohol, theirmanufacture, internal trade,
storage, import, export anduse.
Theright tomanufacture undenatured ethyl alcohol aswellas,alcoholic beverages, whose
ethylalcohol volume concentration exceeds 22percent,shallbegranted onlytoStateenterprises and
enterprises ofspecial destination. From 1January 2001, thisright shall begranted onlytoState
enterprises. Theconditions andorder oftheStatemonopoly ofalcohol product manufacture shallbe
established bythelawsandtheGovernment 'sresolutions (forinformation onthatLawseetheanswer
toQuestion 13).
TheSeimas(Parliament)isalsoconsideringaLawonTobaccoControlwhichwouldalsoprovide
certain State restrictions.
Related totheQuestion about theestablishment ofmonopolies, according totheLawonSugar
(27April 1995), theGovernment shallsupport thedevelopment ofthedomestic sugar rawmaterial
productionandprocessingindustry.Also,itshouldbenotedthatthesanctionsoftheLawonCompetition
(15September 1992), which areestablished fordominant market entities, shall notbeapplied inWT/ACC/LTU/2
Page36
connection withthefounding ofasugar manufacturers 'association (forinformation onthatLawsee
theanswers toQuestions 13and47).
Question 59
Would Lithuania provide information ontheconditions under which itwould establish
State trade monopolies forspecified groups ofgoods?
Reply
Seeanswer toQuestion 58.
Question 60
Please listallState enterprises dealing withagriculture andfood. Foreachofthese, please
provide theinformation required bythe1960 Questionnaire onState Trading (BISD, Ninth
Supplement, pages 184-185, February 1961). DoanyState enterprises owned, operated or
controlled byLithuania, oranyother enterprises have exclusive orspecial privileges intrade,
inthesense ofGATT Article XVII? Ifso,please provide details.
Reply
Please, seetheanswer toQuestion 58.Lithuania willbeprepared toprovide amore official
response tothe1960 Questionnaire onState trading onceitslegalregime hasevolved further.
Concerning therestofState shares inenterprises dealing withagriculture andfood, seethe
answer toQuestion 39.
Also, except asspecified intheanswers toQuestions 37and58,Lithuania doesnotprovide
foranyspecial privileges orexceptions intrade forenterprises.
8. Subsidy policy
Question 61
Within thecontext ofthissection, howissubsidy defined (e.g. intheWTO Subsidies
Agreement sense)?
Reply
Subsidies provided inLithuania aredefined asintheWTO Agreement onSubsidies.
Question 62
What arethecriteria thatdefine "large scale" subsidies asreferred tointhissection?
Reply
Thenational budget for1995 provides forapproximately 106.2 million litasofsubsidies, or
0.5percentofGDP.WT/ACC/LTU/2
Page37
Thelargest subsidies areprovided fortheenergy system. Themain reason forgranting such
subsidies isthattheLithuanian population isnotabletopayforproviding thermal energy andgassupply.
Themajority ofsubsidies (about 72million litas)isallotted forthecompensation ofsettariffs
ofthermal energy forinhabitants.
Afurther amount (about 19.3million litas) isallotted forthecompensation ofsettariffs of
gas,which isusedfortheheating ofliving quarters.
Alsosome subsidies areprovided totheStateenterprises "Lietuvos pastas" (Lithuanian Post)
and"Lietuvos gelezinkeliai" (Lithuanian railway), State agency ofinland water transport.
About theagriculture support system seetheanswers toQuestions 40,41,and45.
Question 63
Does theGovernment deliver assistance and/or subsidies through economic levers such
asthetaxation system, foreign anddomestic investment policy, excise duty, other exemptions
forexported goods, orthrough privatization orother methods?
Reply
TheGovernmentprovidessomeassistancethroughthetaxationsystemalso.Thereareadvantages
ofvarious forms: oftariff, oftaxsize,oftaxation base, ofrespite andexemption, forexpenditures
forsupport andcharity, forenterprises ofpriority branches ofeconomy (seetheanswer toQuestion 37),
forsmall enterprises (seetheMemorandum), forjoint-ventures andforeign capital enterprises (see
theanswer toQuestion 54).
Aswasmentioned intheMemorandum, exported goods areexempted from theVAT. Also
exemptions onVAT include some goods andservices, which were listed intheMemorandum.
Excise duties arenotimposed onimported goods thatarefreefrom customs dutyaccording
totheLawonCustoms Tariff (27April 1993). Excise duties alsoarenotimposed onexported goods.
Concerning theindirect support foragriculture seetheanswer toQuestion 47.
Thelocalauthorities havetherighttogrant reductions intaxorexempt from profits taxfor
adetermined period (butinsuchcases compensation from thelocalbudget hasbeprovided).
9. Freeeconomic zones
Question 64
Insection 9,page 36Lithuania raises thepossibility ofcreating freetrade zones. Can
Lithuania provide more details onwhen such zones might beestablished andhowtheywould
operate?
Reply
TheLawonFreeEconomic Zones waspassed on28June1995, andwillenterintoforce with
thepassing ofotherspecial lawsconcerning theimplementation ofworking mechanism offreeeconomic
zones.WT/ACC/LTU/2
Page38
Theshort overview ofthatLawfollows (thetranslated version hasnotyetbeenprepared):
Themain purpose oftheLawonFreeEconomic Zones istocreate favourable conditions for
taxes, customs duties, legalandfinancial operations forlocalandforeign enterprises, tostimulate an
international trade, foreign investments andtocreate anewworking place.
Thespheres ofactivities offreeeconomic zones willcover commercial, industrial, export,
banking andother activities. Such spheres shallbedetermined bytheseparate lawforestablishing
aspecial zone.
Other lawsandnormal acts,except theConstitution oftheRepublic ofLithuania andthe
above-mentioned Law, willbevalid inzoneasmuch asthisLawisboundless.
Thefollowing spheres ofactivities andinvestment willbeforbidden:
- safeguardingofthenationalsecurityanddefence;theproduction,storageandsellingofweapons,
ammunition, explosives;
- manufacturing, storage ofdangerous andradioactive materials;
- manufacturing, storage andselling ofnarcotic andpoisonous substances;
- cultivation andselling ofcrops containing narcotic, highly effective orpoisonous substances;
- manufacturing oftobacco products;
- manufacturing ofvodka, liqueur andother spirits;
- manufacturing ofsecurities, money, poststamps;
- establishing ofgambling houses;
- organization oflotteries;
- publishing, except owndemands; broadcasting andorganization ofradio andtelevision
programmes, except technical maintenance ofprinting house, radio andtelevision;
- treatment ofpatients illwithdangerous andespecially dangerous infectious diseases;
- treatment ofanimals illwithespecially dangerous diseases;
- regulation oflabour migration 'squestions.
SomeactivitiesaccordingtotheLawonAmendmentsandSupplementsoftheLawonEnterprises
(5July1995) shallbeprohibited without alicence issued bytheGovernment orother authorized body
(seetheanswer toQuestion 52).Foreign investment forexploitation ofStatenatural resources without
concession willbeprohibited.
Theinitiators oftheestablishing offreeeconomic zonemaybealocal government body,
domestic orforeign economy subjects, registered intheRepublic ofLithuania. Zoneshallbeestablished
bytheseparate law.Thatlawwillcontain limits ofterritory, spheres ofactivities andsimilar issues.
AftertheSeimas(Parliament)passesthelawontheestablishingofconcretezone,theGovernment
shallorganize thecompetition forthebestbusiness planandforthepreparation oftheestablishing
group ofthezone.
More than50percentofthezone'smembers ofmanagement mustbecitizens oftheRepublic
ofLithuania. Themanagement ofthezoneshallgiveinformation about allactivities totheLithuanian
Government. Thesupervision offreeeconomic zones shallbegiven bytheGovernment ofLithuania
orother State bodies.
Enterprises registered inazoneandtheiremployees shallpaythefollowing taxes:
-profit taxoflegalpersons;WT/ACC/LTU/2
Page39
-income taxofnatural persons;
-landrenting;
-State social insurance taxes.
Enterprises registered andworking inazone, which areengaged inthemanufacturing ofgoods,
shallpaylower by50percentratelandlease. Ifforeign investment ismore than30percentofthe
enterprise'scapitalandnotlessthanUS$2million,thatenterpriseshallbeexemptedfromincome(profit)
taxes foraperiod ofa3year. Forthenext3years thatenterprise shallpay50percentlower income
(profit) taxrate.
Enterprisesoperatinginafreeeconomiczoneshallbeexemptedfromthevalueaddedtax(VAT).
Dividends offoreign investors received infreeeconomic zones shallnotbetaxable.
Goods imported tofreeeconomic zone(exported also) shallbeexempted from thecustoms
duties, taxes andother restrictions andprohibitions ofeconomic sense, applied inLithuania.
Import andexport ofgoods fromzonetocustoms territory ofLithuania shallbeprovided by
theappropriate lawsandothernormal actsofLithuania, which regulate theimport andexport operations
withforeign countries.
Foreign investors shallhavetherighttotransfer abroad theirincome without anyrestrictions.
Activities ofbanks andinsurance companies inazoneshallberegulated byLithuanian laws
oncommercial banks andinsurance. Forsettlement inazoneshallbeusedlitas(national currency)
orfreeconvertible currency.
RelationsoflandpropertyandleasingshallberegulatedbyLandLawandLawonLandLeasing.
Thebuildings andother objects, which areownbytheState(local) government body, shallbeleased
orsoldaccording tothelawsofLithuania.
Thefunctions ofsanitary andhygiene protection, safeexploring ofenvironmental andnatural
resources, fireandlabour inspection shallbemanaging byState inspections.
Theforeign investor shallhavetheguaranteed rightforowning 100percentofzone'senterprise
property. Theinvestment andinvestment being conditions forthoseinvestors, whoinvested theircapital
inthevalidity period ofsuchLaw, shallnotbechanged 5years from theinvestment beginning.
10. Protection ofintellectual property rights
Question 65
Enacting therelevant implementing legislation, Lithuania hasrecently become party to
theWIPO Treaty, theParis Convention fortheProtection ofIndustrial Property, thePatent
Cooperation Treaty andtheBerne Copyright Convention. What further remains tobedone to
bring Lithuania 'sintellectual property lawsfully tothestandards setoutinTRIPS?
IfLithuania hasnotalready metTRIPS standards, howsoon willthese standards be
satisfied? WillLithuania beseeking torelyontheTRIPS transition period?WT/ACC/LTU/2
Page40
Question 66
Does Lithuania consider itscurrent domestic legal framework tobesufficient forthe
adequate andeffective protection ofintellectual property rights? How doesLithuania propose
tocover anydeficiencies?
Question 67
WhatstepswillLithuaniatakeinregardtoobligationsundertheTRIPSAgreementrelating
toenforcement ofintellectual property rights inLithuania?
Replies toQuestions 65,66and67
TheGovernment ofLithuania hasalready implemented initslawsthemajority ofthebasic
TRIPS provisions. Inparticular thenational legislation including theCivil Code, LawonTrademarks
andService Marks (3June1993), Law onPatents (18January 1994), Law onCompetition
(15September 1992), LawonIndustrial Design (4July1995) (after thetranslation thisLawwillbe
submitted toWTO Secretariat), etc.corresponds inprinciple tothemostsubstantial TRIPS provisions.
Some other lawsarenowbeing prepared orarebeing considered bytheSeimas (Parliament) (Law
ontheProtection ofComputer Programs andDataBases, etc.).
On14December 1994, Lithuania became amember oftheBernConvention onthecopyright
protection. Intheareaofcopyright andrelated rights, Lithuania willjointheRome Convention (of
1961) andtheGeneva Convention (of1971) by31December ofthisyear.
Copyright andrelated rights protection inLithuania isprovided under theCivilCode. However,
themechanism ofpractical fulfilment ofthelawwhich isincorporated intheCivil Code isnotyet
created. Itisnecessary tomake some changes andamendments intheCivilCode intheareaofcopyright
protection, ortoprepare aseparate lawoncopyright protection, based onamodel proposed bythe
WIPO.
Concerning trademarks, theLawonTrademarks andService Marks (3June1993) completely
conforms toTRIPS required standards. Itmustbestressed, thatthemain precondition forLithuania
joining theParisConvention wasthepassing ofappropriate lawsontrademarks andpatents. TheLaw
onTrademarks contains provisions forcustoms activity ensuring theprotection oftherights oftrademark
owners.
Geographical indications forcommodities arepartially regulated bytheLawonCompetition
(15September 1992). Article 7ofthatLawprovides thateconomic entities areprohibited tomislead
theconsumer byindicating incorrect information ontheorigin ofgoods. However, protection of
geographical indications isinsufficient anddoesnotyetcomply withTRIPS requirements. Lithuania
iscommitted topassing theappropriate lawconforming withtherequirements oftheParisConvention
before 31December ofthisyear.
TheLawonIndustrial Designs waspassed on4July1995, andwillenter intoforce from
1September 1995. Thisdocument wasprepared taking intoaccount therequirements oftheParis
Convention andconforms toTRIPS requirements regarding industrial design.
Thenational Patent Law(18January 1994) isalsoinconformity withTRIPS requirements.
Concerning theplant variety protection seetheanswer toQuestion 31.7.WT/ACC/LTU/2
Page41
Protection oflayout-designs ofintegrated circuit isnotprovided forbylegalactsinforce at
themoment. Lithuania willpasstheappropriate lawontheprotection oflayout-designs ofintegrated
circuits before 31December ofthisyear.
Concerning thecontrol ofanti-competitive practices incontractual licences, theLawon
Competition doesnotcontradict, andismainly compatible with, therequirements ofitems 1and2
ofArticle 40oftheTRIPS Agreement. Theblock exemption ofcompetition actsnowvalidinLithuania
provides thattheterms andpractice ofgiving licences related withindividual property rights, canpermit
abuse oftherights ofintellectual properties andhasareversal effect forcompetition intherelevant
market.
Bythefollowing Lithuanian lawstheprotection oftrade secrets isprovided: Criminal Code;
LawonState Supervision ofPrecious Stones andMetals; LawonForeign Capital Investment; Law
onStateControl;LawonCreditUnions;LawonTrade;LawonCustomerRightsProtection;Companies
Law; LawonScience andStudies; LawonLabour Contract, other. These lawsdefine theresponsibility
ofofficials andofficers tokeeptrade secrets andguarantee itsprotection. There arecurrently no
intentions toprepare aseparate lawonprotection oftrade secrets.
Atthistime, thedraftoftheLawontheProtection oftheComputer Programs andDataBases
isbeing prepared. ThisLawwillcover restrictions ofprograms anddatabaseusers'rights forimporting,
exporting, passing, renting onreceiving programs anddatabases.
ThemembershipintheBernConvention,theCivilCode,theCriminalCode,theLawonPatents,
theLawonIndustrial Design regulate theenforcement ofintellectual property rights.
TheCivilCode andtheCode ofCivilProcess oftheRepublic ofLithuania provide procedures
which protect theviolated rights andinterests including intellectual property rights.
Inacaseofinfringement oftheintellectual property rights shallbeprosecuted bythecivil
action, ifitisnotacriminal violation. Thepreliminary investigation ofacaseusually havetobefinished
intwomonths.
TheCivilCodeprovidestheprotectionofcopyright.Theinfringerofcopyrightmustcompensate
thedamage, determined bythecourt. Theamount ofcompensation shallnotbelessthan500litasand
notbigger than10,000 litas. Theillegally made copies maybeconfiscated ordestroyed according to
thedecision ofthecourt. Theequipment usedforillegal activity maybeconfiscated also.Lithuanian
lawssatisfy therequirements ofArticles 41-61 ofTRIPS.
CHAPTER V. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC RELATIONS
WITH THIRD COUNTRIES
1. Brief description ofbilateral trade andeconomic agreements andintegration arrangements
Question 68
HasLithuania concluded bilateral investment treaties withprovisions ontheprotection
offoreign investment? IsLithuania currently negotiating anybilateral agreements toprotect and
promote foreign investments?WT/ACC/LTU/2
Page42
Reply
AllofLithuania'sinvestmenttreatiesareconcludedonthebasisofforeigninvestmentpromotion
andprotection fromtheexpropriation, nationalization orsimilar measures. Under those agreements,
which arecoordinated withinternational standards, thestatus ofMost-Favoured Nation orNational
Treatment isgiven forforeign investors.
Agreements oninvestment promotion andprotection havebeensigned andenforced withChina,
Denmark, Finland, France, Great Britain, Netherlands, Norway, Poland, Romanian, South Korea,
Sweden andSwitzerland. AnAgreement withtheUnited States isnowbeing renegotiated. Alsothere
isavalid agreement withtheMultilateral Investment Guarantee Agency (MIGA).
AgreementswithGermany,Israel,Italy,Kazakhstan,theCzechRepublic,Spain,Turkey,Ukraine
andVenezuela aresigned butarenotyetinforce.
Currently Lithuania isnegotiating bilateral agreements withAustralia, Malaysia, Singapore,
Tunisia, Vietnam, Kuwait, andBelgium andLuxembourg economic union.
Question 69
Lithuania states thatatrilateral FreeTrade Agreement between Lithuania, Latvia and
Estonia isinforce, andthatFreeTrade Agreements havebeensigned withUkraine, Belarus and
Kazakhstan. Doanyofthese agreements provide forfreetrade inservices?
Reply
Thetrilateral FreeTrade Agreement between Lithuania, Latvia andEstonia doesnotcover
services. Seetheanswer toQuestion 70fortreatment ofother countries.
Question 70
What isthebasis (currency, reference prices, etc.)forLithuania 'strade withtheCIS
countries? What arethecontents ofthefreetrade agreements signed with anumber ofCIS
countries? Dothese agreements have transition periods? Aretheysymmetrical?
Reply
Trade withCIScountries, aswellaswithallother countries, isconducted among managing
entities,takingintoaccountsignedandvalidintergovernmentalagreementsoncommercialandeconomic
cooperation drawn upreferring totherules ofGATT/WTO.
Payments withCIScountries forappropriately signed interbank agreements areeffected in
afreely convertible currency ornational currency ofacountry through correspondence accounts in
national banks.
Lithuania doesnotapply anyexceptional prices toCIScountries. Inconformity withthe
Government Resolution No.281,signed on28February 1995, reference (threshold) prices forsome
imported goods havebeenintroduced inLithuania anditisplanned toapply reference prices totrade
withallCIScountries aswellaswithother countries.
Lithuania hassigned freetradeagreements (symmetrical inrespect tobothcontracting parties)
with Ukraine (4August 1993) andKazakhstan (5July1993). Theagreements donotprovide forWT/ACC/LTU/2
Page43
transition periods. Neither ofthem, however, hascome intoforce yet.Under Government Resolution
No.1367"OntheEstablishment ofCustoms Tariff Structure "(30December 1994), Lithuania applies
MFN tariffs toimports from Ukraine, Kazakhstan andTajikistan.
TheFreeTrade Agreement withBelarus signed on17March 1993, denounced. Anagreement
hasbeenproviding forMFN treatment intrade andwassigned on13December 1994, andcame into
force on17February 1995.
Under theProtocol between Lithuania andMoldova, signed on27March 1995, MFN treatment
intrade willbeprovided until1January 1996.
PresentlyLithuaniaappliesconventionalcustomstariffstotradewithRussianFederation,Belarus,
Kazakhstan, Moldova, Tajikistan andUkraine (seetheanswer toQuestion 11).
Question 71
Hasatrade agreement beensigned withRussia? What areLithuania 'sintentions asregards
theother CISStates?
Reply
Lithuania plans todraw upagreements based onMFN treatment inbilateral trade withCIS
countries. Presently suchanagreement withGeorgia isinthefinalstage ofpreparation.
Lithuania hassigned MFN trade agreements withtheRussian Federation (theagreement was
signed on18November 1993, andentered intoforceon18January 1995) andBelarus. Suchagreements
alsohavebeensigned withUzbekistan andTajikistan, buthavenotentered intoforce.
Question 72
Does Lithuania have anyother trade oreconomic agreements other thanthose listed in
thissection?
Reply
After theMemorandum wassubmitted therewerecome toforce andnewsigned andenforced
those trade oreconomic agreements (alsothere aresome omitted agreements):
(i) Agreement between theGovernment oftheRepublic ofLithuania andtheGovernment ofSoviet
Socialist Republic ofUkraine onEconomic andCultural Cooperation in1991-1995,
7December 1990;
(ii) Agreement between theRepublic ofLithuania andtheRussian Soviet Federal Socialist Republic
fortheCooperationintheEconomic,SocialandCulturalDevelopmentoftheKaliningradRegion
inR.S.F.S.R., 29July1991 (fortheperiod of5years);
(iii) Agreement between theGovernment oftheRepublic ofLithuania andtheGovernment ofthe
Federal Republic ofCzechia andSlovakia onTrade andEconomic Relations andScientific-
Technical Cooperation, 3August 1991 (isvalid forSlovakia);WT/ACC/LTU/2
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(iv) Agreement between theGovernment oftheRepublic ofLithuania andtheGovernment ofthe
Republic ofHungary onEconomic andTrade Cooperation, 10December 1991 (applying
provisionally bysigning);
(v) Agreement between theGovernment oftheRepublic ofLithuania andtheGovernment ofthe
People 'sRepublic ofChina onTrade andEconomic Cooperation, 30January 1992 (entered
intoforce on29June1994, for5years period);
(vi) Agreement between theGovernment oftheRepublic ofLithuania andtheGovernment of
RomanianonEconomicandTradeRelationsandScientific-TechnicalCooperation,10June1992;
(vii) Agreement onEconomic andCommercial Cooperation between theRepublic ofLithuania and
theRepublic ofTurkey, 27August 1992(entered intoforce on7October 1994, fortheperiod
of5years);
(viii) Agreement between theGovernment oftheRepublic ofLithuania andtheGovernment ofthe
RepublicofIndiaonTradeandEconomicCooperation,7February1993(applyingprovisionally
bysigning);
(ix) Agreement between theGovernment oftheRepublic ofLithuania andtheGovernment ofthe
Russian Federation onTrade andEconomic Relations, 18November 1993(entered intoforce
on18January 1995, fortheperiod of5years);
(x) Agreement between theGovernment oftheRepublic ofLithuania andtheGovernment of
Romanian ontheEstablishment oftheGovernmental Lithuanian-Romanian Committee forthe
Solving Problems ofTrade andEconomic Cooperation, 22April 1994(entered intoforce on
6October 1994, fortheperiod of5years);
(xi) Trade Arrangements forAgricultural Products between theRepublic ofLithuania andtheSwiss
Confederation, 12December 1994 (entered intoforce on1June1995) (annex toFreeTrade
Agreement between theRepublic ofLithuania andtheSwiss Confederation, signed on
24November 1992, andentered intoforce on1March 1994);
(xii) Agreement between theGovernment oftheRepublic ofLithuania andtheCabinet ofMinisters
oftheRepublic ofBelarus onTrade andEconomic Cooperation, 13December 1994(entered
intoforce on23February 1995, fortheperiod of5years);
(xiii) Trade Agreement between theGovernment oftheRepublic ofLithuania andtheGovernment
oftheRepublic ofCyprus, 20February 1995 (entered intoforce on10April 1995, forthe
period of5years);
(xiv) Protocol between theGovernment oftheRepublic ofLithuania andtheGovernment ofthe
Republic ofMoldova onTrade andEconomic Cooperation in1995, 27March 1995 (till
1January 1996);
(xv) Agreement between theGovernment oftheRepublic ofLithuania andtheGovernment ofthe
Kingdom ofSweden ontheEstablishment oftheJoint Swedish-Lithuanian Economic
Commission, 6April 1995;
Forinformation under whatsigned andenforced agreements theMFN isapplied seetheanswer
toQuestion 11.WT/ACC/LTU/2
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Alsosomeagreementsweresignedontradeandeconomiccooperationwhicharenotyetenforced
(with Austria, Greece, Italy, Canada, Poland, Slovenia, Tajikistan andUzbekistan). Agreements with
theUnited States, India andHungary areapplying provisionally bysigning.
On12June1995, theEurope (Association) Agreement between theRepublic ofLithuania and
European Union wassigned which must passtheratification process.
Lithuania intends toconclude freetradeagreements withanumber ofEastEuropean countries.
First onthelistwould beneighbouring Poland. TheGovernment hasalsoprepared documents for
negotiations withHungary, theCzech Republic andSlovenia.
CHAPTER VI. LAWS AND LEGAL ACTS
2. Laws andlegalactsrelating tonon-tariff regulation ofimports, exports andtrade intransit,
rules oforigin; responsible agencies
Question 73
Please provide details onhowthesecurity deposit forgoods intransit iscalculated, as
wellasonwhat constitutes an"adequate guarantee".
Reply
Theamount ofsecurity deposit orguarantee isnotlessthanthesumofimport customs duties
andtaxes applied togoods intransit.
3. Laws andregulations relating toforeign investment; responsible agencies
Question 74
What specific form ofprotection doestheLawonForeign Investment provide withrespect
todiscrimination? National treatment andMost-Favoured Nation treatment?
Reply
Foreign investments areprotected bythelawsoftheRepublic ofLithuania.
Discrimination against foreign investment inanyform isprohibited.
ThenewLawonForeign Capital Investments intheRepublic ofLithuania (13June 1995)
provides thatduring theperiod ofexistence ofaninvestment inLithuania, foreign investors shallenjoy
thesame rights regulating economic-commercial activities andshallbehavethesame obligations as
legalandnatural persons ofLithuania.
Stateinstitutions orofficials shallhavenorighttoprohibit orrestrict theinvestment ofcapital
offoreign origin ifthecapital offoreign origin isinvested incompliance withthelawsofLithuania.
Thetaxation conditions applied toenterprises maynotbelessfavourable thanthose applied
tothelegalandnatural persons ofLithuania.WT/ACC/LTU/2
Page46
Property maybeappropriated onlyifcompensation ispaidandonlyincases prescribed by
thelaws oftheRepublic ofLithuania, inaccordance withtheuniversally recognized norms of
international laws.
Intheeventofdisputes,foreigninvestorsshallhavetherighttoapplydirectlytotheInternational
Centre fortheSettlement ofInvestment Disputes incompliance withthenorms oftheWashington
Convention of18March 1965"OntheSettlement ofInvestment Disputes between States andNationals
ofother States".
Question 75
What exceptions arethere totheprovision thatprohibits discrimination against foreign
investment?
Reply
There arenoexceptions totheprohibition ofdiscrimination against foreign investments.
Question 76
Does the"Law onSpheres ofBusiness Activity wherein Foreign Investment Prohibited
orLimited" stipulate allthesectors inwhich foreign investments areforbidden orrestricted?
What istherationale forforbidding orrestricting foreign investment inthese sectors? Arethere
restricted orforbidden sectors other thandefence andsecurity? What definitions areused for
"defence" and"security" oftheRepublic ofLithuania?
Reply
Please notethatthenewLawonForeign Capital Investments (13June1995) supersedes the
oldLawonSpheres ofBusiness Activity wherein Foreign Investment Prohibited orLimited aswell
astheoldLawonForeign Investment. Seetheanswer toQuestion 52foradescription ofthenew
Lawandother business licensing requirements inLithuania.
Question 77
What aretheprocedures fortheMinistry ofEconomics registration ornotification
requirements forforeign investments inLithuania? Inwhich cases doestheMinistry ofEconomics
retain theright ofapproval? Doforeign investors have toagree tospecific performance
requirements asacondition ofinvesting andcarrying ontheir investments inLithuania? Are
voluntary undertakings afactor inthisregard?
Reply
Fortheregistration offoreign investment inLithuania, theonlyrequirement istosubmit the
establishment documents totheMinistry ofEconomics andtoobtain permission fromlocalauthority
andlocalagency forenvironmental protection.
Stateinstitutions orofficials shallhavenorighttoprohibit orrestrict theinvestment ofcapital
offoreign origin ifthecapital offoreign origin isinvested incompliance withthelawsofLithuania.WT/ACC/LTU/2
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ANNEX IV. GOVERNMENTDECISIONONTHEPROCEDUREOFCOMMODITYEXPORT
AND IMPORT REGULATION INTHE REPUBLIC OFLITHUANIA
Question 78
Although agriculture isonly12percentofGDP, itisahighly protected sector withvery
hightariff levels onmany items andimport quotas onasignificant number ofagricultural goods,
including sugar, livestock andcereals. What plans doestheLithuanian Government havetoreduce
these hightariffs andtoeliminate quotas?
Reply
Actually, agriculture andfoodindustry activity represented 20percentofGDP 1994.
Thequotas mentioned aretariff quotas (seetheanswer toQuestion 14).Concerning the
restrictions onsugar import seetheanswer toQuestion 13.
Lithuaniaiscurrentlypreparingforbilateralmarketaccessnegotiationsrequiredformembership
intheWTO. Lithuania willbeeager toreceive requests fromWTO members tospeed thisprocess.
Question 79
Weunderstand from Annex IVofLithuania 'sMemorandum thatthetariff rateonimports
ofwool iscurrently zero. Does Lithuania have anyintention ofraising import tariffs onwool?
Reply
Lithuania, notpossessing wool fibre, imports allitsrequirements and,therefore, doesnot
currently apply custom duties toimports ofwoolfibre. Lithuania willaddress thelevelofanappropriate
binding forwool fibreinthecontext ofitsbilateral market access negotiations.