Translated by the Ministry of Finance

Consolidated version as of 03 December 2015

Law published in Valstybės Žinios (Official Gazette), 1995, No 26-578, identification code 0951010ISTA000I-796

The new version of the Law as of 01 January 2009:

No X-1615, 17/06/2008, Valstybės Žinios (Official Gazette), 2008, No 76-3003 (05/07/2008)

REPUBLIC OF LITHUANIA

LAW ON CREDIT UNIONS

21 February 1995 – No I-796

Vilnius

CHAPTER ONE

GENERAL PROVISIONS

Article 1. Purpose of the Law

This Law regulates the procedure for establishing, licensing, pursuing the business of, terminating and supervising of credit unions and divisions thereof with a view to ensure the stability, soundness, efficiency and security of the system of credit unions.

Article 2. Main Definitions

1. Payments in proportion to turnover means the payments to members of a credit union made from profit in proportion to turnover of interest of the members of the credit union within the credit union.

2. Central Credit Union - as defined in the Law on the Central Credit Union of the Republic of Lithuania.

3. Customer means a member of a credit union or another person whereto the credit union provides financial services under this Law.

4. Credit union means a credit institution satisfying the economic and social needs of its members and holding a licence to engage and engaged in the receipt of deposits and other repayable funds from the non-professional participants of the market specified by this Law and lending thereof, also authorised to engage in the provision of other financial services stipulated by this Law to the persons specified by this Law and assuming related risks and responsibility.

5. Licence of a credit union (hereinafter - the licence) means an authorisation granted according to the procedure set forth by this Law to engage in the provision of licensed financial services as stipulated by this Law.

6. Turnover of interest of a credit union’s member in the credit union (hereinafter - the turnover) means the aggregate amount of income from the credit union’s interest earned by a member of a credit union and expenses for the interest paid to the credit union.

7. Funds not subject to repayment mean the funds received by a credit union from third parties as a gift, sponsorship or donation, where they are transferred into the ownership of the credit union and are not reflected in liabilities of the credit union.

8. Primary share instrument to a named person (hereinafter - the primary share) means a share instrument to a named person acquired by a member of a credit union granting one vote at the general meeting of the members of the credit union in deciding the matters falling within the competence of this meeting and to receive dividends, as well as other rights established in this Law, with the exception of non-property rights of an associate member restricted under this Law.

9. Share instrument to a named person (hereinafter - a share) means a security attesting to a person’s participation in a credit union’s capital and granting to a member of a credit union the property and non-property rights, with the exception of the non-property rights of an associate member restricted under this Law.

10. Share contribution means an amount of funds paid by a person to a credit union and used to form the share capital of the credit union.

11. Additional share means a share acquired by a member of the credit union with the main share granting the right to receive dividends, as well as other rights established in this Law, with the exception of the right to vote at the general meeting of the members of the credit union.

10. Other concepts used in this Law shall be interpreted as they are defined in the Law on Financial Institutions of the Republic of Lithuania.

Amendments to the Article:

No XI-1568, 30/06/2011, Valstybės Žinios (Official Gazette), 2011, No 86-4179 (13/07/2011)

No XII-1047, 17/07/2014, published in TAR on 04/08/ 2014, identification code 2014-10853

Article 3. Name, Legal Form and Registered Office of a Credit Union, Legal Acts Regulating the Activities of Credit Unions

1. The words ‘credit union’ or other combinations or derivatives thereof may be used in the Republic of Lithuania by the credit unions operating in accordance with this Law in their names, for advertising or other purposes, except where the use of these words is evidently unrelated to the provision of licensed financial services. The name of a credit union shall not be subject to the provision of paragraph 4 of Article 3 of the Law of the Republic of Lithuania on Cooperative Societies (Cooperatives).

2. The legal form taken by a credit union as a legal person may only be a cooperative society.

3. The registered office of a public credit union holding a licence issued according to the procedure set forth by this Law and registered in the Register of Legal Entities of the Republic of Lithuania must be in the Republic of Lithuania.

4. A credit union shall comply in its activities with the Civil Code of the Republic of Lithuania, this Law, other laws, the legal acts adopted by the supervisory authority and its articles of association. Credit unions shall also act in compliance with the Law on Financial Institutions of the Republic of Lithuania, the Law on Cooperative Societies (Cooperatives) of the Republic of Lithuania, unless this Law provides otherwise.

Article 4. Financial Services Provided by a Credit Union and Other Activities

1. A credit union must provide a licensed financial service specified in subparagraph 1 of paragraph 2 of this Article and shall have the right to provide the financial services specified in subparagraphs 2 and 4 of paragraph 2 and paragraph 3 of this Article, including financial services in a foreign currency, provided these rights have not been restricted in accordance with the procedure laid down by this Law or other laws.

2. Licensed financial services shall be:

1) receipt of deposits and other repayable funds from non-professional participants of the market;

2) payment services specified in Article 5 of the Law on Payments of the Republic of Lithuania;

3) repealed on 0 November 2014;

4) issuance of electronic money.

3. Non-licensed financial services shall be:

1) receipt of deposits and other repayable funds;

2) lending (including mortgage loans);

3) administering travellers’ cheques, bankers’ drafts and other means of payment, insofar as this activity is not covered by the payment services indicated in subparagraph 2 of paragraph 2 of this Article;

4) provision of financial assurances and financial guarantees;

5) financial mediation (activities of an agent) as provided for by the Law on Financial Institutions of the Republic of Lithuania;

6) administering of money;

7) provision of information as well as advice on issues of granting and payment of a credit;

8) lease of safes;

9) currency exchange (cash).

4. A credit union shall have the right to provide financial services:

1) to members of the credit union and associate members of the credit union (hereinafter - members);

2) associations of credit unions;

3) credit unions;

4) the Central Credit Union;

5) persons whose requirements and (or) obligations have been passed to the credit union in accordance with Article 651 of this Law or under the reorganization by way of merger, but not longer than until the expiry of the agreements concluded between these persons and another credit union for such requirements and (or) obligations.

5. A credit union shall have the right to provide financial services referred to in subparagraphs 2, 3 of paragraph 2 and subparagraphs 3, 6, 7, and 8 of paragraph 3 of this Article to all persons.

6. In addition to the persons indicated in paragraph 4 of this Article, a credit union shall also have the right to receive deposits and other repayable funds from the budgetary establishments of the Republic of Lithuania, including public establishments whose stakeholders are state or municipal institutions, where this is provided for in the founding documents of credit unions, the associations, religious communities and societies, organisations of trade unions, charity and sponsorship foundations established in the Republic of Lithuania, international or foreign charity and sponsorship foundations, also from minor children (adopted children) or children under guardianship of members of the credit union in accordance with the procedure laid down by the Civil Code of the Republic of Lithuania, provided at least one of the parents or guardians (custodians) is a member of the credit union. A credit union shall also have the right to provide the payment services specified in subparagraph 2 of paragraph 2 of this Article to the persons referred to in this paragraph.

7. Repealed on 05 August 2014.

8. A credit union shall have the right to acquire solely non-equity securities in accordance with the investment rules set out by the supervisory authorities.

9. In addition to the provision of financial services, a credit union may pursue only such other activities as those in the absence of which financial services cannot be provided, which assist in the provision of the financial services or are otherwise directly related to the provision of the financial services.

10. A credit union shall be prohibited from establishing enterprises, also from participating therein, with the exception of participation in the Central Credit Union.

11. A credit union must organise and carry out its activities with a view to ensuring the stability and soundness of its activities.

12. A credit union must organise and carry out its activities with a view to enabling each member of the credit union to make use of the financial services provided by the credit union.

13. Where a credit union itself decides not to carry out a certain activity in the absence of which financial services cannot be provided, which assists in the provision of financial services or is otherwise directly related to the provision of financial services and assists in the conclusion of transactions with other persons on the provision of respective services to the credit unions (hereinafter - the purchase of a credit union’s ancillary services), the credit union must notify thereof the supervisory authority and provide to it the information laid down by legal acts of this institution prior to concluding the said transactions. The legal acts of the supervisory authority may set the requirements for the purchase of the credit union’s ancillary services.

14. Courts of the Republic of Lithuania, other institutions or officers of the Republic of Lithuania must, prior to taking decisions restricting the right of a credit union to provide financial services to non-specific group of customers of the credit union, obtain and the supervisory authority must provide a conclusion on the impact of these decisions on the stability and soundness of the credit union and the entire system of credit unions.

Amendments to the Article:

No XI-555, 10/12/2009, Valstybės Žinios (Official Gazette), 2009, No 153-6893 (28/12/2009)

No XI-1568, 30/06/2011, Valstybės Žinios (Official Gazette), 2011, No 86-4179 (13/07/2011)

No XI-1874, 22/12/2011, Valstybės Žinios (Official Gazette), 2011, No 163-7765 (31/12/2011)

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

No XII-1042, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10857

CHAPTER TWO

ESTABLISHMENT AND LICENSING OF A CREDIT UNION

Article 5. Establishment and Founders of a Credit Union

1. A credit union shall be established according to the procedure set forth by the Civil Code of the Republic of Lithuania, the Law on Financial Institutions of the Republic of Lithuania, this Law and, except where this Law provides otherwise, the Law on Cooperative Societies (Cooperatives) of the Republic of Lithuania.

2. A credit union may be established only for an indefinite period.

3. A credit union may be established only upon obtaining an authorisation of the supervisory authority to establish the credit union.

4. The articles of association of a credit union being established must be submitted to the manager of the Register of Legal Entities within twelve months from signing of the articles of association; in the event of failure to do so within the specified time limit, the articles of association of the credit union shall become invalid and the share contributions and initial membership fees paid earlier shall be reimbursed.

5. A credit union shall be established by accumulating the funds covering the expenses incurred in connection with the establishment thereof from initial membership fees and accumulating the share capital – from share contributions.

6. The founders of a credit union may be solely natural persons. A credit union may be established by not less than five founders.

7. The shares of a credit union being established may be acquired by the founders thereof, also the natural and legal persons entitled to membership of the credit union being established according to Article 13 of this Law and in compliance with the restriction established in paragraph 10 of Article 13 of this Law. Each founder of the credit union must acquire the main shares of the credit union and make a share contribution in accordance with the established procedure.

8. The persons who may not be founders of a financial institution pursuant to the Law on Financial Institutions of the Republic of Lithuania and the natural persons who may not be members of a credit union pursuant to Article 13 of this Law may not be founders of a credit union.

9. Founders shall enter into an agreement on the establishment of a credit union in which the following data shall be indicated:

1) date and venue of conclusion of the agreement on establishment of the credit union;

2) names, surnames, personal numbers and place of residence of the founders;

3) a name and registered office of the credit union;

4) rights and duties of the founders when establishing the credit union and liability for defaulting on the obligations;

5) persons authorised to represent the credit union being established, and their rights and duties;

6) initial membership fee, the procedure for paying and using it;

7) the smallest and largest amounts of a share contribution and the time limits and the procedure for paying these share contributions;

8) the amount of a share contribution paid by each founder;

9) procedure for reimbursing the share contribution made and the initial membership fee paid where the credit union is not established;

10) compensation of the costs of establishment and remuneration for establishment;

11) procedure for settling disputes between the founders.

10. A memorandum of association must be signed by all founders. The authenticity of the signatures of the natural persons who have signed the memorandum of association of a credit union shall not be notarised.

11. A memorandum of association concluded in accordance with the procedure laid down by this Law shall be a public document and shall entitle to open an accumulation account with a bank registered in the Republic of Lithuania or with the Central Credit Union.

12. The founders of a credit union shall draft the articles of association of the credit union and shall submit them for approval to the statutory meeting. The founders must, prior to the statutory meeting, enter the persons who have made share contributions in the register of members.

13. Prior to the statutory meeting, the minimum share capital must be accumulated and the shares of at least 50 persons must be paid up.

14. Prior to the statutory meeting, any of the founders shall have the right to enter into transactions on behalf of and for the benefit of a credit union being established, unless the memorandum of association thereof stipulates otherwise. Where the statutory meeting does not approve these transactions, the obligations based on these transactions shall be jointly and severally guaranteed by the founders who have entered into them.

Amendments to the Article:

No XI-597, 22/12/2009, Valstybės Žinios (Official Gazette), 2010, No 1-8 (05/01/2010)

N XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 6. Statutory Meeting of a Credit Union

1. The founders of a credit union must convene the statutory meeting not later than within 60 days from the signature of an agreement on establishment of a credit union.

2. The statutory meeting shall:

1) consider and approve the articles of association of a credit union;

2) elect members of the supervisory board, board, loan committee of a credit union, members of the controllers’ commission (controller);

3) approve a statutory report;

4) approve the transactions entered into by founders of a credit union;

5) decide other issues falling within the scope of competence of the general meeting of members of a credit union.

3. The statutory meeting must be attended by at least 2/3 of the persons entered in the register of members, apart from associate members.

4. The statutory meeting shall be chaired by the chairman elected by the statutory meeting.

5. The statutory meeting must be minuted. It must indicate: the number of the persons participating in the meeting, all the issues discussed and the decisions adopted. The minutes of the meeting shall be signed by the chairman of the meeting, the secretary and one member authorised by the statutory meeting. A list of all members of a credit union being established must be enclosed with the minutes of the statutory meeting.

6. Where the founders of a credit union fail to convene the statutory meeting of the credit union within the time limit laid down in paragraph 1 of this Article, all the natural and legal persons entered in the register of members, with the exception of the founders, shall be released from obligations to the credit union and shall have the right to claim from the founders reimbursement of share contributions and initial membership fees without any deductions.

Amendments to the Article:

No XI-597, 22/12/2009, Valstybės Žinios (Official Gazette), 2010, No 1-8 (05/01/2010)

Article 7. Statutory Report of a Credit Union

The founders of a credit union must draft a statutory report of the credit union and submit it for approval to the statutory meeting. The report shall indicate:

1) establishment expenditure;

2) the number of issued shares and the amount of funds received in return for them;

3) the amount of share contributions made by each founder;

4) transactions where founders transfer the obligations based on these transactions to a credit union;

5) establishment expenditure subject to reimbursement, consideration for establishment.

Article 8. Article repealed on 05 August 2014.

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 9. Licence

1. Repealed on 01 November 2014.

2. A licence shall be issued for an indefinite period of time.

3. A licence shall be issued to a credit union registered by the supervisory authority in accordance with the procedure set forth by laws and legal acts of the supervisory authority.

4. In order to obtain a licence, a credit union shall submit to the supervisory authority an application and the documents and information specified by legal acts of the supervisory authority, including:

1) the agreement on establishment of a credit union;

2) the articles of association of a credit union;

3) minutes of the statutory meeting;

4) a list of founders of the credit union, documents and data on the identity of the founders of the credit union, the main and additional shares acquired by each of them and the amounts of shares, as well as documents and information evidencing that the funds used for the share contribution are obtained legally;

5) documents evidencing that all share contributions of a credit union are paid;

6) a list of heads of the credit union elected following the statutory meeting whose election is subject to an authorisation of the supervisory authority;

7) documents confirming that the size of the share capital of the credit union does not fall below the minimum size of the capital of a credit union as specified by this Law;

8) the credit union’s three-year framework of activities. The requirements for the framework of activities shall be set by the supervisory authority;

9) a description of the management and organisational structure;

10) a draft of the accounting policy and a detailed description of the accounting organisation;

11) documents and information evidencing that the credit union has a proper internal control system, personnel, technical, information and technological security means, premises and insurance of property.

5. The supervisory authority shall have the right to carry out an on-site inspection of preparedness of a credit union applying for the issuance of a licence to provide financial services.

6. Upon the request of the supervisory authority, state and municipal institutions as well as other persons must forthwith supply to the supervisory authority available information on founders, members and heads of a credit union, their financial situation, activities, discovered infringements of laws and other legal acts, findings of conducted inspections and checks as well as other information required by the supervisory authority for the taking of a decision on the issuance of a licence.

7. The supervisory authority must examine the submitted documents and information and take a decision on the issuance of a licence within three months of the receipt of the application. Where the supervisory authority requests additional documents or information, the decision must be taken within three months of the receipt of the additional documents and information. In any case, a decision on the issuance of a licence must be taken within twelve months of the receipt of the application.

8. Articles of association, an operating plan, management and organisational structure, risk management system, accounting organisation, internal control system, technical, information and technological security means, premises, insurance of property of a credit union applying for a licence must ensure safe and sound activities of the credit union and comply with the relevant legal acts, also the credit union must conform to other requirements set forth by this Law, including the requirements set forth for the minimum capital and registered office of a credit union, members of a credit union, heads of a credit union, and be prepared for a safe and sound provision of financial services.

9. The supervisory authority may refuse to issue a licence where:

1) submitted documents do not meet the requirements set in this Law and legal acts of the supervisory authority, not all information specified by the legal acts or additionally required has been submitted or it is incorrect;

2) a credit union does not meet the requirements set forth in paragraph 8 of this Article.

10. A decision taken on the issuance of a licence shall be notified to the manager of the Register of Legal Entities according to the procedure set forth by the Register of Legal Entities and published on the Internet site of the supervisory authority.

11. A credit union shall have the right to commence the provision of financial services only upon the issuance of a licence registered in the Register of Legal Entities.

12. A credit union holding a licence must at all times conform to the requirements set forth for the granting of an authorisation to establish the credit union and for the issuance of the licence. In the cases and according to the procedure set forth in this Law and legal acts of the supervisory authority, the credit union must notify the supervisory authority of any changes in the information submitted to obtain the licence.

13. A credit union shall be prohibited from transferring the rights granted by a licence or otherwise permit another person to provide licensed financial services not on behalf of the credit union and not for the benefit of the credit union.

Amendments to the Article:

No XI-555, 10/12/2009, Valstybės Žinios (Official Gazette), 2009, No 153-6893 (28/12/2009)

No XI-597, 22/12/2009, Valstybės Žinios (Official Gazette), 2010, No 1-8 (05/01/2010)

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

No XII-1042, 2014-07-17, published in TAR on 04/08/2014, identification code 2014-10857

Article 10. Withdrawal of a Licence or Suspension of Validity Thereof

1. The grounds for the withdrawal of a licence shall be laid down by the Law on Financial Institutions of the Republic of Lithuania. In addition to the grounds laid down in paragraphs 1 and 2 of Article 10 of the Law on Financial Institutions of the Republic of Lithuania, a licence may be withdrawn by a decision of the supervisory authority where:

1) a credit union does not meet the requirements set for the granting of an authorisation;

2) a credit union ceases to exist due to reorganisation or a decision is taken on liquidation thereof;

3) a credit union does not pay in the first (advance) insurance premium in accordance with the Law on Insurance of Deposits and Liabilities to Investors of the Republic of Lithuania where it must pay it or where insurance is terminated.

2. Withdrawal of a licence or suspension of validity thereof shall be notified to a credit union and the manager of the Register of Legal Entities in accordance with the procedure laid down by regulations of the Register of Legal Entities and published on the Internet site of the supervisory authority.

3. Reasons must be given for a decision of the supervisory authority on the withdrawal of a licence.

4. A licence may also be withdrawn or validity thereof suspended on the grounds and according to the procedure set forth in Chapter Eight of this Law.

5. Upon the withdrawal of a licence, a credit union shall not have the right to provide financial services, except to the extent it is necessary to settle with the credit union’s creditors provided the assets, rights, transactions and liabilities of the credit union are transferred according to Article 651 of this Law to the extent necessary to enable the credit institution that has taken over the assets, rights, transactions and liabilities of the credit union, to adequately provide financial services related to the taken over assets, rights, transactions and liabilities, and a decision must be taken on the liquidation of the credit union or initiating of bankruptcy proceedings against it according to the procedure set forth in Chapters Nine and Ten of this Law.

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 11. Repealed on 05 August 2014

Amendments to the Article:

No XI-597, 22/12/2009, Valstybės Žinios (Official Gazette), 2010, No 1-8 (05/01/2010)

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 12. Branches, Representative Offices and Other Structural Divisions of a Credit Union

1. A credit union may establish branches and other structural divisions indicated in the articles of association of the credit union in accordance with the procedure laid down in the articles of association solely within the territory of a municipality of the Republic of Lithuania where the registered office of the credit union is located and within the territory of other municipalities indicated in the articles of association of the credit union and bordering on this municipality.

2. The articles of association of a branch of a credit union, the management and organisational structure, accounting organisation, security means, premises and insurance of property of a branch and other structural divisions of the credit union providing financial services must ensure safe and sound activities thereof and be in compliance with the relevant legal acts.

3. All structural divisions of a credit union providing financial services must be equipped with the communication facilities ensuring transmission of information on the operations carried out to the registered office of the credit union in order to enable the drawing up of a daily balance sheet of the credit union.

4. A representative office of a credit union shall not have the right to provide financial services.

5. Repealed on 05 August 2014.

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

CHAPTER THREE

MEMBERS OF A CREDIT UNION

Article 13. Members of a Credit Union

1. Legally capable natural persons can be the members of the credit union provided they meet one of the following criteria for membership selected by credit unions:

1) reside, are employed or study within the territory of a municipality of the Republic of Lithuania where the registered office of the credit union is located and within the territory of other municipalities indicated in the articles of association of the credit union and bordering on this municipality, or;

2) work in enterprises, undertakings engaged in the same type of economic activities;

3) belong to a trade union or an association of the relevant branch of economic activity.

2. The spouse (cohabitant), children (adopted children) living together and parents (adoptive parents) of a member of a credit union can be the members of the credit union, regardless of the criteria referred to in paragraph 1 of this Article.

3. Specific criteria for membership referred to in paragraph 1 of this Article shall be specified in the articles of association of the credit union. The person meeting the criteria set out in the articles of association of credit unions may become a member of the credit union, except as set forth in paragraph 2 of this Article.

4. The following legal persons registered in the Republic of Lithuania and having their registered office within the territory of a municipality of the Republic of Lithuania where the registered office of a credit union is located within the territory of other municipalities indicated in the articles of association of the credit union and bordering on this municipality may be associate members of the credit union:

1) associations, trade unions, trade union associations, religious communities and societies, professional bodies of lawyers, gardeners’ societies, associations of owners of multi-family apartment houses and other buildings, public establishments wherein no holdings are held by state institutions or municipalities, households, cooperative societies (cooperatives) and agricultural companies;

2) individual enterprises of natural persons who are the members of the credit union, general partnerships, limited partnerships, private limited liability companies, small communities in which a member or members of the credit union hold a proportion of the authorised capital and/or voting rights granting the right to control the activities. The legal persons indicated in this subparagraph may be associate members of the credit union if they conform to the definition of small and micro enterprises provided for in the Law on Small and Medium-Size Business Development of the Republic of Lithuania.

5. The articles of association of a credit union may also specify additional criteria of admission to the credit union of members of the credit union.

6. Where credit unions operating in the territory of one county of the Republic of Lithuania, which meet the criteria for membership provided for in subparagraph 1 of paragraph 1 of this Article, are involved in the reorganization by way of merger, the criteria for membership of the credit union, which continues its activities after the reorganization may include the criteria for membership of one of the reorganized or more credit unions participating in the reorganization. Where credit unions, whose registered offices are in municipalities located in different counties, are involved in the reorganization by way of merger, the members of the credit union, which continues its activities after the reorganization, may be natural persons if they live, work or study in the territory of the municipality within the county of the of the Republic of Lithuania where a credit union, which continues its activities after the reorganization, has its registered office and in the territories of other municipalities bordering with this county specified in the articles of association of the credit unions operating after the reorganization. These provisions shall apply mutatis mutandis to the associate members of the credit union, which continues its activities after the reorganization.

7. An associate member of a credit union must perform all duties of a member of a credit union and may make use of all the services provided by the credit union and exercise the rights of a member, with the exception of the right to vote, be elected to the management and supervisory bodies, commissions, committees and services of the credit union. The articles of association of the credit union may also provide for other restrictions of the rights of an associate member: the largest amount of a deposit which may be accepted from a single associate member, the limited amount of a share contribution and/or loan, the regulated procedure for reimbursing the deposit and/or share contribution for the main and (or) additional shares, etc.

8. The smallest number of members of a credit union, apart from associate members, shall be 50.

9. The number of associate numbers in a credit union may not exceed or be equal to the number of the members meeting the criteria specified in paragraph 1 of this Article.

10. The following persons may not be the members of a credit union:

1) the persons who, in the cases and according to the procedure laid down by legal acts, have failed to submit to the supervisory authority the data on their identity, participants, activities, financial situation, heads of a legal person (members of bodies of the legal person, with the exception of the meeting of participants);

2) the persons who object that the supervisory authority manages, in the cases and according to the procedure set forth by laws and other legal acts, their data required for the issuance of the licences and granting of the authorisations and consents provided for under this Law, including their personal data and information on a person’s previous convictions and health.

8. A credit union must manage the register of members of the credit union indicating members and associate members of the credit union in accordance with the procedure laid down in Article 15 of the Law on Financial Institutions of the Republic of Lithuania.

9. Members of a credit union must exercise the rights and perform the obligations of members in such a way as to ensure the stability and soundness of the credit union’s activities.

10. A person may become a member of a credit union where he meets all the requirements for a member of the credit union set forth by this Law and the articles of association of the credit union.

Amendments to the Article:

No XII-279, 09/05/2013, Valstybės Žinios (Official Gazette), 2013, No 54-2684 (25/05/2013)

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 14. Rights and Obligations of a Member of a Credit Union

1. A member of a credit union shall have the following rights:

1) to participate in the general meetings of members of the credit union and cast a single vote during voting;

2) to elect the management and supervisory bodies of the credit union and be elected thereto;

3) to obtain information on sets of annual and interim financial statements of the credit union, reports of the Board on the activities of the credit union, minutes and decisions of the general meetings of members. It shall be possible to refuse to supply information where it contains secrets of the credit union. A refusal to provide the documents or information requested must be executed in writing at the request of a member of the credit union. Disputes relating to the right of a member of a credit union to information shall be settled in court;

4) to appeal to court against the decisions adopted by the general meeting of members, management and supervisory bodies;

5) to secede from the credit union;

6) to receive a part of the profit allocated to members;

7) to receive a share of the assets of a credit union in liquidation in proportion to the amount of his share contribution;

8) to devise his main and (or) additional shares to one or more persons;

9) subject to consent of the board of the credit union, to transfer his main and (or) additional shares into the ownership of other persons. The board may object to transferring of the share where the person acquiring it may not be a member of the credit union under this Law or does not meet membership criteria;

10) to request the credit union to return his share contribution or a part of the share contribution in the procedure set out in Articles 18 and 481 of this Law.

2. The articles of association of a credit union may also provide for other rights of a member not in contravention of laws of the Republic of Lithuania.

3. A member of a credit union shall not be entitled to vote at the general meeting of members when the general meeting of members is considering the issue of his membership of the credit union, also in other cases provided for in the articles of association of the credit union, where he is directly concerned.

4. A member of a credit union must:

1) hold the main share in the credit union which would be at least of the size specified by this Law and the articles of association;

2) give a timely notice of disappearance of a ground for his membership of the credit union;

3) at the time and in accordance with the procedure laid down by the articles of association, pay the initial membership fee, share contributions and other additional contributions;

4) comply with the articles of association, perform obligations towards the credit union, carry out the resolutions of the management and supervisory bodies thereof, and participate in the activities of the credit union;

5) perform the loan contracts, contracts on holding deposits with the credit union and other contracts concluded therewith in a timely and due manner.

5. A member of a credit union may not simultaneously be a member of another credit union, where this is prohibited by the articles of association of the credit union.

6. A member of a credit union’s management or supervisory bodies who has seceded or has been expelled from the credit union may no longer perform his functions at the mentioned bodies.

Amendments to the Article:

No XI-1342, 21/04/2011, Valstybės Žinios (Official Gazette), 2011, No 52-2517 (03/05/2011)

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 15. Grounds for the Cessation of Membership of a Credit Union

A membership of a credit union shall cease where:

1) the board of the credit union grants a member’s request to secede from the credit union;

2) a member of the credit union is recognised legally incapable in accordance with the procedure laid down by laws of the Republic of Lithuania;

3) a member of the credit union is expelled from the credit union;

4) a member of the credit union who is a natural person dies or an associate member of the credit union which is a legal person is reorganized or liquidated;

5) a member of the credit union becomes a member of another credit union, where the articles of association of the credit union prohibit membership of more than a single credit union;

6) a member of the credit union transfers shares to another person;

7) the credit union is liquidated.

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 16. Secession from a Credit Union

1. Each member of a credit union shall have the right to secede from the credit union on his own initiative upon giving a written notice thereof to the board of the credit union at least three months prior to the intended secession. A decision on secession and settlement with the seceding person shall be taken by the board of the credit union.

2. Repealed on 05 August 2014

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 17. Expulsion from a Credit Union

1. Where a member of a credit union fails to perform his duties, violates this Law and the articles of association of the credit union, he may be expelled from the credit union solely by a decision of the general meeting of members. The board of the credit union may suspend the rights of the member until the general meeting of members, which is to consider the issue of expulsion of the member of credit union. Upon adoption by the board of the credit union of the decision on suspension of the member’s rights, the member shall be deprived of the right to use the services provided by the credit union.

2. A member of a credit union may be expelled where 2/3 of members of the credit union attending the general meeting of members vote for his expulsion.

3. Where a member expelled from a credit union does not agree with the decision of the general meeting of members to expel him, he shall have the right to refer to court for annulment of such a decision within three months from the day on which he learnt or ought to have learnt about adoption of the decision.

Article 18. Settlement with Former Members of a Credit Union

1. Share contributions for the main share shall be returned only at the end of the financial year upon the approval of the set of annual financial statements by the general meeting of the credit union and the adoption of a resolution on the procedure for the distribution of profits and losses. When repaying share contributions to a person whose membership of a credit union has expired, the credit union must reduce them in proportion to the amounts of the credit union’s losses recorded in the approved annual balance sheet of the credit union for the previous year.

2. Share contributions for additional shares shall be returned in accordance with the procedure laid down in the articles of association of the credit union and shall not be reduced in proportion to the amounts of the credit union’s losses recorded in the approved annual balance sheet of the credit union for the previous year.

3. Where prudential standards of the business of the credit union will not be fulfilled after settling with the person, the return of share contributions for the main and additional shares shall be suspended for as long as it will be ensured that prudential standards of the business of the credit union are being fulfilled.

4. A person who has been expelled or has seceded from a credit union shall, as from his expulsion or secession, be deprived of the right to use the services provided by the credit union.

5. The funds payable to a deceased person shall be paid to his heirs in accordance with the same procedure as in the cases of secession or expulsion, unless the heirs of the deceased are members of this credit union and become its members in accordance with the procedure laid down by this Law and the articles of association.

6. The funds payable to a member who has been recognised legal incapable shall be paid through his legal representative after the latter submits the required documents.

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 19. Proxies

A member of a credit union shall have the right to authorise another person to vote on his behalf at the general meeting of members of the credit union or carry out other actions. That person may represent at the general meeting of members of the credit union not more than three members of the credit union or may obtain, under a contract, the voting right from not more than three members of the credit union. A proxy statement by the member must be notarised. Heads of a credit union may not stand proxy for a member of the credit union.

Article 20. Liability of a Member for the Damage Caused to a Credit Union

A member of a credit union shall be held liable for the damage caused to the credit union in accordance with the procedure laid down by the Civil Code of the Republic of Lithuania. Expiry of member of the credit union shall not release the person from liability for the damage caused to the credit union.

CHAPTER FOUR

MANAGEMENT OF A CREDIT UNION

Article 21. Bodies of a Credit Union

1. A credit union must have the following bodies: the general meeting of members, the supervisory board, the board and the head of administration of the credit union.

2. The management bodies of a credit union shall be the board of the credit union and the head of administration of the credit union.

3. A credit union’s articles of association, the Civil Code of the Republic of Lithuania, this Law as well as the Law on Financial Institutions of the Republic of Lithuania and the Law on Cooperative Companies (Cooperatives) of the Republic of Lithuania shall set forth the procedure for the formation and operation of the bodies of a credit union and specify the scope of competence, functions and liability thereof, except where this Law provides otherwise.

Article 22. General Meeting of Members of a Credit Union

1. The general meeting of members of a credit union may not be replaced with the meeting of representatives of members of the credit union.

2. The general meeting of members of a credit union can:

1) amend the articles of association of the credit union;

2) shift the registered office of the credit union;

3) elect members of the supervisory board, the board and the loan committee and members of the auditing commission (auditors) and respectively from among the members – chairpersons of the supervisory board, the board, the loan committee and the auditing commission, an audit firm and remove them from office;

4) adopt a resolution on expulsion of a member from the credit union;

5) determine the amount of remuneration to members of the controllers’ commission (controller) and annual payments (bonuses) to heads of the credit union;

6) set limits for the funds to be allocated to remunerate a financial statement expert or independent auditor or audit company for their work;

7) approve the annual estimate of revenue and expenditure of the credit union;

8) approve a set of annual financial statements; adopt a resolution on the procedure for appropriating profit and compensating for losses;

9) approve signing of the memorandum of association of the Central Credit Union; resolve the issue of the credit union’s joining the Central Credit Union and secession therefore;

10) adopt a resolution on reorganisation or liquidation of the credit union;

11) resolve the issue of the credit union’s joining an association of credit unions and secession therefore;

12) evaluate the reports submitted by the supervisory board, board, loan committee, the controllers’ commission (controller), the internal audit service of the credit union;

13) at the general meeting of members, resolve the issues assigned to the supervisory board or the board, at the request of the supervisory board or the board;

14) resolve other issues falling within the scope of its competence under the laws and the articles of association of the credit union.

Amendments to the Article:

No XI-597, 22/12/2009, Valstybės Žinios (Official Gazette), 2010, No 1-8 (05/01/2010)

No XI-1342, 21/04/2011, Valstybės Žinios (Official Gazette), 2011, No 52-2517 (03/05/2011)

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 23. Grounds for Convening the General Meeting of Members of a Credit Union

1. The general meeting of members of a credit union shall be convened by the board of the credit union, and where the board does not convene the meeting in the specified cases and in accordance with the established procedure – by the supervisory board, the head of administration or at least ¼ of members of the credit union, excluding associate members.

2. The extraordinary general meeting of members of a credit union must be convened where:

1) the sum total of the constituent parts of the equity capital of the credit union as specified in paragraph 1 of Article 38 of this Law falls below the minimum capital of the credit union;

2) the equity capital of the credit union became less than 1/2 of the share capital;

3) the supervisory authority which sets the time limits for the convening of the meeting and agenda thereof so requires;

4) at the request of the board, the supervisory board or at least ¼ of members of the credit union, excluding associate members;

5) in other cases specified by the articles of association of the credit union and laws of the Republic of Lithuania.

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 24. Quorum of the General Meeting of Members of a Credit Union and Adoption of Resolutions

1. The general meeting of members may adopt resolutions where it is attended by more than ½ of all members of a credit union, excluding associate members. In the absence of the quorum, a repeat meeting shall be convened authorised to adopt resolutions on the issues only on the agenda of the meeting that did not took place which shall not be the subject of the quorum requirement.

2. The members of a credit union attending the general meeting of members (proxies thereof) shall be registered against their signature in the list of participants to be signed by the chairperson and secretary of the meeting. The head of administration, who is not a member of the credit union, shall have the right to attend the general meeting of members in an advisory capacity. A member of the credit union not participating in the general meeting of members, who is nevertheless acquainted with the agenda and a draft resolution, may give a written notice to the general meeting of members as to whether he is in favour or against each individual issue. Members who voted in writing in advance shall be deemed to participate in the general meeting of the members and their votes shall be included in the quorum of the meeting and in the voting results. General voting ballots of the meeting which was not held shall be valid at the repeat general meeting. A member shall not be entitled to vote at the general meeting of the members on the resolution on which he had provided an advance written notice.

3. If a member of a credit union cannot vote on certain issues in cases set out in this Law, the voting results of the certain issues shall be determined by the number of votes of the members present at the meeting and entitled to vote on this issue.

4. Voting procedure at the general meeting of members shall be open. Vote in secrecy shall be held at the request of at least 1/4 of members of a credit union participating at the meeting.

5. Resolutions of the general meeting of members shall be adopted by the majority of votes of the members of a credit union registered in the list of participants of the meeting, with the exception of the cases indicated in subparagraphs 1, 4, 5, 10 and 11 of paragraph 2 of Article 22 of this Law. In these cases, decisions shall be adopted by the majority of votes of least 2/3 of members of the credit union registered in the list of participants of the meeting.

5. The minutes of the general meeting of members shall be signed by the chairperson, the secretary of the meeting and one member of a credit union authorised by the meeting. Where all the members (or their proxies) of the credit union participating in the meeting voted in writing, a minutes shall be draw up according to votes received and signed by the head of the administration. The registration list of participants in the meeting, authorisations and other documents confirming the right of persons to vote and general ballots of the members of the credit union who voted in advance in writing must be attached to the minutes.

Amendments to the Article:

No XI-1568, 30/06/2011, Valstybės Žinios (Official Gazette), 2011, No 86-4179 (13/07/2011)

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 25. Time Limits and Procedure for Convening the General Meetings of Members of a Credit Union

1. The annual general meeting of members shall be convened by the board of a credit union on an annual basis, but not later than within three months after the close of the financial year. The board must announce the convening of the annual meeting of members in accordance with the procedure laid down by the articles of association of the credit union not later than twenty days prior to the meeting.

2. The initiators of convening of an extraordinary general meeting of members shall submit an application therefore to the board. The application shall indicate the following: the ground for and purpose of convening the meeting as well as the draft agenda. On receipt of the application, the board must, within ten days from the receipt of the application, take a decision on the convening of the extraordinary general meeting of members. The extraordinary general meeting of members must be held not later than within thirty days from the receipt of the application, but not earlier than after the lapse of twenty days from publication of a notice of convening of the meeting.

3. A repeat general meeting of members of a credit union must be convened not later than within ten days from the meeting not held, and the members of the credit union shall be informed thereof not later than five days before the repeat meeting.

4. A notice of convening of the general meeting of members must indicate:

1) the name and address of the credit union;

2) the date, time and venue of the meeting;

3) the agenda of the meeting.

5. Not later than five days before the meeting, members of a credit union must be given access to the documents relating to the agenda of the meeting.

6. The chairperson of the general meeting of members shall be elected on convening each meeting from among the members of a credit union, and until election thereof the chairperson of the supervisory board shall preside, unless the articles of association of the credit union provide otherwise.

7. The general meeting of members shall not have the right to adopt resolutions on the issues outside the agenda where it is attended by less than 2/3 of members of a credit union, excluding associate members. Only the agenda of the meeting which was not held shall be valid at the repeat meeting.

Article 251. General Voting Ballot

1. The credit union, at the written request of the members of the credit union with the right to vote, and not later than within ten days before the general meeting, shall prepare a general voting ballot and send to the members by registered letter, electronic means of communication or deliver by hand against receipt.

2. The general voting ballot must contain:

1) all draft decisions proposed prior to the date of dispatch of the general voting ballot. They should be formulated so that a member could vote for or against the draft decision;

2) candidates for the members of the bodies of the credit union who are elected at the general meeting, other positions, companies-candidates for election as the audit firm. Candidates must be specified in a manner to enable the member to check for which candidate to vote.

3. The name and date of birth of a member of a credit union must be specified in the filled general voting ballot.

4. A member of a credit union or an authorised person of the member must sign the completed general voting ballot. Where the completed general voting ballot is signed by a person who is not a member, a document confirming the right to vote must be attached to the completed general voting ballot.

5. The general voting ballot shall be considered valid and can not be withdrawn provided that it meets the requirements set out in paragraphs 3 and 4 of this Article and the credit union has received it before the general meeting.

6. Where the general voting ballot does not meet the requirements set out in paragraphs 3 and 4 of this Article, it shall be considered that a member of the credit union has not voted in advance.

7. Where the general voting ballot is written in a way that is not possible to determine the will of the member of the credit union on a separate issue, it shall be deemed that the member has not voted on this issue in advance.

Supplemented by the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 26. Supervisory Board

1. The supervisory board shall be a collegial supervisory body of a credit union. Activities of the supervisory board shall be directed by the chairperson.

2. The number of members of the supervisory board – at least three and not more than nine - shall be determined by the articles of association of the credit union. Only the members of the credit union can be elected as the members of the supervisory board. The supervisory board and chairperson thereof shall be elected by the general meeting of members of the credit union for a term not exceeding four years. The supervisory board shall perform its functions for the time as specified in the articles of association of the credit union or until the newly elected supervisory board shall assume office. The general meeting of members may remove from office the entire supervisory board or its individual members before the expiry of the term of office thereof. The number of the terms of office of a member of the supervisory board shall not be limited. Where individual members of the supervisory board are elected, they shall be elected till the end of the term of office of the current supervisory board.

3. The head of administration of a credit union, a member of the board, a member of the loan committee, and a member of the controllers’ commission (controller), a member of the internal audit service or another employee of the credit union may not be a member of the supervisory board.

4. The supervisory board or its members shall begin performing their operations from the date fixed by the general meeting of members, but not before the supervisory authority has issued a permit to hold office.

5. When the articles of association of the credit union are changed due to the conclusion of the supervisory board or increase of the number of its members, the newly elected members of the supervisory board may begin their operations only from the date of registration of the amended articles of association of the credit union, but not before the supervisory authority has issued a permit to hold office. In this case, the adoption of the decision on the amendment of the articles of association of the credit union and election of the new members of the supervisory board may take place at the same general meeting of the members if this is provided for in the agenda of the meeting.

6. A member of the supervisory board may resign from office before the expiry of his term of office by giving a written notice thereof to the supervisory board at least fourteen calendar days in advance.

7. Where individual members of the supervisory board are elected, they shall be elected only until the expiry of the term of office of the current supervisory board.

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 27. Competence of the Supervisory Board

1. The supervisory board shall:

1) control implementation of resolutions of the general meeting of members by the loan committee, the board and the head of administration;

2) assess the activities of the credit union, the board, loan committee and internal audit service thereof, accumulation and use of financial resources, work remuneration, financial situation;

3) submit to the general meeting of members the reports of the board, the loan committee, the controllers’ commission (controller), the internal audit service together with its conclusions and proposals;

4) warn the board, the loan committee and the head of administration of the credit union to eliminate, without delay, the violations in activities of the credit union or give a notice thereof to the general meeting of members, also may propose to the general meeting of members to remove from office members of the board and the loan committee and to the board – to remove from office the head of administration where they, in the opinion of the supervisory board, have violated this Law, other legal acts, the articles of association of the credit union;

5) ensure that the credit union has an efficient internal control system;

6) assess, on a periodical basis, the reports of the internal audit service of the credit union;

7) submit to the general meeting of members its conclusions and proposals regarding a set of annual financial statements, draft procedure for appropriation of profit and/or compensation of losses and on the report on the activities of the credit union drawn up by the board, also on the violations and other shortcomings detected by the internal audit service and the auditor;

8) determine and approve the conditions of and procedure for lending to heads of the credit union and the persons closely related to the heads of the credit union;

9) represent the credit union at court during hearing of disputes between the credit union and the board, between members of the credit union and the board, between the credit union and the head of administration;

10) propose that the board and the head of administration revoke the unlawful resolutions adopted;

11) assess the credit union’s management of the risks arising in the course of provision of financial services;

12) may transfer the issues falling within its scope of competence for resolution to the general meeting of members;

13) consider or decide on the issues which must be considered or decided on by the credit union’s supervisory board under this Law and other laws or the articles of association of the credit union.

2. Meetings of the supervisory board must be minuted. The minutes of a meeting must:

1) specify the venue and time of the meeting, members of the supervisory board attending the meeting, the chairperson of the meeting, information on whether the meeting has a quorum, the agenda of the meeting;

2) present the substance of every issue considered at the meeting, specify the documents and information on the basis whereof every issue is considered, submit a report on speeches of the persons attending the meeting and on their proposals made on every issue considered at the meeting, a record of the results of voting and decisions taken and attach the individual opinions and protests of the persons attending the meeting.

3. The documents submitted when considering issues on the agenda of a meeting must be attached to the minutes of the meeting.

4. All members of the supervisory board, including those who did not attend a meeting of a credit union’s supervisory board, must be granted access to the minutes of the meeting of the credit union’s supervisory board within five working days or, where it is impossible to grant all members of the supervisory board access to the drawn-up minutes of the meeting of the supervisory board within this time limit, as soon as the circumstances permit. A member of the credit union’s supervisory board must confirm that he has been granted access to the minutes of the meeting of the supervisory board and, where he does not agree with the decisions taken or is of the opinion that they have been executed in an inappropriate manner, forthwith declare his protest in writing to the supervisory board; both documents must be attached to the minutes of the meeting of the supervisory board.

5. Every member of a credit union’s supervisory board must take all possible measures to ensure that the supervisory board decides on the issues within the scope of its competence and that the decisions meet the requirements set in legal acts; also perform the duties stipulated by other laws. A member of the credit union’s supervisory board shall be held liable for nonfeasance or misfeasance of this duty or other duties set forth by legal acts in the same manner as members of the management bodies are held liable under laws, the credit union’s articles of association and agreements concluded with the credit union.

6. A meeting of the supervisory board shall be valid if attended by at least a half of the members thereof. A resolution shall be considered to have been adopted where the number of votes of the members of the supervisory board attending the meeting cast in favour exceeds those cast against. Members of the supervisory board shall have equal rights. During voting, each member shall have one vote. Where a member of the supervisory board is unable to attend a meeting, he may express his will not later than by the opening of the meeting by taking a written vote “for” or “against” the resolution put for vote, provided that he has familiarised himself with the draft resolution.

7. The supervisory board shall have the right to invite an expert or an independent auditor or an audit firm for the purpose of checking and assessing the financial statements and accounting records of a credit union.

8. At the request of the supervisory board, the board and the head of administration of a credit union must furnish the supervisory board with the documents relating to the activities of the credit union; also provide conditions for checking the activities of the credit union.

9. The working procedure of the supervisory board shall be laid down in the rules of procedure of the supervisory board adopted by it.

10. Meetings of the supervisory board must be held at least quarterly. The regular meetings of the supervisory board shall be convened by the chairperson of the supervisory board. The extraordinary meetings of the supervisory board shall be convened at the request of at least 1/3 of members of the supervisory board or on the instruction of the supervisory authority. The procedure for convening meetings shall be established in the rules of procedure of the supervisory board.

11. The supervisory board shall account for its activities to the general meeting of members in accordance with the procedure laid down in the articles of association of a credit union at least once per year.

Amendments to the Article:

No XI-1342, 21/04/2011, Valstybės Žinios (Official Gazette), 2011, No 52-2517 (03/05/2011)

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 28. Board of a Credit Union

1. The board of the credit union is a collegial management body of a credit union. Its chairman shall direct the activities of the Board. The number of the members of the board shall be determined by the articles of association of the credit union; however, the board of the credit union must consist of at least three members. Solely members of a credit union may be elected members of the board of the credit union.

2. The members of the board and chairperson thereof shall be elected by the general meeting of members of a credit union for a term not exceeding four years. The board shall exercise its functions within the term specified in the articles of association of the credit union or until the newly elected board takes up his duties. A member of the board, the chairperson of the board may be removed from office or the entire board may be dissolved by the general meeting of members before expiry of the term of office. The chairperson of the board or a member of the board may resign before expiry of the term of office given a written 14-day notice to the board. The number of terms of office shall not be limited for a member of the board. Where individual members of the board are elected, they will be elected only until the end of the term of office of the present board.

3. The board of a credit union shall:

1) admit new members to the credit union; resolve the issues of expiry of membership of the credit union, with the exception of expulsion of a member;

2) elect and remove from office the head of administration, approve the rules of procedure of administration;

3) organise and convene the general meetings of members of the credit union;

4) draw up and submit to the general meeting of members of the credit union for approval an annual estimate of the credit union’s income and expenditure based on calculations;

5) approve the rules for borrowing, including deposits, and lending funds;

6) adopt decisions on disposal of the assets of the credit union and acquisition of fixed assets, taking and granting of long-term loans, offering of surety or guarantee for the discharge of obligations of third parties where the value of the assets or the amount of transactions does not exceed 1/10 of the equity capital of the credit union. Without a separate decision of the general meeting of members, the board may adopt decisions on disposal of the assets of the credit union and acquisition of fixed assets, taking and granting of long-term loans, offering of surety or guarantee for the discharge of obligations of third parties where the value of the assets or the amount of the transactions exceeds 1/10 of the equity capital of the credit union and where the general meeting of members of the credit union takes a decision by the majority of 2/3 votes to grant to the board such a right and such a right of the board is provided for in the articles of association of the credit union;

7) draft the credit union’s sets of annual financial statements, the procedure for appropriating profit and compensating for losses;

8) approve the rules for investment of assets of the credit union;

9) establish rates for the services provided by the credit union;

10) establish the amount of the initial membership fee;

11) adopt decisions on the establishment of branches, approval or amendment of the regulations thereof, termination of activities thereof, appointment and removal from office of heads thereof, also on the establishment and termination of activities of the structural divisions providing financial services;

12) consider and decide on other issues which must be considered or decided on by the credit union’s board under this Law, other laws or the articles of association of the credit union.

4. Minutes of meetings of the board of a credit union shall be taken and access thereto shall be granted in the manner stipulated in paragraphs 2-4 of Article 27 of this Law.

5. Every member of a credit union’s board must take all possible measures to ensure that the board decides on the issues falling within the scope of its competence and that the decisions meet the requirements set in legal acts; also perform other duties stipulated by laws. A member of the board of a credit union shall be held liable for nonfeasance or misfeasance of this duty or the duties set forth by other legal acts under the laws, the articles of association of the credit union and the agreements concluded with the credit union.

6. A meeting of the board shall be valid if attended by at least a half of the members thereof. A decision shall be considered to have been adopted where the number of votes of the members of the board attending the meeting cast in favour exceeds those cast against. Members of the board shall have equal rights. Each member shall have one vote during voting. Where a member of the board is unable to attend a meeting, he may express his will not later than by the opening of the meeting by taking a written vote “for” or “against” the resolution put for vote, provided that he has familiarised himself with the draft resolution. Members of the board who voted in advance shall be considered as having attended the meeting. A member of the board shall not have the right to vote when the issue related to his activities or his liability is dealt at the meeting of the board or when the member of the board is otherwise interested.

7. The board or its members shall begin their operations from the date of the general meeting of members, but not before the supervisory authority has issued a permit to hold office.

8. When the articles of association of the credit union are changed due to the conclusion of the board or increase of the number of its members, the newly elected members of the board may begin their operations only from the date of registration of the amended articles of association of the credit union, but not before the supervisory authority has issued a permit to hold office. In this case, the adoption of the decision on the amendment of the articles of association of the credit union and election of the new members of the board may take place at the same general meeting of the members if this is provided for in the agenda of the meeting.

9. The working procedure of the board of a credit union shall be laid down in the rules of the procedure of the board adopted by it.

10. In addition to the cases provided for in the rules of the procedure of the board, meetings of the board shall be convened also on the instruction of the supervisory authority.

11. A member of the supervisory board, a member of the loan committee, a member of the controllers’ commission (controller), and a member of the internal audit service of a credit union may not be a member of the board.

12. The board shall account for its activities to the supervisory board and the general meeting of members in accordance with the procedure provided in the articles of association of a credit union at least once per year.

Amendments to the Article:

No XI-1342, 21/04/2011, Valstybės Žinios (Official Gazette), 2011, No 52-2517 (03/05/2011)

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 29. Administration of a Credit Union

1. The administration of a credit union shall consist of the head of administration, the chief accountant (accountant) of the credit union and other employees of the credit union referred to in the documents of the credit union. The administration of the credit union shall implement the resolutions adopted by the general meeting of members, the supervisory board, the board and shall perform other functions specified in laws and the documents of the credit union.

2. The head of administration of a credit union shall be elected and removed from office by a decision of the board. An employment contract with the head of administration shall be concluded by the chairperson of the board, and where the same person is the chairperson of the board and the head of administration, an employment contract with the head of administration shall be signed by another member of the board authorised thereof. The head of administration shall assume office on the day of the conclusion of the employment contract, unless otherwise specified therein, but not before the supervisory authority has issued a permit to hold office of the head of the credit union.

3. The head of administration of a credit union shall be a single-person management body.

4. The head of administration of a credit union shall be held liable for nonfeasance or misfeasance of the duties set forth by legal acts or the articles of association of the credit union under the laws, the articles of association of the credit union and the agreements concluded with the credit union.

5. A member of the supervisory board, a member of the loan committee, a member of the controllers’ commission (controller), a member of the internal audit service, the chief accountant (accountant) of a credit union, the persons who are members of the board or heads of administration of another credit union may not be the head of administration of the credit union. The head of the administration of a credit union may be a member of the board of the Central Credit Union.

6. A member of the supervisory board, a member of the board, a member of the loan committee, a member of the internal audit service, a member of the controllers’ commission (controller), the head of administration of a credit union, the persons who are members of the board or heads of administration of another credit union may not be the chief accountant (accountant) of the credit union.

7. The head of administration shall:

1) organise and carry out the financial activities of a credit union;

2) represent the credit union at court, arbitral institutions and other institutions, except where otherwise provided for by this Law;

3) on behalf of the credit union, conclude transactions with members of the credit union and third parties. The head of administration may conclude the transactions referred to in subparagraph 6 of paragraph 3 of Article 28 of this Law, provided there is a decision of the board of the credit union to enter into these transactions;

4) manage the register of members of the credit union;

5) conclude employment contracts with employees, and in his absence, another person authorised by the board shall sign the employment contracts;

6) be responsible for the drawing up of sets of annual financial statements of the credit union;

7) be responsible for submission of documents and data to the manager of the Register of Legal Entities;

8) consider and decide on other issues of operation and management of the credit union which, under this Law and other laws, are not assigned to the exclusive competence of the board or other bodies of the credit union.

Amendments to the Article:

No XI-1342, 21/04/2011, Valstybės Žinios (Official Gazette), 2011, No 52-2517 (03/05/2011)

No XI-1568, 30/06/2011, Valstybės Žinios (Official Gazette), 2011, No 86-4179 (13/07/2011)

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 30. Heads of a Credit Union and Employees

1. The heads of a credit union shall be:

1) members of the supervisory board;

2) members of the board;

3) the head of administration;

4) the head of the internal audit service;

5) the chairperson of the loan committee;

6) the chairperson of the controllers’ commission (controller).

2. The heads of a credit union must be of good repute and qualifications and experience necessary to properly perform their duties. Requirements for the qualifications and experience of the heads of the credit union shall be set forth by legal acts of the supervisory authority. A person who objects that the supervisory authority manages, in the cases and according to the procedure set forth by laws and other legal acts, his data required for the issuance of the licences and granting of the authorisations and consents provided for under this Law, including his personal data and information on the person’s previous convictions and health, may not be the head of the credit union.

3. A person may not be regarded to be of good repute where he:

1) has been convicted of a serious or grave crime provided for in the Criminal Code of the Republic of Lithuania or of a crime against property, property rights and property interests, economy and business practice, the financial system or of corresponding criminal acts under criminal laws of foreign states, irrespective of whether the conviction has expired;

2) has been imposed administrative, disciplinary penalties or other sanctions provided for in laws where these penalties or sanctions have been imposed for infringement of the provisions of laws or other legal acts regulating the provision of financial services and pursuit of the activities of financial institutions and where he has been penalised more than once per year;

3) abuses psychotropic, narcotic, toxic substances or alcohol.

4. The supervisory authority shall also have the right to recognise that a person is not of good repute by taking into consideration:

1) his conviction of a crime or a criminal offence not referred to in subparagraph 1 of paragraph 3 of this Article or of corresponding criminal acts under laws of foreign states;

2) the imposition of the sanctions provided for by laws on a legal person whose qualifying holding in the authorised capital and/or voting rights he holds or held or whose head he is or was or the winding up of the said legal person by reason of insolvency or by a court’s decision or judgement on the grounds of inappropriate activities or infringements of legal acts;

3) while holding a qualifying holding in a financial institution’s authorised capital and/or voting rights, the suspension of his right to exercise the voting right at the general meeting of the financial institution’s members according to the procedure set forth by laws;

4) the absence of other important reasons for which the person may not be regarded to be of good repute.

5. The heads of a credit union may take office only upon receipt of the authorisation issued by the supervisory authority to take office of the head of a credit union. The prior authorisation of the supervisory authority may not be required in the following cases:

1) a person is re-elected as the head of the credit union to the same position in the same credit union in which he has already authorized, and the circumstances on the good repute, qualification and experience of the person have not changed;

2) a person is elected as the head of the credit union to a new position in the same credit union in which he has already been authorized, and this person at the time of election to the new office meets the qualifications and experience requirements for new duties and circumstances on the good repute remain unchanged;

3) the head of the credit union must be immediately elected to ensure safe and reliable operation of the credit union and as a result the credit union is unable to obtain prior authorization. The person at the time of election to the new position must meet the requirements of good repute, qualification and experience. In this case, the facts and circumstances which posed a threat to the safe and reliable operation of the credit union must be indicated together with the other data and information submitted to the supervisory authority.

6. Where a credit union reasonably considers that a person who does not meet the qualification and experience requirements may be elected or appointed the head of the credit union, it shall provide a reasoned explanation proving that the qualification and experience of the person expected to be elected the head of the credit union suffice for the elected person to properly perform the duties and the reasons justifying the decision to elect this person the head of the credit union in addition to other documents specified by the supervisory authority. The supervisory authority shall issue an authorisation to take office of the credit union only to the person who has passed the exam of qualifications and experience of the head of a credit union. Legal acts of the supervisory authority shall establish a procedure for examining the qualifications and experience of the head. A credit union must, at least thirty days prior to the election or appointment of a person the head of the credit union, notify the supervisory authority thereof and submit the documents and data specified by legal acts of the supervisory authority evidencing that the person meets the requirements set forth by the legal acts.

7. In addition to the case set out in paragraph 6 of this Article, the supervisory authority shall require a person to take the exam of qualifications and experience of the head, or shall take other measures specified by the law if the data available to the supervisory authority raises doubts as to the qualification or experience of the head of a credit union:

1) when more than one sanction was imposed on the credit union during the period of management of the head of the credit union;

2) when the results of the inspection of the credit union indicate that the credit union does not comply with legal requirements during the period of management of the head of the credit union.

8. The credit union shall, upon election of the heads of the credit union, within ten days notify the supervisory authority and submit documents and data set out in the legislation of the supervisory authority certifying that the person meets the requirements set out in the legislation.

9. The supervisory authority shall carry out an assessment and take a decision on the issuance or non-issuance of the authorisation to take office of the head of the credit union within thirty working days of the receipt of all the information needed to take the decision. Where the supervisory authority applies to a credit union or other persons for the submission of additional information, the time limit of thirty working days shall be counted from the date of the receipt of additional information. Where the supervisory authority fails to take a decision within the specified period, it shall be deemed that an authorization to take office of the head of the credit union has been granted. In cases where a person takes an exam of qualifications and experience of the head of a credit union, the time limit of thirty working days shall be counted from the date of taking the exam.

10. The supervisory authority may refuse to grant an authorisation to take office of the head of a credit union where:

1) submitted documents do not meet the requirements set forth by the legal acts of the supervisory authority, not all data specified by the legal acts or additionally required have been submitted or they are incorrect;

2) the heads of the credit union do not meet the requirements set forth in paragraphs 2 of this Article;

3) a person who is subject to an authorisation to take office failed to pass the exam or take the exam of qualifications and experience of the head of a credit union not for the sound reasons where it is required by law to take the exam.

11. The supervisory authority shall withdraw an authorisation to hold office of the head of a credit union where:

1) the authorisation has been obtained by fraud or otherwise violating laws;

2) the authorisation to hold office has been granted to a person who no longer meets the requirements set forth by this Law or other laws for the granting of an authorisation.

3) the person obliged by the supervisory authority to take an exam of qualifications and experience of the head of a credit union in cases specified in paragraph 7 of this Article failed to pass or take the exam not for the sound reasons.

12. A credit union shall be notified of a decision taken on the withdrawal of an authorisation. Where the supervisory authority takes a decision on the withdrawal of the authorisation, the credit union at the request of the supervisory authority and in accordance with the procedure set forth by laws must forthwith remove the head from office and terminate the employment contract concluded therewith.

13. Requirements for the qualifications, experience and repute of employees of a credit union may be set forth by legal acts of the supervisory authority.

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 31. Internal Control of the Activities of a Credit Union

Requirements for the internal control of a credit union shall be set forth by the Law on Financial Institutions of the Republic of Lithuania, this Law and legal acts of the supervisory authority.

Article 32. Services, Commissions and Committees of a Credit Union

1. Where the assets of a credit union fall below EUR 3 million, a controllers’ commission (controller) must be elected within the credit union. Where the assets of a credit union amount to or exceed EUR 3 million, independent audit must be carried out in the credit union in accordance with the procedure laid down by Article 53 of this Law. The controllers’ commission (controller) shall be elected by the general meeting of members for a period stipulated by the articles of association of the credit union, which shall not exceed four years. It shall be permitted not to elect the controllers’ commission (controller) in a credit union where the general meeting of members of the credit union adopts a decision on the carrying out of audit of the credit union by an audit firm or where the audit of the credit union is compulsory under this Law.

Amendments to the Article:

No XII-1104, 23/09/2014, published in TAR on 02/10/2014, identification code 2014-13434

2. Where the assets of a credit union amount to or exceed EUR 3 million, the credit union must have in place a standing internal audit service. The internal audit service shall be elected and dissolved by the supervisory board. The internal audit service shall account for its activities to the general meeting of members and the supervisory board in accordance with the procedure laid down in the articles of association of a credit union at least once per year.

Amendments to the Article:

No XII-1104, 23/09/2014, published in TAR on 02/10/2014, identification code 2014-13434

3. A credit union must have a loan committee.

4. Where the assets of a credit union amount to or exceed EUR 15 million, the credit union must have at least one risk assessment specialist whose powers and functions shall be laid down in the articles of association of the credit union and (or) any other documents approved by the general meeting of members of the credit union.

Amendments to the Article:

No XII-1104, 23/09/2014, published in TAR on 02/10/2014, identification code 2014-13434

5. A credit union shall have the right to have also other committees, services and commissions specified in the articles of association of the credit union

6. The procedure for the formation and operation of the services, commissions and committees of a credit union and scope of competence thereof shall be specified by the credit union’s articles of association and other documents adopted by the bodies of the credit union. Requirements for the procedure on the formation and operation of the services, commissions and committees of the credit union and scope of competence thereof may also be set by legal acts of the supervisory authority.

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 33. Loan Committee

1. The number of members of the loan committee may be not less than three members. The members of the loan committee and chairperson thereof shall be elected by the general meeting of members of a credit union from among at least three members of the credit union for a term of office not exceeding four years. The loan committee shall perform its functions for the period prescribed in the articles of association of the credit union or until the newly elected loan committee takes up his duties. The general meeting of members may recall the entire loan committee or its individual members before the end of the period. The chairperson or member of the loan committee may resign from office before the expiry of a term by given at least a 14-day written notice to the loan committee. Where individual members of the loan committee are elected, they shall be elected only until the end of the term of the operating loan committee. A member of the supervisory board, a member of the board, the head of administration, a member of the internal audit service, a member of the controllers’ commission (controller) of a credit union may not be a member of the loan committee.

2. The loan committee shall consider applications for loans of members of a credit union. It shall provide for the terms and conditions of and the procedure for paying and repaying a loan and submit proposals on these issues to the board of the credit union or the head of administration thereof. The loan committee shall also consider the loans not repaid on time and submit proposals to the board and/or the head of administration. A loan contract may not be concluded with a member of the credit union or amended where the consent of the loan committee is required according to the procedures laid down by the credit union and the loan committee does not approve of the granting of the loan or amendment of the loan contract.

3. The articles of association of a credit union must indicate the cases when borrowing is possible by a decision of the head of administration, by an independent decision of the board of the credit union without the approval of the loan committee, and when such borrowing is not possible without the approval of the loan committee. In respect of consideration of applications of members for loans, the approval of the loan committee shall not be required where the loan granted by the credit union and interest do not exceed the amount of a share contribution held by a member in the credit union or where repayment of the loan is secured by the pledge of a fixed-term deposit held with this credit union or in other cases provided for in the articles of association of the credit union.

4. The loan committee shall account for its activities to the general meeting of members and the supervisory board in accordance with the procedure laid down in the articles of association of a credit union at least once per year.

5. The working procedure of the loan committee shall be laid down in the rules of the procedure of the loan committee adopted by it.

6. The loan committee and its members shall start their activities on the date set by the general meeting of members, but not prior to the issuance of the authorisation to hold office by the supervisory authority.

7. When the articles of association of the credit union are changed due to the formation of the loan committee or increase of the number of its members, the newly elected members of the loan committee may begin their operations only from the date of registration of the amended articles of association of the credit union, but not before the supervisory authority has issued a permit to hold office. In this case, the adoption of the decision on the amendment of the articles of association of the credit union and election of the new members of the loan committee may take place at the same general meeting of the members if this is provided for in the agenda of the meeting.

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 34. Controllers’ Commission (Controller) of a Credit Union

1. The scope of competence and functions of the controllers’ commission (controller) shall be specified by the articles of association of a credit union and other documents approved by the general meeting of members of the credit union.

2. A member of the supervisory board, a member of the board, the head of administration, a member of the loan committee, a member of the internal audit service of a credit union or another employee of that credit union, also a person related by blood and marriage to the persons indicated in this paragraph may not be a member of the controllers’ commission (controller).

3. The controllers’ commission (controller) must check the set of annual financial statements of a credit union and submit, on the basis thereof, a conclusion of the auditing commission (auditor) on this set of statements. The controllers’ commission (controller) must check the set of annual financial statements of a credit union and submit its opinion thereon solely where the audit of the credit union is not carried out by an audit firm.

4. A conclusion of the controllers’ commission (controller) on the set of annual financial statements of a credit union shall be submitted on the same issues as the issues whereon the auditor’s report must be submitted under this Law.

5. Members of the controllers’ commission (controller) may be remunerated for their work.

6. Members of the controllers’ commission (controller) shall be held liable, in accordance with the procedure laid down by laws of the Republic of Lithuania, for unsatisfactory control of activities of a credit union and for concealing activity shortcomings.

Amendments to the Article:

No XI-1342, 21/-4/2011, Valstybės Žinios (Official Gazette), 2011, No 52-2517 (03/05/2011)

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

CHAPTER FIVE

CAPITAL OF A CREDIT UNION AND APPROPRIATION OF PROFIT

Article 35. Capital of a Credit Union

The capital of a credit union shall consist of the equity and loan capital. Legislation adopted by the supervisory authority may establish requirements for the formation of the capital of credit unions.

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 36. Equity Capital

1. The equity capital of a credit union shall consist of:

1) the share capital;

2) the reserve funds;

3) retained earnings (loss) of the previous year;

4) mandatory reserve or reserve capital;

5) tangible fixed assets revaluation reserve;

6) retained earnings (loss) of the current year;

7) other reserves.

2. Where the equity of the credit union became less than 1/2 of the share capital, the head of the administration of the credit union shall immediately inform the board and the board no later than within three months after the date on which he became aware or should have become aware of the situation, must convene a general meeting of members of the credit union, which has to discuss issues concerning the adoption of the decision referred to in subparagraph 2 of paragraph 7 of Article 42 of this Law. Such situation of the credit union must be corrected no later than within six months from the date on which the board became aware of, or should have become aware of such situation.

3. The articles of association of a credit union must indicate the capitals and reserves formed in the credit union.

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 37. Loan Capital

1. The loan capital of a credit union shall be made up of the funds, which the credit union has acquired by the right of ownership through borrowing relationships by issuing long-term debt securities (bonds) or concluding loan agreements. The initial maturity date of the debt securities and the term of validity of a loan agreement shall be at least five years.

2. The loan capital of a credit union must conform to all characteristics of a subordinated loan.

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 38. Minimum Capital of a Credit Union

1. The sum total of the constituent part of a credit union’s equity capital specified in subparagraphs 1, 2, 3 and 4 of paragraph 1 of Article 36 of this Law must be not less than:

1) EUR 145 000, where the credit union does not intend to provide the licensed financial service indicated in subparagraph 4 of paragraph 2 of Article 4 of this Law;

2) EUR 350 000, where the credit union intends to provide the licensed financial service

indicated in subparagraph 4 of paragraph 2 of Article 4 of this Law.

Amendments to the Article:

No XII-1104, 23/09/2014, published in TAR on 02/10/2014, identification code 2014-13434

2. Where the board of a credit union transpires that the sum total of the constituent parts of a

credit union’s equity capital as specified in paragraph 1 of this Article has fallen below the minimum capital of the credit union, it must forthwith notify thereof the supervisory authority and immediately convene an extraordinary general meeting of members. The general meeting of the credit union’s members must take decisions, which would allow restoring the credit union’s capital to the minimum amount of a credit union’s capital as quickly as possible. The board of the credit union shall notify the supervisory authority of the decisions taken at the general meeting of the credit union’s members on the restoration of the capital not later than within three working days.

Amendments to the Article:

No XI-1874, 22/12/2011, Valstybės Žinios (Official Gazette), 2011, No 163-7765 (31/12/2011)

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 39. Share Capital and Shares of a Credit Union

1. The share capital of a credit union shall consist of the value of all share contributions of the credit union received for the main and additional shares. Share contributions shall be made solely in money’s worth.

2. The smallest amount of a share contribution may not be less than EUR 28.96. A member may have only one main share.

Amendments to the Article:

No XII-1104, 23/09/2014, published in TAR on 02/10/2014, identification code 2014-13434

3. It shall be prohibited to recover from a member of a credit union the share contributions which are the property of the credit union, with the exception of the cases when the debtor succeeds from the credit union.

4. Shares of a credit union shall not be subject to the Law on Securities of the Republic of Lithuania. Shares of a credit union shall be uncertificated.

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 391. Common and Preferred Shares

1. Additional shares may be common or preferred. Privileged shares may comprise no more than 1/3 of the share capital.

2. The rights of holders of ordinary shares to a dividend shall be implemented only when respective property rights of holders of preferred shares are implemented.

3. Common shares of the credit union cannot be converted into preferred shares. The credit union shall not be allowed to set in the articles of association of the credit union or shares subscription agreement the amount of the dividend for the holders of ordinary shares.

4. Preferred shares of the credit union cannot be converted into common shares.

5. The articles of association of credit unions that issue privileged shares shall set out a specific (fixed) amount of the dividend of preferred shares expressed as a percentage based on the nominal value of additional shares.

6. Preferred shares may be cumulative or non-cumulative. This shall be laid down in the articles of association of credit unions by specifying the classes of shares.

7. If a portion of the distributable profits for dividends is not enough to pay a total fixed dividend to the owners of preferred shares, they shall be paid the amount reduced proportionally. The amount not paid to the owners of cumulative preferred shares not exceeding the total fixed dividend over three consecutive financial years, shall be transferred to the next financial year. The amount not paid to the owners of cumulative preferred shares exceeding the total fixed dividend over three consecutive financial years, as well as the amount not paid to the owners of non-cumulative preferred shares shall not be transferred to the next financial year.

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 40. Adjusted Capital

The adjusted capital of a credit union shall be the sum total of the credit union’s capital reduced by the amount and according to the procedure set forth by legal acts of the supervisory authority.

Article 41. Capitals and Reserves

1. The reserve capital of a credit union shall comprise additional contributions of members of the credit union, deductions from the profit of the credit union and/or other funds not subject to repayment. The purpose of the credit union’s reserve capital shall be to guarantee the financial stability of the credit union. By a decision of the annual general meeting of the credit union’s members, the reserve capital of the credit union may be used solely to cover the operating losses of the credit union.

2. The mandatory reserve or reserve capital shall be formed from a credit union’s net profit deductions. Allocations to the mandatory reserve or reserve capital shall be compulsory and may not be less than 20 per cent of the credit union’s net profit, until the mandatory reserve or reserve capital reaches 1/5 of the credit union’s equity capital. By a decision of the annual or extraordinary general meeting of the credit union’s members, the mandatory reserve or the reserve capital may be used solely to cover operating losses of the credit union. Using a portion of the mandatory reserve or reserve capital to cover the credit union’s operating losses, deductions from the net profit to the mandatory reserve or reserve capital shall be repeated until it reaches the specified amount.

3. The net financial result (profit or loss) of annual activities for the financial year must be appropriated not later than within three months of the close of the financial year when the annual general meeting of members of the credit union approves the set of annual financial statements.

4. Other reserves of a credit union shall be the reserves whose formation and use has been provided for in the articles of association of the credit union.

Amendments to the Article:

No XI-1342, 21/04/2011, Valstybės Žinios (Official Gazette), 2011, No 52-2517 (03/05/2011)

Article 42. Appropriation of Profit

1. The profit or loss of a credit union shall be the financial result of the credit union’s annual activities calculated by deducting the credit union’s expenses of the financial year from the credit union’s earnings of the year.

2. The net profit or loss shall be the financial result of a credit union’s annual activities calculated by deducting the tax amounts for the reporting period from the financial result of the credit union’s annual activities.

3. The net financial result (profit or loss) of annual activities for the financial year must be appropriated not later than within three months of the close of the financial year when the annual general meeting of members of the credit union approves annual financial statements.

4. Where after the close of the financial year the sum total of a credit union’s unappropriated result and net result of annual activities at the beginning of the next financial years is positive (profit), the general meeting of the credit union’s members shall adopt a decision on appropriation of profit. The decision must indicate:

1) retained earnings (loss) at the beginning of the financial year;

2) net financial result of annual activities;

3) deductions to the mandatory reserve or reserve capital;

4) deductions to other capitals and reserves formed in the credit union;

5) the share of profit allocated for the payment of bonuses in proportion to turnover and/or dividends;

6) the use of profit for other purposes indicated in the articles of association of the credit union;

7) retained earnings.

5. Profit may be allocated for the payments referred to in subparagraphs 5 and 6 of paragraph 4 of this Article solely upon effecting the deductions compulsory for a credit union to the capitals and reserves formed in the credit union and covering the credit union’s losses.

6. Where after the close of the financial year the sum total of a credit union’s unappropriated result and net result of annual activities at the beginning of the next financial years is negative (loss), the credit union’s members shall adopt a decision on the covering of this loss. The loss shall be covered:

1) by transfers from the mandatory reserve or from the reserve capital;

2) by transfers from the reserve capital.

7. Where the amounts transferred from reserves are insufficient for the covering of a loss:

1) the remaining retained loss may be covered by the additional share contributions of members of a credit union or brought forward to the beginning of the next financial year, where the credit union’s equity capital is not less than 1/2 of the credit union's share capital as a result of the occurred loss;

2) the remaining retained loss must be covered by the additional share contributions of members of a credit union when the credit union’s equity capital is less than 1/2 of the credit union's share capital as a result of the occurred loss.

8. Repealed on 05 August 2014.

Amendments to the Article:

No XI-1342, 21/04/2011, Valstybės Žinios (Official Gazette), 2011, No 52-2517 (03/05/2011)

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

CHAPTER SIX

A CREDIT UNION’S OPERATIONAL RISK AND PRUDENTIAL TREATMENT THEREOF, PROTECTION OF THE INTERESTS OF THE CREDIT UNION’S CLIENTS

Article 43. Taking of Operational Risk and Prudential Treatment Thereof

1. Requirements for taking of a credit union’s operational risk and prudential treatment thereof shall be set by the Law on Financial Institutions of the Republic of Lithuania.

2. A credit union must make provisions to reduce its operational risk on the basis of legal acts of the supervisory authority and taking account of the risk of every transaction it concludes on the provision of financial services, the financial and economic condition of a client, the performance of the obligations related to the transactions on the provision of financial services, the available means of ensuring the performance of these obligations, as well as other circumstances influencing the value of the credit union’s assets.

Article 44. Prudential Requirements for a Credit Union’s Activities

1. The following prudential requirements shall be set for credit unions:

1) capital adequacy;

2) liquidity;

3) maximum open position in foreign currency;

4) maximum exposure to a single borrower;

5) other requirements set by legal acts of the supervisory authority.

2. The specific ratios and methodology for calculation thereof shall be laid down by legal acts of the supervisory authority. The supervisory authority shall also have the right to set individual ratios for a credit union.

3. The requirement referred to in subparagraph 4 of paragraph 1 of this Article shall not apply to a credit union whose adjusted capital does not exceed LTL 2 million.

Note. Paragraph 3 of Article 44 shall remain in force until 1 January 2013.

4. In respect of the requirement of maximum exposure to a single borrower, the borrowers of a credit union shall be subject to the interlinking criteria established by the supervisory authority.

Article 45. Limits on Investment in Immovable Property

1. A credit union may invest in immovable property where it is necessary to ensure direct activities of the credit union (buildings wherein the registered office of the credit union is located or wherein financial services are provided, etc.). This investment may not exceed 70 per cent of the adjusted capital of the credit union.

2. Paragraph 1 of this Article shall not apply where a credit union has acquired immovable property by the right of ownership to cut the losses incurred by a financial service provided to a client and where it holds such a property by the right of ownership for a time period not exceeding three years from the day of its acquisition.

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 46. Lending

According to Articles 47 and 48 of this Law, lending shall be considered to be the conclusion of transactions wherefrom a monetary claim of a credit union or irrevocable monetary commitment of the credit union arises.

Article 47. Limits on Lending

1. A credit union may lend funds to a member thereof for a period not exceeding one year without requiring to secure their repayment by the means of securing obligations provided for in the Civil Code of the Republic of Lithuania, where the amount of funds requested by the member and interest thereon do not exceed the amount of his share contribution for the main share to the credit union.

2. The conditions of and procedure for lending to the head of a credit union and the persons closely related to the head of the credit union must be approved by the supervisory board of the credit union. The sum total of such a lending per one head of the credit union and the persons closely related thereto may not exceed ten per cent of the adjusted capital of the credit union. In this Article, the persons closely related to the head of a credit union shall be the spouse (cohabitee), children (adopted children), parents (adoptive parents) of the head of the credit union and legal persons, where the head of the credit union holds a qualified holding in the authorised capital and/or voting rights thereof. Decisions on such a lending must be taken by the board of the credit union, and a person related to such a lending can not participate in the taking of a decision. The terms of lending set for the persons referred to in this paragraph may not be more favourable than the terms of lending set for other clients of the credit union.

3. A credit union may lend funds solely where lending is secured by at least one of the means of securing obligations as provided for by the Civil Code of the Republic of Lithuania, with the exception of the case referred to in paragraph 1 of this Article.

4. Where the period of lending exceeds five years, such a lending shall be secured by one of the following securing obligations:

1) mortgage;

2) pledge of central banks and government securities in the procedure established by the supervisory authority;

3) pledge of deposits held in the credit union where the amount of funds requested to lend and the interest thereon does not exceed the amount of the deposit together with interest;

4) guarantee by the guarantee institution guaranteed by the State as defined by the Law on State Debt of the Republic of Lithuania.

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 48. Limits on Lending for Making Share Contributions to a Credit Union

A credit union shall not have the right to lend its share being acquired for making of a share contribution or for granting of a subordinated loan thereto, also for acquisition of the credit union’s debt securities.

Article 481. Limits to Dispose of Credit Union‘s Share Contributions

The right to dispose of the share contribution or part thereof which does not exceed the amount of lending together with interest paid, can be restricted to a member of a credit union in the procedure laid down in the articles of association of the credit union, as long as the amount lent will be repaid with interest.

Supplemented by the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Amendments to the Article:

No XII-1728, 19/05/2015, published in TAR on 28/05/2015, identification code 2015-08226

Article 49. Secret of a Credit Union

Article 55 of the Law on Banks of the Republic of Lithuania shall apply mutatis mutandis to the protection of the secret of a credit union.

Amendments to the Article:

No XII-1901, 25/06/2015, published in TAR on 03/07/2015, identification code 2015-10788

Article 50. Provision of Information on Financial Services

1. At the places where a credit union provides financial services to clients, the credit union’s name and the financial services, which the credit union shall have the right to provide, must be indicated in an easily accessible place to every prospective client. Conditions for public access to the information referred to in paragraph 2 of this Article shall also be provided.

2. Prior to entering into a contract on the provision of financial services, a credit union must provide a client with detailed information on the terms and conditions of the provision of the financial services, price of the services, duration of the provision of the services, possible consequences thereof and other information, which may influence the client’s decision to enter into the contract.

CHAPTER SEVEN

ACCOUNTING, SETS OF FINANCIAL STATEMENTS AND AUDIT OF A CREDIT UNION

The title of the Section was amended:

No XI-1342, 21/04/2011, Valstybės Žinios (Official Gazette), 2011, No 52-2517 (03/05/2011)

Article 51. Accounting

1. A credit union must keep accounts in compliance with laws and other legal acts of the Republic of Lithuania, and the accounting policy selected by the credit union.

2. Accounting policy must cover general accounting principles, accounting methods and regulations designed to keep the accounts of a credit union and to draw up and submit sets of financial statements.

3. The accounting organisation of a credit union must ensure that:

1) the sets of financial statements must reflect the actual financial position and results of operations of the credit union;

2) conditions for the heads of the credit union to safely and soundly use and manage the credit union’s assets and to dispose thereof are provided;

3) it provides conditions for members of the credit union and the institutions authorised by law to carry out verifications and to control the activities of the credit union, the heads and other employees thereof having the right to take decisions which give rise to the credit union’s obligations to other persons and the financial situation of the credit union.

4. A credit union’s board shall be responsible for the organisation of accounting and the preservation of accounting documents in accordance with the requirements set by this Law and other legal acts of the Republic of Lithuania.

Amendments to the Article:

No XI-1342, 2011-04-21, Valstybės Žinios (Official Gazette), 2011, No 52-2517 (03/052011)

Article 52. Sets of Financial Statements

1. Credit unions shall draw up sets of interim financial statements and sets of annual financial statements.

2. Sets of interim financial statements shall be financial statements drawn up after summarising the data of a time shorter than the financial year. The composition and periodicity of submitting of a set of interim financial statements to the supervisory authority shall be established by legal acts of the supervisory authority.

3. A set of annual financial statements shall consist of:

1) the balance sheet;

2) profit (loss) statement;

3) explanatory note.

4. At the close of the financial year, a credit union must:

1) within three months of the close of the financial year, but not later than ten days prior to the annual general meeting of members of the credit union, provide access for the members of the credit union to the set of annual financial statements checked by the controllers’ commission (controller), a certified auditor or an audit firm, a draft decision on the appropriation of profit and a conclusion of the controllers’ commission (controller) or the auditor’s report;

2) within three months of the close of the financial year approve a set of annual financial statements by a decision of the general meeting of the credit union’s members and take a decision on the appropriation of profit;

3) within five working days of the taking of a decision by the general meeting of the credit union’s members on the approval of a set of annual financial statements, submit to the supervisory authority a set of annual financial statements checked by the controllers’ commission (controller) or a certified auditor, or an audit firm and approved by the meeting and a decision on the appropriation of profit;

4) within four months of the close of the financial year, in the procedure laid down by the supervisory authority, to publish the set of annual financial statements, the conclusion of the controllers’ commission (controller) or an auditor, and other information specified by the supervisory authority.

5. The general meeting of a credit union’s members may not take a decision on the appropriation of profit where the controllers’ commission (controller) or an auditor has not checked a set of annual financial statements.

6. The head of administration of a credit union shall be held liable for the accuracy of the information provided in a set of annual financial statements according to the procedure set forth by laws of the Republic of Lithuania.

7. Premiums and other benefits specified in the articles of association of a credit union shall be paid to the heads of the credit union after the close of the year where such a decision is adopted by the general meeting of members of the credit union upon approval of the set of annual financial statements.

Amendments to the Article:

No XI-1342, 21/04/2011, Valstybės Žinios (Official Gazette), 2011, Nr. 52-2517 (03/05/2011)

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 53. Audit

1. A certified auditor or an audit firm shall audit sets of annual financial statements of a credit union and based on the audit provide an auditor’s opinion on these sets and an auditor’s report. The auditor must present in the auditor’s report information as to whether a credit union:

1) has accurately and in a qualified manner valued the assets in compliance with the legal acts currently in force in the Republic of Lithuania;

2) has made mandatory adjustments of the value of the assets and performed write-offs;

3) has formed mandatory and required capitals, reserves and provisions to reduce the operational risk;

4) complies with capital requirements set by legal acts of the Republic of Lithuania;

5) meets the requirements set by legal acts of the Republic of Lithuania for the efficient and sound management of assets and for safe and sound activities;

6) has in place adequate internal control and information systems.

2. The general meeting of a credit union’s members shall select a certified audit or an audit firm to perform audit of sets of annual financial statements of the current year and not more than two subsequent financial years.

3. A credit union must conclude an agreement with the certified auditor or the audit firm selected at the general meeting of the credit union’s members on carrying out of the audit of sets of annual financial statements until the end of the first half of the current financial year

Amendments to the Article:

No XI-1342, 21/04/2011, Valstybės Žinios (Official Gazette), 2011, Nr. 52-2517 (03/05/2011)

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 54. Requirements for an Auditor and an Audit Firm, Duties and Liability Thereof

The requirements set for an auditor and an audit firm, duties and liability thereof shall be set by the Law on Financial Institutions of the Republic of Lithuania.

CHAPTER EIGHT

SUPERVISION OF CREDIT UNIONS

Article 55. Supervisory Authority of Credit Unions

1. The Bank of Lithuania shall be the supervisory authority of credit unions.

2. The supervisory authority shall carry out the supervision of the credit unions holding a licence issued in accordance with the procedure laid down by this Law.

3. Supervision shall be carried out in compliance with this Law, the Law on Financial Institutions of the Republic of Lithuania, the Law on the Bank of Lithuania of the Republic of Lithuania and legal acts adopted by the supervisory authority.

Article 56. Protection of the Information Obtained for Supervision Purposes

Protection of the information obtained for supervision purposes shall be subject mutatis mutandis to provisions of Article 65 of the Law on Banks of the Republic of Lithuania.

Amendments to the Article:

No XI-1669, 17/11/2011, Valstybės Žinios (Official Gazette), 2011, No 145-6815 (01/12/2011)

Article 57. Consideration of Applications for the Issuance of a Licence, Granting of an Authorisation or Consent or for Carrying out of Other Actions and Decisions of the Supervisory Authority

1. Detailed terms and conditions of and the procedure for submitting and examining applications for the issuance of the licences, granting of the authorisations, consents provided for under this Law or for carrying out of other actions (hereinafter referred to is this Article as the “granting of authorisations”) and issuing them, as well as detailed requirements for the submitted documents shall be set forth by legal acts of the supervisory authority.

2. An application for the granting of an authorisation shall be examined and a decision thereon shall be taken within the time limits laid down in this Law or, where the time limits have not been laid down in this Law, within the time limits laid down by legal acts of the supervisory authority. The supervisory authority shall have the right to request additional documents and information required to take the decisions. Where the supervisory authority requests additional documents and information or the applicant submits additional documents or information at his own initiative, the time limit of consideration of the application and taking of the decision shall be calculated from the date of receipt of the additionally requested documents and information or the documents and information additionally submitted by the applicant.

3. The supervisory authority shall notify applicants of a decision taken on the granting of an authorisation within five working days of the taking of the decision. The refusal of the supervisory authority to grant an authorisation shall be reasoned.

Article 58. Rights of a Supervisory Authority

1. In addition to duties and rights laid down in this Law and other legal acts, the supervisory authority shall have the right:

1) to provide instructions to the credit union specified in paragraph 2 of this Article, which the credit union must fulfil within the time limits laid down by the supervisory authority, and forthwith give written notice hereof to the supervisory authority;

2) where the decisions taken by bodies of a credit union pose a threat to the stability and soundness of activities of the credit union, to apply to court according to the procedure set forth by laws to declare them void;

3) to enter into agreements with certified auditors or audit firms, property appraisers or other persons holding appropriate qualifications on the carrying out of an inspection of a credit union to evaluate the assets, financial position, the risks taken of the credit union or inspect other areas of the credit union’s activities. Where upon completion of the inspection it is established that the credit union has supplied incorrect information to the supervisory authority or where other infringements of legal acts are established, the expenses in connection with organisation of the inspection incurred by the supervisory authority shall be covered by the credit union. Where the persons acting in accordance with the agreements concluded with the supervisory authority and referred to in this subparagraph carry out the credit union’s inspection, they shall be subject to provisions of paragraphs 2 and 3 of Article 60 of this Law;

4) to demand the replacement of a certified auditor or an audit firm auditing sets of financial statements of the credit union where the audit firm or the certified auditor does not meet (carry out) the requirements set forth by laws;

5) to demand the replacement of the controllers’ commission (controller) of the credit union or some members thereof carrying out of a check of sets of financial statements of the credit union where they do not meet or breach the requirements set forth by legal acts and the articles of association of the credit union, and inappropriately perform the functions and duties assigned thereto.

2. The supervisory authority upon identification of infringements of legal acts or shortcomings in the activities of a credit union, or upon establishing that the activities of the credit union pose a threat to the stability and soundness of activities of the credit union shall have the right to issue to the credit union the following written instructions:

1) to eliminate the infringements of the legal acts or shortcomings in the activities of the credit union within the time limits established by the supervisory authority;

2) not to conclude certain transactions or reduce the scope of such transactions, including transactions on the purchase of the credit union’s ancillary services or acquisition of immovable property, or to sell or otherwise transfer to third parties immovable property;

3) to carry out an audit of the set of interim financial statements of the credit union within the time limit laid down by the supervisory authority;

4) within the time limits laid down by the supervisory authority to prepare and implement an acceptable action plan for the restructuring of activities of the credit union and/or the elimination of identified infringements and/or shortcomings;

5) to convene the general meeting of the credit union’s members or a meeting of the supervisory board or the board and to discuss there the issues proposed by the supervisory authority;

6) for the heads of the credit union to appear before the supervisory authority and provide clarifications. The supervisory authority shall have the right to announce publicly its instruction to the heads of the credit union to appear before the supervisory authority;

7) to carry out other actions or not to carry out certain actions in order to eliminate infringements of legal acts or shortcomings in activities of the credit union, or to ensure the stability and soundness of the activities of the credit union.

3. The supervisory authority, upon identification of infringements of legal acts or shortcomings in activities of a credit union or where activities of the credit union pose a threat to the stability and soundness of activities of the credit union, shall have the right to temporarily set for the credit union individual prudential ratios or additional prudential requirements. Such a decision of the supervisory authority must be substantiated and taken in accordance with the provisions of paragraph 2 of Article 62 of this Law.

4. The instructions referred to in paragraphs 2 and 3 of this Article may be given by imposing sanctions simultaneously.

5. According to the procedure set forth by the supervisory authority, the employees of the supervisory authority shall have the right to participate in the work of bodies of a credit union and committees of the credit union – to attend meetings or sittings in the capacity of observers or otherwise observe activities of the bodies of the credit union, the committees of the credit union and heads of the credit union.

6. The supervisory authority according to the procedure set forth by it and in compliance with the legal acts regulating the protection of personal data shall have the right to store and otherwise process data on debtors of a credit union. The credit union must provide to the supervisory authority data on debtors of the credit union and shall have the right to use these data according to the procedure set forth by legal acts of the supervisory authority.

Amendments to the Article:

No XI-1342, 21/04/2011, Valstybės Žinios (Official Gazette), 2011, No 52-2517 (03/05/2011)

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 59. Appeal against Decisions, Acts (Omissions) of the Supervisory authority

1. The persons, whose rights or interests protected under the law have been violated, shall have the right to file an appeal to court against decisions, acts (omissions) of the supervisory authority according to the procedure set forth by laws.

2. Filing of an appeal with court shall not have suspensory effect on a decision or an action appealed against until its resolution.

Article 60. Inspection of a Credit Union

1. Inspection of credit unions shall be conducted by the employees of the supervisory authority. The supervisory authority by inspecting a credit union shall have the right to engage third parties.

2. A credit union must ensure the following conditions to carry out an inspection:

1) to provide information and documents requested by them to the persons conducting the inspection;

2) to provide an opportunity for the persons conducting the inspection to make use of data of the credit union’s information systems;

3) to provide the persons conducting the inspection with a workstation.

3. The persons conducting an inspection shall have the right:

1) to have unimpeded access to the premises of a credit union and divisions thereof during the office hours of the credit union under inspection;

2) to request and obtain the information and documents (originals or certified copies thereof) required to carry out the inspection, oral or written clarifications of the heads and other employees of the credit union;

3) to request copies of submitted documents or to make copies thereof themselves at the expense of the credit union;

4) to have other rights laid down by legal acts.

4. Upon completion of an inspection, its results shall be provided in writing to a credit union. Members of the credit union’s supervisory board and the board, and the head of administration must familiarise themselves with the results of the inspection by affixing their signature thereto.

5. Legal acts of the supervisory authority shall set forth a detailed procedure for inspecting and recording results thereof.

6. Supervision of the activities of members of credit unions and of the Central Credit Union carried out by the Central Credit Union and, where necessary, inspection thereof shall be subject to the provisions of paragraphs 2 and 3 of this Article.

Article 61. Sanctions

1. The supervisory authority shall have the right to impose the following sanctions on licensed credit unions:

1) to warn on infringement of this Law and other legal acts regulating safe and sound activities or of nonfeasance of instructions of the supervisory authority;

2) to impose the penalties specified by this Law;

3) to temporarily prohibit the provision of one or several financial services;

4) to temporarily or permanently prohibit activities of one or several branches or other structural divisions of the credit union. Where the supervisory authority takes a decision on the temporary prohibition of activities of a branch or another structural division, the branch or another structural division shall not have the right to provide financial services, and where a decision is taken to permanently prohibit activities of a branch or another structural division, a credit union must additionally forthwith take a decision on the termination of the activities of the branch or another structural division;

5) to temporarily suspend from office a member (members) of a credit union’s supervisory board, a member (members) of the board, the head of the credit union’s administration, a member (members) of the loan committee or to remove from office a member (members) of the credit union’s supervisory board, a member (members) of the credit union’s board, the head of the credit union’s administration, a member (members) of the loan committee and to require that they be removed from office and/or a contract concluded therewith be terminated, or they be divested of their powers;

6) to announce a restriction (moratorium) on activities of a credit union;

7) to temporarily restrict the right to dispose of the funds in accounts in the Central Credit Union and in other credit unions, and of other assets;

8) to withdraw the issued licence or to temporarily suspend its validity thereof until the grounds for the suspension of the licence exist; when the grounds for license suspension cease to exist, the supervisory authority shall, without delay, and at least within five business days of satisfying itself about the cessation of the grounds, restore the validity of the licence;

9) appoint a temporary representative for the supervision of credit union activities.

2. The supervisory authority shall have the right to impose one or several sanctions.

3. When taking a decision on the imposition of a sanction and selecting a specific sanction (sanctions), the supervisory authority shall take account of the content, scope, recurrence of discovered infringements and shortcomings in activities, influence thereof on the interests of depositors and other creditors, the financial position of a person who is subject to the sanction, the preparedness and possibilities of the founder, members and heads a credit union to bring the infringements to an end and to eliminate the shortcomings, also consequences of the identified infringements and shortcomings in the activities, as well as of the sanction (sanctions) to be imposed on the person who is subject to the sanction, and on the stability and soundness of the system of credit unions.

4. A decision of the supervisory authority on the imposition of a sanction on a credit union shall come into force on the day following that of taking of the decision, except where this Law or the decision provides otherwise.

5. A decision of the supervisory authority on the imposition of a sanction (sanctions) must be substantiated and may be appealed against to court according to the procedure set forth by laws. An appeal shall not suspend the execution of such a decision. A court shall not give its opinion and resolve a dispute over the selection of the type of a sanction and expedience of imposition thereof.

6. Enforcement measures, provided for in subparagraphs 1 and 3 of paragraph 3 of Article 71 of the Law on Administrative Proceedings of the Republic of Lithuania, cannot be applied in cases examining the complaints (applications) against the decision of the supervisory authority to impose sanctions set out in subparagraphs 6, 7 and 8 of paragraph 1 of this Article.

7. The court, having examined the complaint (application) against the decision of the supervisory authority to impose sanctions set out in subparagraphs 6, 7 and 8 of paragraph 1 of this Article under the conditions laid down in this Law, shall have the right to award damages; however, shall not have the right by granting the complaint (application) to annul the contested decision, to oblige a supervisory authority to bring an infringement to an end or implement other court orders, or to resolve the dispute in any other way due to which the validity of the contested decision is suspended or revoked, or the situation existed prior to making a decision is otherwise restored.

8. Temporarily imposed sanctions shall remain in force until the expiry of the time limit referred to in a decision of the supervisory authority on the imposition of the sanction. This time limit may be defined by a specific date, period or related to the rise of certain circumstances (disappearance of circumstances), except where the supervisory authority takes a decision on the lifting of the sanction before the expiry of the fixed time limit.

Amendments to the Article:

No XI-1669, 17/11/2011, Valstybės Žinios (Official Gazette), 2011, No 145-6815 (01/12/2011)

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 62. Basic Principles of and Procedure for Imposing Sanctions

1. The supervisory authority shall have the right to impose the sanctions specified by this Law in the presence of any of the following grounds:

1) the information, which is specified by this Law or legal acts of the supervisory authority or which has been requested, is not supplied within the fixed time limits or incorrect information is supplied;

2) the instructions given by the supervisory authority in compliance with this Law are not carried out in the prescribed manner;

3) the requirements set for the issuance of a licence are not met;

4) the requirements of the laws regulating the safe and sound activities of credit unions including of the Law on Insurance of Deposits and Liabilities to Investors of the Republic of Lithuania and of the legal acts adopted by the supervisory authority are violated, or activities or the financial situation of a credit union constitute a threat to the public interest and/or interests of clients, or impair the functioning of the system of credit unions of the Republic of Lithuania;

Amendments to the paragraphs of the Article:

No XII-2060, 24/11/2015, published in TAR on 02/12/2015, identification code 2015-19171

5) in other cases stipulated in this Law.

2. The supervisory authority, prior to considering the imposition of a sanction, shall give notice, not later than ten days prior to consideration of this issue, to a person subject to the sanction of the venue and time of the consideration of the issue and supply him with information on the discovered facts forming the basis for the imposition of the sanction or grant the heads of a person subject to the sanction access to the said facts. The person who has received the notification shall have the right to provide written clarifications prior to the consideration of the issue. The issue of the imposition of the sanction shall be considered in the presence of the heads of a person who is subject to the sanction (at least the chairman of the board or the head of administration). A failure of the heads to appear or to provide clarifications shall not preclude the consideration of the imposition of the sanction. In cases of urgency, the supervisory authority shall have the right to resolve the issue on the imposition of the sanction disregarding the provisions of this paragraph.

3. Sanctions may be imposed after the lapse of not more than two years from the day of the commission of an infringement, and in the event of a continuous infringement – from the day of the commission of the last acts of the continuous infringement or from the day of the termination of the continuous infringement.

4. A decision on the imposition of a sanction shall be posted (delivered) to a credit union within five days. Information on the sanction imposed shall be announced in accordance with the procedure set forth by the legal acts adopted by the supervisory authority; however, the supervisory authority may take a decision not to announce such information publicly where announcing thereof publicly may have a detrimental effect on the stability and soundness of a credit union or the system of credit unions of the Republic of Lithuania.

5. The supervisory authority shall adopt a decision on imposition of a sanction, which according to the Law on Insurance of Deposits and Liabilities to Investors is considered to be an insured event, not later than within five working days from the day when it establishes that a credit union holding a licence issued by the supervisory authority is unable to settle a reasonable claim to return a deposit and there is a basis to believe that it will not be able to settle it soon.

Amendments to the paragraph of the Article:

No XII-2060, 24/11/2015, published in TAR on 02/12/2015, identification code 2015-19171

Amendments to the Article:

No XI-378, 21/07/2009, Valstybės Žinios (Official Gazette), 2009, No 93-3971 (04/08/2009)

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 63. Penalties

1. The supervisory authority shall have the right to impose the following penalties on a credit union:

1) for a failure to supply the information or documents specified or required by this Law or legal acts of the supervisory authority within the fixed time limit or for the supply of incorrect information – up to 0.5 per cent of annual gross income;

2) for a failure to carry out the instructions given by the supervisory authority in accordance with this Law or for an improper carrying out thereof – up to 1 per cent of annual gross income or up to LTL 1 000 for each day of the failure to carry out an instruction or improper carrying out thereof;

3) for carrying out of the actions which it has the right to carry out only upon obtaining an authorisation of the supervisory authority without the authorisation of the supervisory authority – up to 1.5 per cent of annual gross income;

4) for the actions or activities prohibited by this Law or for the provision of financial services where such a right is restricted under this Law  up to 2 per cent of annual gross income;

5) for other infringements of the legal acts regulating safe and sound activities of the credit union  up to 0.1 per cent of annual gross income.

2. The specific amount of a penalty to be imposed shall be determined by taking account of the nature of an infringement, duration thereof and previously imposed sanctions.

3. Penalties shall be paid into the State budget not later than within one month of receiving by a credit union a decision of the supervisory authority on the imposition of a penalty. A penalty imposed in accordance with subparagraph 2 of paragraph 1 of this Article shall be paid into the State budget for each day of nonfeasance or misfeasance of an instruction. Where the penalty is not paid within the fixed time or, where the decision of the supervisory authority has been appealed against to court within ten calendar days from the entry into force of the decision, it shall be recovered by a decision of the supervisory authority without suit (without an instruction of a credit union subject to the penalty to debit funds) from the funds held in credit institutions by the credit union subject to the penalty, or the decision of the supervisory authority shall be enforced according to the procedure set forth by the Code of Civil Procedure of the Republic of Lithuania.

Article 64. Removal from Office of a Member (Members) of a Credit Union’s Supervisory Board, a Member (Members) of the Board, the Head of the Credit Union’s Administration, a Member (Members) of the Loan Committee

1. As of the day of the delivery to a credit union of a decision by the supervisory authority to suspend from office a member (members) of the credit union’s supervisory board, a member (members) of the board, the head of the credit union’s administration, a member (members) of the loan committee, the person removed from office shall not have the right to exercise his functions and all decisions taken by him after entering into force of the said decision of the supervisory authority shall be void.

2. Where the supervisory authority takes a decision to remove from office of a member (members) of a credit union’s supervisory board, a member (members) of the board, the head of the credit union’s administration, a member (members) of the loan committee and to require that they be removed from office and/or a contract concluded therewith be terminated, or they be divested of their powers, a body of the credit union which has such a right must, within the time limit laid down in the decision of the supervisory authority, remove the person from office and/or terminate the contract concluded therewith, or divest him of his powers.

3. A decision taken by the supervisory authority to remove a member (members) of a credit union’s supervisory board, a member (members) of the board, the head of the credit union’s administration shall be communicated to the credit union and to the manager of the Register of Legal Entities and published on the Internet site of the supervisory authority. A decision of the supervisory authority on removal from office of a member (members) of the credit union’s loan committee shall be communicated to the credit union.

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 641. Temporary Representative for the Supervision of Activities of a Credit Union

1. A legal or natural person may be appointed a temporary representative for the supervision of activities of the credit union (hereinafter - the temporary representative for the supervision of the activities). A natural person or the head of the legal entity appointed a temporary representative for the supervision of activities shall be subject mutatis mutandis to the requirements of good repute and qualifications and experience set out in paragraph 2 of Article 30 of this Law. Where a natural person is appointed a temporary representative for the supervision of activities, an assistant to the temporary representative for the supervision of activities may be appointed. Salaries of the temporary administrator and his assistant thereof, taking account of the scope of activities, qualifications and duration of the activities of the temporary administrator, shall be determined by the supervisory authority. The salaries shall be paid from the funds of a credit union.

2. Where the temporary representative for the supervision of the activities is assigned, a board and heads of the credit union must obtain the consent of the temporary representative for the supervision of activities to any decision related to the activities of credit unions. All decisions of the board and heads of the credit union without the consent of the temporary representative for the supervision of activities following the entry into force of the decision to appoint a temporary representative for the supervision of activities shall be void.

3. The temporary representative for the supervision of activities shall not agree with the decisions of the board and heads of the credit union provided he deems they are contrary to the legislation on safe and reliable operations of credit unions, or otherwise pose a threat to the stability and reliability of the activities of credit unions. The temporary representative for the supervision of activities by performing its functions shall be subject mutatis mutandis to the provisions of paragraphs 2 and 3 of Article 60 of this Law. The temporary representative for the supervision of the activities must provide information to the supervisory authority set thereof.

4. The supervisory authority shall notify in writing the credit union and the manager of the Register of Legal Entities on the decision to appoint or to withdraw a temporary representative for the supervision of the activities no later than the next business day after the date of adoption of the decision.

5. The temporary representative for the supervision of activities shall be withdrawn from office where:

1) it is determined that the credit union can safely and reliably operate, or the application of such measures, in the opinion of the supervisory authority, is no longer appropriate for other reasons;

2) license issued to a credit union is cancelled.

Supplemented by the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 65. Restriction (Moratorium) on Activities of a Credit Union

1. Restriction (moratorium) on activities of a credit union shall be a temporary partial restriction on the activities of the credit union. Restrictions on the activities of the credit union shall be set by this Law and a decision of the supervisory authority on the announcement of a restriction (moratorium) on the activities of the credit union.

2. In addition to other grounds laid down in Article 62 of this Law, the supervisory authority shall have the right to announce a restriction (moratorium) on the activities of a credit union where the credit union fails within five working days to settle at least one reasonable financial claim of a creditor (due to a deficit of funds in the credit union’s accounts, it fails to process a client’s payment order, to return deposits or other borrowed funds or to perform other financial obligations, etc.), or there is a reasonable basis to believe that it will not be able to settle it soon.

3. The supervisory authority, when taking a decision on the announcement of a restriction (moratorium) on the activities of a credit union, shall appoint a temporary administrator of the credit union. Operating conditions of the temporary administrator shall be determined in the temporary administration agreement concluded between the supervisory authority and the temporary administrator. Such an agreement may provide for obligations of the supervisory authority relating to the compensation of damage caused by the actions of a temporary administrator to third parties, as far as it does not contradict the Civil Code of the Republic of Lithuania. The temporary administrator shall have the right to resign after giving a seven-day’s advance notice in writing to the supervisory authority. Where the temporary administrator resigns, the supervisory authority must immediately take a decision on the appointment of the new temporary administrator.

4. A legal or natural person may be appointed a temporary administrator. Where a natural person is appointed a temporary administrator, one or several assistants of the temporary administrator may be appointed. The temporary administrator shall have the right, at his discretion; to use service providers (including legal, accounting, auditing, and management consultants) required in order to properly carry out his functions. Salaries and other costs (including the costs of service providers) of the temporary administrator and assistants thereof, taking account of the scope of activities, qualifications and duration of the activities of the temporary administrator, shall be determined in the agreement concluded between the supervisory authority and the temporary administrator. The salaries and other costs (including the costs of service providers) shall be paid from the funds of a credit union prior to any other payments of the credit union. In the event the administered credit union is the subject of bankruptcy proceedings, the payments for the temporary administrator shall be paid prior to any other payments to the credit union. In the event a credit union fails to pay the temporary administrator on time, the supervisory authority must pay to the temporary administrator, which then shall have the right to claim the amounts paid from the credit union. An employee of the supervisory authority may not be appointed the temporary administrator of a credit union. The temporary administrator must be of good repute, as indicated in paragraphs 3 and 4 of Article 30 of this Law and have qualification and practice required for the proper discharge of duties.

5. The time limit for a restriction (moratorium) on the activities of a credit union shall be laid down by the supervisory authority. This time limit may not exceed six months. Where the supervisory authority approves the conclusions and proposals submitted by a temporary administrator on the restoration of the stability and soundness of the activities of the credit union, the time limit for the restriction (moratorium) on the activities of the credit union may be extended for a period of up to six months by a decision of the supervisory authority.

6. A decision taken on the announcement, extension or revocation of a restriction (moratorium) on the activities of a credit union and the appointment of the temporary administrator of the credit union shall, on the working day following that of taking of the decision at the latest, be communicated to the credit union and the manager of the Register of Legal Entities, and published on the Internet site of the supervisory authority.

7. As of the day of submission to a credit union of a decision on the announcement of a restriction (moratorium) on the activities of the credit union and the appointment of the temporary administrator of the credit union:

1) powers of the supervisory board, the board and the head of administration of the credit union shall be suspended. The temporary administrator, as far as necessary, shall have the right to implement the powers of the supervisory board, the board and the head of administration of the credit union. All decisions of the bodies of the credit union referred to in this subparagraph and taken after the entry into force of the decision to announce a restriction (moratorium) on the activities of the credit union and to appoint the temporary administrator shall be void and unenforceable;

2) decisions of the general meeting of the credit union’s members shall enter into force only after approval of the temporary administrator of the credit union and of the supervisory authority. They shall present their opinion on a decision of the general meeting of the members submitted for agreement not later than within fifteen days of receipt of the decision of the general meeting of the members;

3) the credit union shall be prohibited from performing payment obligations or transfer assets of the credit union where these obligations result from the transactions concluded or other legal facts arising prior to the announcement of the restriction (moratorium) on the activities of the credit union, except for the payments necessary to ensure activities of the credit union during the restriction (moratorium). During the restriction (moratorium) on the activities of the credit union, penalties for nonfeasance or misfeasance of an obligation of the credit union shall not be calculated and paid. Interest on the credit union’s obligations shall be calculated and shall be paid only after the expiry of the time limit for the restriction (moratorium) on the activities of the credit union;

4) it shall be prohibited to set off any claims of the credit union and clients thereof;

5) cases pending in court in which material claims have been filed to the credit union, also recoveries under an enforceable title, where the credit union is the debtor, shall be suspended.

8. The prohibitions referred to in subparagraphs 3 and 4 of paragraph 7 of this Article shall not be applied where the laws of the Republic of Lithuania regulating the functioning of the payment and securities settlement systems, as well as other laws establish that a credit union must perform obligations when its activities are restricted.

9. The temporary administrator of a credit union shall act in accordance with this Law and instructions of the supervisory authority. The temporary administrator of a credit union, inter alia:

1) shall direct the business of the credit union in accordance with the instructions of the supervisory authority and seek to ensure the sound and prudent management of the credit union, contribute to the solution of problems of the credit union in deciding matters falling within its competence or propose to the general meeting of the credit union’s members to take the necessary decisions;

2) must, within the time limit laid down by the supervisory authority, examine and assess the financial situation of the credit union, possible means of restoration of the stability and soundness of activities of the credit union, other means to resolve problems and present to the supervisory authority his conclusion and proposals along with the interim financial statements prepared on the basis of the carried out assessment of the financial situation, and other data indicated by the supervisory authority. The conclusion and proposals of the temporary administrator must, inter alia, provide for a comparative probability of the successful implementation of the possible means of restoration of the stability and soundness of activities of the credit union, other means of problems solving, the expenses of the implementation of each possible means, time limits and benefits, also the need to extend the time limit for a restriction (moratorium) on the activities of the credit union and/or to take other decisions allowing to implement the means of restoration of the stability and soundness of activities of the credit union and other problem solving means of the credit union. Where there are no real possibilities to restore the stability and soundness of activities of the credit union, to apply other means of problem solving of the credit union or as provided in Article 651 of this Law, the temporary administrator may propose in his conclusion and proposals to consider the credit union’s winding up or opening of bankruptcy proceedings;

3) shall have the right to terminate, without warning, the contracts concluded with members of the credit union’s board and the head of administration. Severance pay shall not be granted to the said persons;

4) must provide information on the process of administration to the supervisory authority according to the procedure set forth by the supervisory authority and to the general meeting of the credit union’s members according to the procedure set forth by the general meeting;

5) act in accordance with other instructions of the credit union.

10. The temporary administrator of the credit union shall have the right to apply to the supervisory authority with a request to provide instructions on certain issues relating to the activities of a credit union and a temporary administrator. The supervisory authority must promptly provide such instructions. A temporary administrator shall have the right to suspend its activities related to the issues raised until the submission of clear instructions of the supervisory authority.

11. The temporary administrator of a credit union must exercise his functions prudently, in good faith. The temporary administrator of the credit union may not exercise the rights granted to him for his personal needs or those of third parties. This shall not restrict the rights of the temporary administrator under paragraph 9 of this Article. The temporary administrator shall be held liable for incurred damage under law, unless otherwise provided in the contract concluded between the supervisors and the temporary administrator. In any case, the temporary administrator shall not be held liable for damage resulting from the actions taken in accordance with the instructions provided by the supervisory authority.

12. The supervisory authority shall, taking account of proposals of the temporary administrator of a credit union, take one of the following decisions prior to the expiry of the time limit for a restriction (moratorium) on the activities of the credit union:

1) lift the moratorium on the activities of the credit union where the credit union meets the requirements set by legal acts and can operate in a stable and sound manner;

2) to extend the time limit for the restriction (moratorium) on the activities of the credit union where the supervisory authority approves the conclusions and proposals presented by the temporary administrator on the restoration of the stability and soundness of activities of the credit union or application of other problem solving means of the credit union;

3) withdraw a licence if there are no real possibilities to restore the stability and soundness of activities of the credit union, to apply other means of problem solving of the credit union or as provided in Article 651 of this Law, or the transfer of assets, rights, transactions and liabilities of the credit union carried out in accordance with the provisions of Article 651 of this Law is completed.

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 651. Transfer of Assets, Rights, Transactions and Liabilities of a Credit Union

1. Assets, rights, transactions and liabilities of the credit union (hereinafter in this article - the administered credit union), where a restriction (moratorium) on its activities is announced in accordance with Article 65 of this Law and a temporary administrator is appointed, may be transferred to another credit authority provided:

1) there is a real threat that the net value of the assets of the administered credit union will become less than the liabilities of the credit union or a credit union will meet other terms and conditions laid down in the legislation of the supervisory authority pursuant to paragraph 1 of Article 73 of this Law under which the credit union may be recognized as insolvent, or there is determined that the credit union has met the terms and conditions under which the credit union may be recognized as insolvent, and

2) the transfer of assets, rights, transactions and liabilities of the administered credit union to another credit union will allow maintaining the confidence of depositors in the stability and reliability of the system of credit unions and otherwise protecting the public interest, and liquidation of the administrated credit union will not protect these interests to the same extent.

2. A temporary administrator shall organize and execute the transfer of assets, rights, transactions and liabilities of the administrated credit union under the approval of the supervisory authority and the instructions given.

3. Where the supervisory authority approves the transfer of assets, rights, transactions and liabilities of the administered credit union, the temporary administrator, having regard to the instructions of the supervisory authority, shall organize and carry out negotiations for the takeover of assets, rights, transactions and liabilities of the administered credit union with credit institutions which are authorized to provide financial services related to assets, rights, liabilities and transactions of the administered credit unions. Credit institutions participating in the negotiations shall have access to information on the financial status of the administered credit union, which the temporary administrator deems necessary in taking a decision on the takeover of assets, rights, transactions and liabilities of the administered credit union. The provisions of Article 49 of this Law shall apply mutatis mutandis to the protection of such information.

4. The supervisory authority taking into account the necessity to address the issue of the transfer of assets, rights, transactions and liabilities of the administered credit unions especially quickly and effectively, as well as the information available to the supervisory authority at the time of taking of the decision on the capacity of credit institutions authorized to provide financial services in the Republic of Lithuania to take over the assets, rights, transactions and liabilities of the administered credit union or other reasons considering that the organization and execution of negotiations under the provisions of paragraph 3 of this Article would not be appropriate, shall have the right to instruct the temporary administrator to organize and carry out negotiations only with some of the credit institutions authorized to provide financial services related to the assets, rights, transactions and liabilities of the administered credit union, with one of them or do not organize and carry out the negotiations at all, and prepare to transfer the assets, rights, transactions and liabilities of the administered credit union to another credit institution.

5. During the transfer of assets, rights, transactions and liabilities of the administered credit union, all or part of the assets, rights (property and non-property) and transactions of the administered credit union, or all or part of the liabilities of the administered the credit union may be transferred to; however:

1) in all cases liabilities of the administered credit union to depositors, referred to in the Law on Deposit Insurance and Insurance of Liabilities to Investors of the Republic of Lithuania, to whom in the event of the insured event insurance payments, not exceeding the amount to be paid by the state company Deposit and Investment Insurance, will be paid, and the credit union’s liabilities to public authorities and institutions arising out of transactions entered into after the date of publication of the restriction (moratorium) on the activity of the credit union must be transferred;

2) liabilities of the administered credit union to creditors, who’s the fifth and sixth rank claims are satisfied in accordance with the provisions of Article 76 of this Law in the case of bankruptcy of the credit union, shall not be transferred;

3) the principle that creditors of the administered credit union, not mentioned in subparagraphs 1 and 2 of this paragraph, whose claims in the case of bankruptcy of the credit union are satisfied in rank established in Article 76 of this Law, are treated equally and shall not suffer more losses than they would have incurred where instead of the transfer of assets, rights, transactions and liabilities of the administered credit union to another credit institution, the bankruptcy proceedings had been instituted at the same time against the administered credit union, must be followed.

6. The assets, rights, transactions and liabilities of the administrated credit union may be transferred only after the assessment carried out by the audit company invoked by the temporary administrator and (or) property appraisal company. The assessment costs shall be borne by the administered credit union. Where it is necessary to address the issue on the transfer of assets, rights, transactions and liabilities of the managed credit union very quickly, the assets, rights, transactions and liabilities of the administered credit union may be transferred only when the temporary administrator carries out their preliminary evaluation and his findings are confirmed by the supervisory authority, and the audit firm and (or) property appraisal company carry out the evaluation after the transfer of assets, rights, transactions and liabilities. In determining the value of the assets, rights, transactions and liabilities of the administered credit union, the finding of the supervisory authority as to whether there are grounds to revoke a license of the administered credit union, and the consequences of the revocation of the license established in Article 10 of this Law, must be taken into account.

7. Where the value of the transferred liabilities of the administered credit union is higher than the value of the transferred assets, rights and transactions of the administered credit union, the transfer of assets, rights, transactions and liabilities of the administered credit union shall be carried out under the provisions of Article 121 of the Law on Deposit Insurance and Insurance of Liabilities to Investors of the Republic of Lithuania or by covering the amount of differences between the values from other sources. Where it comes to light that after the evaluation of the audit firm and (or) property appraisal company carried out in accordance with paragraph 6 of this Article, the value of the liabilities transferred by the administered credit union is less than the value of the transferred assets, rights and transactions of the administered credit union, the credit institution to which the assets, rights, transactions and liabilities of the administered credit union are transferred, shall pay to the administered credit union compensation of differences between the values.

8. During the transfer of assets, rights, transactions and liabilities of the administered credit union to another credit institution:

1) all assets, rights, transactions and liabilities planned to be transferred can be transferred immediately or the transfer may be affected by instalments;

2) assets, rights, transactions and liabilities, already transferred under the conditions and terms provided in the documents of transfer of assets, rights, transactions and liabilities, may be returned, and, if necessary, the amount of the difference between values paid in accordance with paragraph 7 of this Article to the administered credit union, is adjusted, where such possibility is clearly indicated in these documents or it appears that the assets, rights, transactions and liabilities, which were not planned to be transferred, are transferred;

3) where the assets, rights, transactions and liabilities transferred are subject to foreign law, and such transfer is not recognized by the foreign jurisdiction, the administered credit union must transfer the assets, rights, transactions and liabilities in trust to the credit institution, which takes over assets, rights, transactions and liabilities. The administered credit union and the credit institution, taking over the assets, rights, transactions and liabilities, must take all steps to legally implement such a transfer of assets, rights, transactions and liabilities.

9. During the transfer of assets, rights, transactions and liabilities of the administered credit union:

1) the provisions of the Civil Code of the Republic of Lithuania, other laws and regulations or transactions of the credit union, including the requirements of advance notice for creditors, debtors or any other person of such actions, which are carried out during the transfer of assets, rights, transactions and liabilities, including the requirement to obtain permits or consents of other persons to the performance of such actions, the consent of the creditor to transfer the debt to another person, or otherwise restricting the execution of the transfer of assets, rights, transactions and liabilities, shall not apply;

2) the transfer of assets, rights, transactions and liabilities shall not be considered to be a breach of the transaction and (or) a legitimate reason to terminate a transaction for creditors, debtors or any other persons concluded with the administered credit union. In the event the creditors, debtors or any other person shall terminate the transaction not complying with this provision, such a transaction may be returned to the administered credit union.

10. The temporary administrator shall immediately publish the transfer of assets, rights, transactions and liabilities on the website of the administered credit union, and at least in two national newspapers of the Republic of Lithuania no later than within five business days from the date of transfer of assets, rights, transactions and liabilities.

11. Upon completion of the transfer of assets, rights, transactions and liabilities, the supervisory authority, in the event there is evidence that the administered credit union is insolvent, shall apply to the court for the opening of bankruptcy proceedings against the administered credit union. Powers of the temporary administrator shall end when the court makes an order for the opening of bankruptcy proceedings against the administered credit union and appoints an administrator. The court shall have the right to appoint a temporary administrator to perform the functions of an administrator of the credit union. When the court appoints the temporary administrator to perform the functions of the administrator of the credit union, the requirements set forth in the Law on Enterprise Bankruptcy of the Republic of Lithuania on the necessity to have the right to provide bankruptcy administration services in accordance with the procedure set out in the Law on Enterprise Bankruptcy of the Republic of Lithuania and regulations relating to its implementation shall not apply.

12. During the execution of the transfer of assets, rights, transactions and liabilities of the administered credit union and upon its completion, the administered credit union, even in the case of opening of bankruptcy proceedings, must cooperate with a credit institution, which has taken over its assets, rights, transactions and liabilities, and allow it, for the salary corresponding to normal market conditions, to temporarily access to their information and accounting systems, documentation, information and services that are required for a credit institution, which has taken over the assets, rights, transactions and liabilities, to adequately provide financial services related to the transferred assets, rights, transactions and commitments.

13. The duty established in paragraph 12 of this Article to cooperate and to provide services to the credit institution, which has taken over the assets, rights, transactions and liabilities of the administered credit union, shall also apply to persons who provide services to the administered credit union at the time of publication of the restriction (moratorium) on the activities.

14. During the examination of the claims or complaints (applications) in the courts for the action (acts) of the supervisory authority, the temporary administrator and other entities involved in the organization and execution of the transfer (return) of assets, rights, transactions and liabilities of the credit union, the provisions of Article 131 of the Law on Financial Sustainability of the Republic of Lithuania shall apply mutatis mutandis.

15. A credit institution, which has taken over the assets, rights, transactions and liabilities of the administered credit union, shall not be liable for the obligations of the managed credit union to creditors whose claims were not transmitted to it.

16. Where credit unions, operating in the territory of one county of the Republic of Lithuania the membership criteria of which correspond to subparagraph 1 of paragraph 1 of Article 13 of this Law, participate in the transfer of assets, rights, transactions and liabilities, the criteria for membership of the credit union, which took over the assets, rights, transactions and liabilities, may include the criteria for membership of the credit union, which took over the assets, rights, liabilities and transactions of the administered credit union. Where credit unions, whose registered offices are registered in municipalities located in different counties, participate in the transfer of assets, rights, transactions and liabilities, where natural persons may be the members of the credit union, which took over the assets, rights, transactions and liabilities, if they live, work or study in the municipality located in the territory of the county of the Republic of Lithuania in which the credit union, which took over the assets, rights, transactions and liabilities, has its registered office, and in the territories of the municipalities referred to in the articles of association of credit unions, which took over other assets, rights, transactions and liabilities, adjacent to this county. These provisions shall apply mutatis mutandis to associate members of the credit union, which took over the assets, rights, transactions and liabilities.

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 66. Temporary Restriction on the Right to Dispose of Funds and Other Assets

1. Where the supervisory authority imposes the sanction referred to in subparagraph 7 of paragraph 1 of Article 61 of this Law, a credit union shall not have the right to dispose of the funds in its accounts opened with the Central Credit Union and other credit institutions and of other assets specified in the decision of the supervisory authority.

2. A decision of the supervisory authority to temporarily restrict the right to dispose of the funds, held with the Central Credit Union and other credit institutions established in the Republic of Lithuania and of other assets located in the territory of the Republic of Lithuania, shall be considered as a property seizure act and shall be registered in the Register of Property Seizure Acts in the cases and in accordance with the procedure laid down by legal acts. The decision of the supervisory authority must include the data required to register the decision of the supervisory authority in the Register of Property Seizure Acts. In the cases specified by the legal acts regulating the Register of Property Seizure Acts, the decision of the supervisory authority may be temporarily registered in the Register.

CHAPTER NINE

TERMINATION OF A CREDIT UNION

Article 67. Legal Regulation of the Procedure for Reorganisation, Transformation and Winding up of a Credit Union

1. A credit union shall be reorganised and wound up according to the procedure set forth by the Civil Code of the Republic of Lithuania, this Law, and the Law on Financial Institutions of the Republic of Lithuania and, except where this Law provides otherwise, the Law on Cooperative Societies (Cooperatives) of the Republic of Lithuania.

2. A credit union may not be transformed.

Article 68. Reorganisation of a Credit Union

1. When reorganising a credit union by way of merger, another entity participating in the reorganisation or undergoing reorganisation may only be a credit union.

2. When reorganising a credit union by way of division, at least one of the legal persons whereto the credit union’s rights and obligations are transferred or who are established must be a credit union.

3. Where a new credit union is established in the course of reorganisation of the credit union, it must obtain a licence in accordance with the procedure laid down by this Law. In this case, an application for the issuance of the licence and the documents and data required for the issuance of the licence shall be submitted to the supervisory authority together with an application for the granting of an authorisation to reorganise the credit union, and a decision on the granting of the authorisation to reorganise the credit union shall be adopted alongside a decision on the issuance of the licence.

4. The credit unions participating in a reorganisation or undergoing reorganisation must, in the cases specified by this Law, obtain the consent of the supervisory authority to reorganise and an authorisation of the supervisory authority to reorganise the credit unions.

Article 69. Consent to Reorganise a Credit Union

1. Where a credit union is to be reorganised by way of merger, the supervisory authority must be notified of the planned reorganisation, and its consent to reorganise the credit union must be obtained.

2. In order to obtain consent to reorganise a credit union, the credit unions participating in the reorganisation and undergoing the reorganisation, shall submit an application and the documents specified in legal acts of the supervisory authority. Consent to reorganise a credit union shall be granted by the supervisory authority according to the procedure set forth by this Law and legal acts of the supervisory authority. A decision on the granting of consent shall be taken by taking account of criteria for the assessment of the systemic risk level laid down by legal acts of the supervisory authority.

3. The supervisory authority shall take a decision on the granting of consent within one month of the receipt of an application for the granting of the consent.

Article 70. Authorisation to Reorganise a Credit Union

1. Reorganisation of a credit union may be completed only upon obtaining an authorisation of the supervisory authority to reorganise the credit union.

2. An authorisation to reorganise a credit union shall be granted by the supervisory authority according to the procedure set forth by laws and legal acts of the supervisory authority.

3. Upon taking a decision on the reorganisation of a credit union, the credit unions participating in the reorganisation and undergoing reorganisation shall, in order to obtain an authorisation to reorganise the credit union, submit to the supervisory authority an application and the documents and data specified by legal acts of the supervisory authority, including:

1) the terms of reorganisation;

2) a report of the board of the credit union;

3) assessment of the terms of reorganisation;

4) a decision of a body of the credit union on the reorganisation of the credit union;

5) repealed on 05 August 2014;

6) the documents and data evidencing that the credit union meets the requirements set for obtaining a licence where the credit union is to continue its activities after the reorganisation.

4. The supervisory authority must examine submitted documents and take a decision on the granting of an authorisation to reorganise a credit union not later than within three months of the receipt of the application.

5. The supervisory authority may refuse to grant an authorisation to reorganise a credit union where:

1) submitted documents do not meet the requirements set forth by laws and legal acts of the supervisory authority, not all data specified by the legal acts or additionally required have been submitted or they are incorrect;

2) repealed on 05 August 2014;

3) there are the grounds referred to in paragraphs 9 of Article 9 of this Law, where a credit union involved in reorganisation continues its activities after the reorganisation.

6. The supervisory authority shall give a written notice to the manager of the Register of Legal Entities of a decision adopted on the granting of an authorisation to reorganise a credit union.

Article 71. Winding up of a Credit Union

1. A credit union may be wound up by a decision of members of the credit union or on other statutory grounds.

2. The general meeting of a credit union’s members may take a decision on the termination of activities and winding up of the credit union only upon obtaining an authorisation of the supervisory authority to wind up the credit union.

3. An authorisation to wind up a credit union shall be granted by the supervisory authority according to the procedure set forth by laws and legal acts of the supervisory authority.

4. In order to obtain an authorisation to wind up a credit union, the credit union shall submit to the supervisory authority an application and the documents and data specified by legal acts of the supervisory authority, including a plan prepared by the credit union’s board and approved by the general meeting of the credit union’s members on the winding up of the credit union and settlement with creditors and setting out, inter alia, the time limits and sources of settlement with the creditors, as well as conclusions of experts on the value of the credit union’s assets. An application to withdraw a licence must be attached thereto.

5. The supervisory authority must examine submitted documents and take a decision on the granting of an authorisation to wind up a credit union not later than within three months of the receipt of the application.

6. A credit union may be wound up by a decision of the general meeting of the credit union’s members only where it is able to fully settle with its creditors.

7. The supervisory authority may refuse to grant an authorisation to wind up a credit union where:

1) submitted documents do not meet the requirements set forth by laws and legal acts of the supervisory authority, not all data specified by the legal acts or additionally required have been submitted or they are incorrect;

2) a conclusion may be made that the credit union is unable to fully settle with creditors (the credit union’s assets are insufficient to satisfy all claims of the creditors).

8. The supervisory authority shall give a written notice to the manager of the Register of Legal Entities of a decision adopted on the granting or a refusal to grant an authorisation to wind up a credit union.

9. A credit union must, within three working days, notify the supervisory authority of a decision taken at the general meeting of the credit union’s members on the winding up of the credit union and the appointment of the liquidator of the credit union.

10. Where a licence is withdrawn by a decision of the supervisory authority, the general meeting of a credit union’s shareholders must take a decision on the termination of activities of the credit union. In this case, paragraph 2 of this Article shall not apply.

11. A credit union shall be wound up upon a decision of court, where the general meeting of shareholders of the credit union whose licence is withdrawn does not take a decision on the termination of activities of the credit union within the time limit laid down by the supervisory authority. The right to apply to the courts on the winding up of a credit union shall be vested in the supervisory authority, the board of the credit union or at least one member of the credit union. The court must take a decision on the winding up of the credit union within fifteen days of the receipt of an application.

12. Prior to taking a decision on the winding up of a credit union on the grounds other than those referred to in paragraph 11 of this Article, a court must notify thereof the supervisory authority and obtain its conclusion on the winding up of the credit union.

13. In all cases, a court, upon taking a decision on the winding up of a credit union, must notify thereof the supervisory authority within three working days of the taking of the decision.

CHAPTER TEN

BANKRUPTCY OF A CREDIT UNION

Article 72. Legal Regulation of Credit Unions’ Bankruptcy Procedure

Credit unions’ bankruptcy procedures shall be regulated by this Law, the Law on Financial Institutions of the Republic of Lithuania and the Law on Enterprise Bankruptcy of the Republic of Lithuania, except where this Law and the Law on Financial Institutions of the Republic of Lithuania provide otherwise.

Article 73. Conditions for the Recognition of a Credit Union as Insolvent

1. A credit union may be declared insolvent provided there is at least one of the following conditions:

1) a credit union violates the requirements due to the fact that the credit union has suffered or, it is likely, will suffer losses for compensation of which it will need all or a large part of its own funds, or for other reasons related to its financial situation, or, based on objective factors supporting this assessment, will violate in the near future the requirements for the granting of a license and provide the basis for the supervisory authority to revoke the license;

2) the assets of the credit union is, or based on objective factors supporting this assessment, in the near future will be less than its liabilities;

3) a credit union is unable or, based on objective factors supporting this assessment, in the near future will not be able to pay its debts in due time or meet other obligations.

Amendments to the paragraph of the Article:

No XII-2060, 24/11/2015, published in TAR on 02/12/2015, identification code 2015-19171

2. A credit union’s bankruptcy proceedings shall be opened by the court only where there is a conclusion of the supervisory authority on the insolvency of the credit union.

Article 74. Credit Union’s Bankruptcy Proceedings

1. Upon the handing down of a ruling on the opening of a credit union’s bankruptcy proceedings, creditors of the credit union shall be forthwith notified thereof in the manner prescribed in the court’s ruling, and the court hearing the bankruptcy case, case number, requisites of a credit union in bankruptcy and time limits for the acceptance of creditors’ claims shall be published in the local press according to the location of the registered office of the credit union. The court may authorise the credit union’s administrator to carry out the actions referred to in this paragraph.

2. The time limit laid down by court for the lodging of claims by a credit union’s creditors shall not exceed three months of the entering into force of the court’s ruling on the opening of bankruptcy proceedings.

3. By handing down of a ruling by court on the opening of a credit union’s bankruptcy proceedings:

1) the administrator shall commence the exercise of his functions, and powers of bodies of the credit union shall be suspended. Where the Lithuanian Court of Appeal reverses the ruling on the opening of the credit union’s bankruptcy proceedings, the bodies of the credit union shall continue to exercise their functions. In such a case, the court shall notify the manager of the Register of Legal Entities of a change in the legal status of the credit union;

2) performance of all financial obligations, not performed prior to the opening of bankruptcy proceedings, including the payment of interest, penalties, taxes and other mandatory charges, as well as recovery of debts from the credit union in bankruptcy through court or without suit shall be prohibited;

3) calculation of penalties and interest on all obligations of the credit union, including on a default in payments related to employment relationship, shall be terminated. Judgment mortgage may not be imposed.

4. The prohibitions referred to in subparagraph 2 of paragraph 3 of this Article shall not be applied in the cases specified by the laws regulating the functioning of the payment and securities settlement systems and by other laws where a credit union has been directly instructed to perform its obligations upon the handing down of a court’s ruling on the institution of bankruptcy proceedings.

5. The administrator of a credit union must, not later than within five days of the handing down of a court’s ruling, to open the credit union’s bankruptcy proceedings, submit to the court for approval the amount of the credit union’s funds which the administrator shall have the right to use to cover administration expenses pending the approval of an estimate of administration costs.

6. Where the number of creditors of a credit union, against which bankruptcy proceedings have been opened, according to the list approved by court, exceeds 50, the creditors’ committee shall alone enjoy all the rights granted by the Law on Enterprise Bankruptcy of the Republic of Lithuania to the creditors’ meeting, with the exception of the right to form and change the composition of the creditors’ committee. The creditors’ committee shall have not more than 15 members. The State undertaking Deposit and Investment Insurance must be one of the members of the creditors’ committee.

7. The administrator must regularly provide the supervisory authority, according to the procedure and within the time limits laid down by it, with information on the progress of a credit union’s bankruptcy proceedings.

8. Upon the opening of a credit union’s bankruptcy proceedings, a peace agreement may not be concluded.

9. Upon the opening of bankruptcy proceedings against the credit union, the assets, rights, transactions and liabilities under the provisions of Article 651 of this Law shall be transferred to another credit institution, and the credit union’s administrator shall have no right to examine the transactions concluded under the provisions of Article 651 of this Law in transferring the credit union's assets, rights, transactions and liabilities, and to bring actions in court for recognition of such transactions as void.

Amendments to the Article:

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

Article 75. Winding up of a Bankrupt Credit Union

1. A court shall declare a credit union bankrupt and hand down a ruling on the winding up of the credit union within three months of entering into force of a ruling to satisfy creditors’ claims.

2. A credit union’s rights of claim not sold in the prescribed manner and not taken over by creditors shall be gratuitously transferred to an institution appointed by the Government of the Republic of Lithuania.

3. Prior to each settlement with creditors, the liquidator of a credit union shall submit to court for approval a plan of settlement with the creditors. The plan shall indicate the dates when a payment is due, amounts to be paid and the scope of the satisfaction of the creditors’ claims in respect of transferring to the creditors’ assets, including the rights of claim.

4. The claims of a credit union’s creditors in a foreign currency shall be satisfied in euro according to the latest indicative exchange rate of the euro and the foreign currency published by the European Central Bank on the day of handing down of a ruling by court, and where the European Central Bank does not publish the exchange rate of the euro and the relevant foreign currency - according to the latest indicative exchange rate of the euro and the foreign currency published by the Bank of Lithuania on the opening of the credit union’s bankruptcy proceedings.

Amendments to the paragraph of the Article:

No XII-1104, 23/09/2014, published in TAR on 02/10/ 2014, identification code 2014-13434

Article 76. Order of Satisfaction of Creditors’ Claims

1. The claims of employees related to employment relationship, the claims to compensate for damage done due to mutilation or other bodily injury, contraction of an occupational disease or death as a result of an accident at work shall be satisfied first.

2. The claims of the State undertaking Deposit and Investment Insurance on the expenses related to the payment of insurance benefits to the depositors of a credit union referred in the Law on Insurance of Deposits and Liabilities to Investors of the Republic of Lithuania shall be satisfied second.

3. The claims related to the payment of taxes and making other payments to the budget and benefits of compulsory State social insurance and compulsory health insurance, as well as to the granted loans received on behalf of the State and with the guarantee of the State shall be satisfied third.

4. Other claims of a credit union’s creditors, with the exception of the claims referred to in paragraphs 1, 2, 3, 5 and 6 of this Article, shall be satisfied fourth.

5. The claims of creditors according to the contracts conforming to the terms and conditions of a subordinated loan shall be satisfied fifth.

6. The claims of members of a credit union’s supervisory board, members of the board and the head of administration of the credit union shall be satisfied sixth.

I promulgate this Law passed by the Seimas of the Republic of Lithuania.

PRESIDENT OF THE REPUBLIC	ALGIRDAS BRAZAUSKAS

_______________

Annex to the

Law on Credit Unions of the Republic of Lithuania

EUROPEAN UNION LEGAL ACTS IMPLEMENTED BY THIS LAW

1. Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes (OJ 2014 L 173, p. 149).

Supplemented by the Annex:

No XI-378, 21/07/2009, Valstybės Žinios (Official Gazette), 2009, No 93-3971 (04/08/2009)

Amendments to the Annex:

No XII-2060, 24/11/2015, published in TAR on 02/12/2015, identification code 2015-19171

Amendments:

1.

Seimas of the Republic of Lithuania, Law

No VIII-551, 02/12/1997, Valstybės Žinios (Official Gazette), 1997, No 114-2870 (12/12/1997)

LAW SUPPLEMENTING AND AMENDING ARTICLES 9, 17 OF THE LAW ON CREDIT UNIONS OF THE REPUBLIC OF LITHUANIA

2.

Seimas of the Republic of Lithuania, Law

No VIII-1683, 18/05/2000, Valstybės Žinios (Official Gazette), 2000, No 45-1289 (02/06/2000)

LAW AMENDING THE LAW ON CREDIT UNIONS

The new version of the Law

3.

Seimas of the Republic of Lithuania, Law

No IX-194, 27/02/2001, Valstybės Žinios (Official Gazette), No 23-762 (16/03/2001)

LAW AMENDING ARTICLE 10 OF THE LAW ON CREDIT UNIONS

4.

Seimas of the Republic of Lithuania, Law

No IX-979, 20/06/2002, Valstybės Žinios (Official Gazette), 2002, No 65-2639 (28/06/2002)

LAW AMENDING ARTICLE 10 OF THE LAW ON CREDIT UNIONS

The Law is in force since 1 July 2002.

5.

Seimas of the Republic of Lithuania, Law

No X-1615, 17/06/2008, Valstybės Žinios (Official Gazette), 2008, No 76-3003 (05/07/2008)

LAW AMENDING THE LAW ON CREDIT UNIONS

The new version of the Law

The Law comes in force since 1 January 2009.

Paragraph 3 of Article 44 of the Law on Credit Unions of the Republic of Lithuania, as set out in Article 1 of this Law is valid until 1 January 2013.

6.

Seimas of the Republic of Lithuania, Law

No XI-378, 21/07/2009, Valstybės Žinios (Official Gazette), 2009, No 93-3971 (04/08/2009)

LAW SUPPLEMENTING ARTICLE 62 AND ADDITION OF ANNEX TO THE LAW ON CREDIT UNIONS

The Law is in force since 31 December 2010.

7.

Seimas of the Republic of Lithuania, Law

No XI-555, 10/12/2009, Valstybės Žinios (Official Gazette), 2009, No 153-6893 (28/12/2009)

LAW AMENDING ARTICLES 4 AND 9 OF THE LAW ON CREDIT UNIONS

8.

Seimas of the Republic of Lithuania, Law

No XI-597, 22/12/2009, Valstybės Žinios (Official Gazette), 2010, No 1-8 (05/01/2010)

LAW SUPPLEMENTING AND AMENDING ARTICLES 5, 6, 11, 22 OF THE LAW ON CREDIT UNIONS

9.

Seimas of the Republic of Lithuania, Law

No XI-1342, 21/04/2011, Valstybės Žinios (Official Gazette), 2011, No 52-2517 (03/05/2011)

LAW AMENDING ARTICLES 14, 22, 27, 28, 29, 34, 41, 42, 51, 52, 53, 58 AND TITLE OF CHAPTER SEVEN OF THE LAW ON CREDIT UNIONS

10.

Seimas of the Republic of Lithuania, Law

No XI-1568, 30/06/2011, Valstybės Žinios (Official Gazette), 2011, No 86-4179 (13/07/2011)

LAW AMENDING AND SUPPLEMENTING ARTICLES 2, 4, 24, 29 OF THE LAW ON CREDIT UNIONS

11.

Seimas of the Republic of Lithuania, Law

No XI-1669, 17/11/2011, Valstybės Žinios (Official Gazette), 2011, No 145-6815 (01/12/2011)

LAW AMENDING ARTICLES 56 AND 61 OF THE LAW ON CREDIT UNIONS

The Law comes in force since 1 January 2012.

12.

Seimas of the Republic of Lithuania, Law

No XI-1874, 22/12/2011, Valstybės Žinios (Official Gazette), 2011, No 163-7765 (31/12/2011)

LAW SUPPLEMENTING AND AMENDING ARTICLES 4 AND 38 OF THE LAW ON CREDIT UNIONS

The Law comes in force since 1 January 2012.

13.

Seimas of the Republic of Lithuania, Law

No XII-279, 09/05/2013, Valstybės Žinios (Official Gazette), 2013, No 54-2684 (25/05/2013)

LAW AMENDING ARTICLE 13 OF THE LAW ON CREDIT UNIONS

The Law comes in force since 1 July 2013.

14.

Seimas of the Republic of Lithuania, Law

No XII-1047, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10853

LAW AMENDING ARTICLES 2, 4, 5, 9, 10, 12, 13, 14, 15, 16, 18, 22, 23, 24, 26, 27, 28, 29, 30, 32, 33, 34, 35, 36, 37, 38, 39, 42, 45, 47, 52, 53, 58, 61, 62, 64, 65, 70, 74, SUPPLEMENTING BY CHAPTERS 25-1, 39-1, 48-1, 64-1, 65-1 AND REPEALING CHAPTERS 8, 11 OF THE LAW ON CREDIT UNIONS OF THE REPUBLIC OF LITHUANIA NO I-796

15.

Seimas of the Republic of Lithuania, Law

No XII-1042, 17/07/2014, published in TAR on 04/08/2014, identification code 2014-10857

LAW AMENDING ARTICLES 4 AND 9 OF THE LAW ON CREDIT UNIONS OF REPUBLIC OF LITHUANIA NO I-796

The Law comes in force since 1 November 2014.

Amendments:

1.

Seimas of the Republic of Lithuania, Law

No XII-1047, 17/07/2014-, published in TAR on 04/08/2014, identification code 2014-10853

LAW AMENDING ARTICLES 2, 4, 5, 9, 10, 12, 13, 14, 15, 16, 18, 22, 23, 24, 26, 27, 28, 29, 30, 32, 33, 34, 35, 36, 37, 38, 39, 42, 45, 47, 52, 53, 58, 61, 62, 64, 65, 70, 74, ADDING CHAPTERS 25-1, 39-1, 48-1, 64-1, 65-1 AND REPEALING ARTICLES 8 AND 11 OF THE LAW ON CREDIT UNIONS OF THE REPUBLIC OF LITHUANIA NO I-796

2.

Seimas of the Republic of Lithuania, Law

No XII-1104, 23/09/2014, published in TAR on 02/10/2014, identification code 2014-13434

Law Amending Articles 32, 38, 39, 63 and 75 of the Law on Credit Unions of the Republic of Lithuania No I-796

3.

Seimas of the Republic of Lithuania, Law

No XII-1728, 2015-05-19, published in TAR on 28/05/2015, identification code 2015-08226

Law Amending Article 48-1 of the Law on Credit Unions of the Republic of Lithuania No I-796

4.

Seimas of the Republic of Lithuania, Law

No XII-1901, 2015-06-25, published in TAR on 03/07/2015, identification code 2015-10788

Law Amending Article 49 of the Law on Credit Unions of the Republic of Lithuania No I-796

5.

Seimas of the Republic of Lithuania, Law

No XII-2060, 2015-11-24, published in TAR on 02/12/2015, identification code 2015-19171

Law Amending Articles 62 and 73 and Annex to the Law on Credit Unions of the Republic of Lithuania No I-796