REPUBLIC OF LITHUANIA
LAW ON
Enterprises and Facilities of Strategic Importance to National Security and Other Enterprises of Importance to Ensuring National Security
10 October 2002 No IX-1132
(As last amended on 21 July 2009 – No XI-375)
Vilnius
Article 1. Purpose of the Law
This Law has the purpose of specifying the enterprises and facilities which are of strategic or considerable importance to national security, which must belong to the State by the right of ownership and in which, and the conditions under which, a proportion of the capital may be held by the private national and foreign persons conforming to national security interests provided the power of decision is retained by the State. This Law shall also lay down a procedure for and criteria of determination of conformity of potential participants of the enterprises of strategic or considerable importance to national security to Lithuania’s national security interests.
Article 2. Definitions
1. Republic of Lithuania enterprises and facilities of strategic or considerable importance to national security shall mean the enterprises already in operation or yet to be established and the facilities being designed or constructed which are assigned under this Law, according to their purpose and/or nature of activities, a strategic or considerable importance to Lithuania’s national security and which, due to protection of the principal national security interests, are subject to conditions and requirements regarding the ownership rights of the enterprises or facilities, the capital structure of the enterprises and changes therein, adoption of key decisions, also the requirements set forth for potential participants of the enterprises.
2. National security interests shall mean protection of the independence and sovereignty of the State, European and trans-Atlantic integration, reduction of threats and risks for the energy and other economic sectors of vital importance to public security.
3. Potential participant of an enterprise shall mean a natural or legal person that has officially declared an intention of or interest in acquiring the shares of an enterprise of strategic or considerable importance to national security or investing in an enterprise of strategy importance to national security or in an enterprise to be established by it or becoming a participant in a project of development of an enterprise or facility of strategy importance to national security (acquisition of technologies, supply of important raw materials, performance of key development works, etc.). An existing shareholder of an enterprise of strategic or considerable importance to national security seeking to additionally acquire the enterprise’s shares shall also be considered as a potential participant of an enterprise.
4. Special security measures shall be the conditions and requirements specified in legal acts and international treaties and intended to protect the vital interests of the State (security of the State, sovereignty, economic power, public health and safe environment, maintenance of the public order, etc.) with a view to preventing the acts and omissions posing a threat and eliminating the causes and conditions of their occurrence.
Article 3. State Enterprises of Strategic Importance to National Security and Facilities Belonging to the State by the Right of Ownership
1. The following state enterprises shall be of strategic importance to national security:
2. The following facilities belonging to the State by the right of ownership shall be of strategic importance to national security:
1) hydraulic engineering facilities, quays, navigation ways and channels, navigation facilities and other objects of the infrastructure of Klaipėda State Seaport;
2) roads of national significance according to a list approved by the Government of the Republic of Lithuania (hereinafter referred to as the “Government”);
3. The state enterprises indicated in paragraph 1 of this Article may be transformed into public limited liability companies or private limited liability companies or reorganised in the ways specified by the Civil Code of the Republic of Lithuania (hereinafter referred to as the “Civil Code”) only subject to passing of an appropriate law by the Seimas of the Republic of Lithuania.
4. The facilities indicated in paragraph 2 of this Article shall belong to the State by the right of ownership, but may be leased or transferred under a contract of loan for use or transferred for management, use and disposal by the right of trust only to the state enterprises indicated in paragraph 1 of this Article and to the enterprises indicated in paragraph 1 of Article 4 of this Law.
Article 4. Enterprises and Facilities of Strategic Importance to National Security
1. The following enterprises in which a proportion of the capital may be held by the private national and foreign persons conforming to the national security interests, provided the power of decision is retained by the State, shall be of strategic importance to national security:
3) public limited liability company Lithuanian Radio and Television Centre (Lietuvos radijos ir televizijos centras);
8) the national investor (hereinafter referred to as the “national investor”) as indicated in Section Four of the Law of the Republic of Lithuania on the Nuclear Power Plant (hereinafter referred to as the “Law on the Nuclear Power Plant”);
9) public limited liability company Kruonis Pumped Storage Plant (Kruonio hidroakumuliacinė elektrinė);
11) the company implementing the project as indicated in the Law on the Nuclear Power Plant (hereinafter referred to as the “project implementing company”);
2. The facilities of the public limited liability company Lithuanian Energy which form an electric power transmission network of the voltage of 110 kV and above as well as appurtenances thereof shall be of strategic importance to national security.
3. In this Law, the power of decision of the State shall mean that in the enterprises indicated in paragraph 1 of this Article, with the exception of the public limited liability company Lithuanian Energy, the project implementing company and the national investor, the State must hold over ½ of the voting shares of these enterprises. The power of decision of the State in the public limited liability company Lithuanian Energy shall mean that the State and, upon establishment of the national investor and contribution to its authorised capital as a non-monetary contribution of the shares of the public limited liability company Lithuanian Energy belonging to the State by the right of ownership, the national investor shall hold at least 2/3 of the voting shares of this enterprise. The power of decision of the State in the national investor shall mean that, upon implementation by the Government of provisions of paragraph 2 of Article 10 of the Law on the Nuclear Power Plant, the State must hold, by the right of ownership, at least 2/3 of the shares of the national investor which must grant at least 2/3 of all the votes at the general meeting of the shareholders of the national investor.
4. The foreign capital shall make up a proportion of the capital of the enterprises indicated in paragraph 1 of this Article under the same conditions as the private national capital in accordance with the procedure laid down by laws of the Republic of Lithuania.
5. The power of decision of the State must be preserved in the enterprises operating after transformation or reorganisation and indicated in paragraph 1 of this Article.
6. When liquidating (also on the grounds of bankruptcy) the enterprises indicated in paragraph 1 of this Article, the immovable and pledged property belonging to them, also the property indicated in paragraph 2 of this Article may be sold or otherwise transferred only to state institutions of the Republic of Lithuania, state enterprises or the enterprises a proportion of the capital of which is held by the private national and foreign persons conforming to national security interests, though the State or a municipality holds over ½ of the voting shares of these enterprises.
7. Decisions on the increase of the authorised capital of the public limited liability companies indicated in paragraph 1 of this Article wherein the State holds by the right of ownership over ½ of the voting shares of these enterprises, reduction of the authorised capital, amendment of the articles of association, profit (loss) appropriation, reorganisation, division, transformation, restructuring, and liquidation and decisions to withdraw for all shareholders the pre-emption right in acquiring such public limited liability companies’ newly issued shares of a specific issue or such companies’ convertible debentures of a specific issue shall be adopted where the shareholders whose shares make up over ½ of all the votes vote in favour thereof. Adoption of decisions on the issues indicated in this paragraph shall not be subject to the requirements of qualified majority of votes as set forth by the Civil Code and the Law of the Republic of Lithuania on Companies.
Article 5. Enterprises of Importance to Ensuring National Security
1. The following enterprises shall also be of importance to ensuring national security:
8) the enterprises providing the services of water supply and sewage disposal according to a list approved by the Government;
2. With a view to ensuring national security, laws may set forth additional requirements for the operation of the enterprises indicated in paragraph 1 of this Article.
3. The enterprises providing the services of water supply and sewage disposal and indicated in subparagraph 8 of paragraph 1 of this Article must belong by the right of ownership to the state or a municipality, or the state or the municipality must hold over 3/4 of the shares granting votes at the general meeting of the shareholders of these enterprises.
Article 6. Enterprises and Facilities of Particular Strategic Importance to National Security and the Special Security Measures Ensuring the National Security Interests as Applied to Them and to Investors
1. Of particular strategic importance to national security shall be the interconnections of the power system of the Republic of Lithuania with the power systems of the Republic of Poland and the Kingdom of Sweden indicated in the Law on the Nuclear Power Plant and the new nuclear power plant.
2. The Government and state institutions, when adopting decisions and concluding agreements, managers of State-owned shares, when making decisions, concluding agreements and exercising the rights of shareholders of the national investor, the project implementing company and the constructor of electric power transmission interconnections belonging to the State by the right of ownership, shall ensure that:
1) the national investor, the strategic investor, the project implementing company and the constructor of electric power transmission interconnections efficiently implement the principal task of the electric power system of the Republic of Lithuania – to provide Lithuanian consumers with electricity for an unlimited period of time and in an independent, safe and reliable manner;
2) the strategic objects provided for in the National Energy Strategy – the new nuclear power plant, power transmission connections to the Republic of Poland and the Kingdom of Sweden ensuring efficient power exchanges of the required volume between the power system of the Republic of Lithuania and the systems belonging to the Union for the Co-ordination of Transmission of Electricity (UCTE) as well as to the Organisation for the Nordic Transmission System Operators (NORDEL) – be constructed without delay;
3) technical solutions and parameters of the new nuclear power plant and electric power transmission interconnections with the Republic of Poland and the Kingdom of Sweden be selected so that the principal part of the reserve capacities required for the nuclear power plant be received from the European Union member states and that the conditions for the synchronous operation of the power system of the Republic of Lithuania with UCTE be met;
4) the electric power system of the Republic of Lithuania be prepared for immediate synchronous interconnection with the UCTE system as soon as establishment of electricity network interconnections is completed, technical measures are implemented and the actions required for Lithuania to join UCTE are performed;
5) in view of participation of the strategic investor and/or strategic partners in the capital of the project implementing company, the vital national security interests of the Republic of Lithuania and interests of the State be protected, and the criteria of conformity to the national security interests be applied to selection of participants of the project implementing company.
3. The project implementing company, the new nuclear power plant, interconnections of the power system of the Republic of Lithuania with the power systems of the Republic of Poland and the Kingdom of Sweden and investors shall be subject to the special security measures ensuring national security interests.
4. The following special security measures ensuring national security interests shall be stipulated in legal acts:
2) diversification of security of energy supply and primary sources of energy, long-term fuel supply contracts and accumulated necessary fuel stocks;
3) conformity of technologies of the nuclear power plant to established safety requirements and technology supply alternatives;
5. The project implementing company and investors shall also be subject to other special security measures specified in the Law on the Nuclear Power Plant, the Law of the Republic of Lithuania on Nuclear Energy, the Law of the Republic of Lithuania on Radiation Protection and other legal acts.
[The Article shall enter into force on 1 October 2009]
Article 7. Assessment of Conformity of Potential Participants of Enterprises of Strategic or Considerable Importance to National Security to National Security Interests
1. Conformity of potential enterprise participants to national security interests shall be assessed in respect of potential enterprise participants of the enterprises and facilities of strategic importance to national security and the enterprises of importance to ensuring national security wherein the State holds shares by the right of ownership.
2. Conformity of a potential enterprise participant to national security interests shall be assessed in the cases when it:
1) acting independently or, in the cases specified by the Law of the Republic of Lithuania on Securities, jointly with other persons acting in concert, seeks to acquire the shares granting 1/20 or more of votes in an enterprise;
2) seeks to acquire the shares which grant over 1/3 of votes in an enterprise together with the shares already held by him or together with the shares held by other persons acting in concert;
3) seeks to invest in an enterprise of strategic importance to national security or an enterprise to be established by it;
3. The Government shall form a Commission for Assessment of Conformity of Potential Participants of Enterprises of Strategic or Considerable Importance to National Security to the Interests of National Security (hereinafter referred to as the “Commission”). To this Commission, the Government shall delegate its own representatives and representatives of the competent institutions of the field of national security and approve a description of the rules of procedure of the Commission.
4. The management bodies of the enterprises of strategic or considerable importance to national security must refer to the Commission with regard to assessment of conformity of potential enterprise participants to national security interests and provide on the potential enterprise participants the documents and information indicated in the description of the rules of procedure of the Commission.
5. Assessment of conformity to national security interests of potential participants of enterprises of strategic or considerable importance to national security may be initiated at the Commission by the Government, also a state or municipal institution which is the manager of the shares of a public limited liability company belonging to the State or a municipality by the right of ownership (whereto these shares have been transferred by the right of trust) or which exercises the rights and duties of the owner of a state or municipal enterprise.
6. In assessing conformity of potential enterprise participants to national security interests, conclusions shall be submitted to the Commission, within the sphere of their competence and in accordance with the procedure laid down by legal acts, by the State Security Department of the Republic of Lithuania, the Ministry of Foreign Affairs of the Republic of Lithuania, the Ministry of the Interior of the Republic of Lithuania, the Police Department under the Ministry of the Interior, other pre-trial investigation bodies, the Prosecutor General’s Office of the Republic of Lithuania, and other institutions by a decision of the Commission.
7. A decision on conformity of a potential participant of an enterprise of strategic or considerable importance to national security to national security interests shall be adopted by the Commission upon assessing conformity of a person to the criteria specified in paragraph 10 of this Article and the conclusions of the competent state institution participating in the assessment.
8. A potential enterprise participant in respect whereof an assessment has been performed on the grounds specified by this Article and in accordance with the procedure laid down by the legal acts implemented by this Law and a decision has been adopted on conformity of the person subject to the verification to national security interests shall be considered as a person conforming to national security interests.
9. Where a person is a legal entity, it shall be considered that it conforms to Lithuania’s national security interests provided the entity itself and the persons directly and/or indirectly holding at least 2/3 of the voting shares of this enterprise conform thereto.
10. A potential enterprise participant shall be recognised as conforming to national security interests provided he meets all of the following conditions:
1) meets the criteria of European and trans-Atlantic integration referred to in Article 8 of this Law;
2) does not hold a monopoly in supplying any type of the fossil energy resources imported by Lithuania, a person controlled by such a supplier or related thereto by co-operation or partnership;
3) does not maintain the relations with institutions of the foreign states not members of the European Union and the North Atlantic Treaty Organization or with persons of those states which might increase risk or pose a threat to national security;
4) there exist no data that a person may be related to organised criminal groups, special services or groups of foreign states relating to international terrorist organisations or maintaining relations with the persons suspected of membership thereof;
5) has not committed the serious and grave crimes indicated in the Special Part of the Criminal Code of the Republic of Lithuania or is not subject to proceedings in respect of commission of the mentioned crimes, also corresponding acts abroad;
11. Potential enterprise participants recognised by the Commission as not conforming to national security interests shall be subject to the restrictions specified by this Law for acquisition of shares of an enterprise of strategic or considerable importance to national security, investment in an enterprise of strategy importance to national security or in an enterprise to be established by it, participation in a project of development of an enterprise or facility of strategy importance to national security (acquisition of technologies, supply of important raw materials, performance of key development works, etc.).
[The Article shall enter into force on 1 October 2009]
Article 8. Criteria of Conformity of a Potential Enterprise Participant to European and trans-Atlantic Integration
The Commission shall assess conformity of a potential enterprise participant to the following criteria of European and trans-Atlantic integration:
1) the nature and experience of long-term operation in a relevant field in the European Union member states and member countries of NATO, also in other states of importance to the strengthening of Lithuania’s national security which develop security relations with the European Union member states and member countries of NATO;
2) actual intentions, possibilities and planned ways of making a direct contribution to Lithuania’s economic sector of importance to national security or enhanced integration of the energy system into trans-Atlantic and European markets;
Article 9. Safety of Enterprises and Facilities of Strategic or Considerable Importance to National Security
1. The Government or an institution authorised by it shall set forth requirements for the physical safety and information security of enterprises and facilities of strategic or considerable importance to national security taking account of peculiarities of the activity of the enterprises.
2. Heads of the enterprises and facilities of strategic or considerable importance to national security shall be responsible for implementation of the requirements of physical safety and information security provided for in paragraph 1 of this Article.
I promulgate this Law passed by the Seimas of the Republic of Lithuania.