ANTI-DUMPING LAW Official translation REPUBLIC OF LITHUANIA LAW ON THE AMENDMENT OF THE LAW ON CREDIT UNIONS 21 Februrary 1995 No I-796 Vilnius (new edition by 18 May 2000 No. VIII-1683, as amended by

this Article under which the amount of the member loan cannot exceed the tenfold amount of the member’s share contribution shall not apply to a member of the credit union where the loan is extended for the purpose of covering the person’s education-related expenses (studies at higher educational institutions, specialised schools, courses, etc.), and where the loan is secured by pledging a time deposit in the credit union.

A loan must be secured by at least one means of ensuring the performance of obligations provided for by the Civil Code of the Republic of Lithuania: pledge, mortgage, surety or guarantee.
A credit union may issue to its members short-term loans not demanding that the return thereof be secured by the means provided for in paragraph 4 of this Article, if a loan (loans) requested by a member and interest do not exceed an amount of his share in the credit union. A member shall be prohibited from disposing of the share or a part thereof, which is not less than the said loan or loan interest, until such loan and interest are paid off. Article
Deposit Insurance and other Guarantees of Deposit Security
Deposits in credit unions shall be insured in a compulsory manner according to the procedure established by the Law of the Republic of Lithuania on the Insurance of Deposits.
The guarantee of deposit security shall also be the membership of credit unions in the Central Credit Union which shall perform the functions of the supporting of liquidity and restoration of impaired solvency of its members - credit unions. Chapter 3 Establishment of a Credit Union Article
Establishment and Founders of a Credit Union
A credit union shall be established by forming funds for covering the expenses related to the establishment thereof from the paid amounts of one-time entrance fees and by accumulating share capital from the share contribution.
Founders of a credit union shall be natural persons or natural and legal persons who are establishing a credit union in accordance with the procedure established by this Law. A credit union may be established by no less than 5 natural persons of the Republic of Lithuania. Each founder of the credit union must at the same time also, be a member of the credit union which is being established.
The number of legal persons, specified in paragraph 1 of Article

this Law, who establish a credit union together with natural persons must be less than the number of natural persons who are founders of the said credit union.

The founders shall conclude a credit union founding agreement in which the following must be stated: 1) the founders (full names of natural persons, names of legal persons) and their addresses; 2) the name of the credit union; 3) the registered office of the credit union, which must be located in the Republic of Lithuania; 4) the rights and duties of the founders, while establishing the credit union and responsibility for failure to perform their obligations; 5) the amount of minimum share contribution in cash and the dates of payment thereof as well as, the procedure for the temporary use thereof during the establishment of the credit union; 6) the amount of admission fee, the procedure for the payment and use thereof; and 7) the procedure for settling disputes between the founders.
The founding agreement shall be signed by all the founders. The agreement must be certified by a notary.
The founding agreement, concluded in accordance with the procedure established by this Law, shall be a public document and shall grant the right to open a settlement account in a bank registered in the Republic of Lithuania.
The founders of a credit union shall draft the bylaws of the credit union and present them to the statutory meeting for approval. Prior to the statutory meeting the founders must record in the register of members persons who have contributed a share in the credit union which is being established.
Minimum share capital must be accumulated and shares of at least 50 persons must be paid up prior to the statutory meeting.
Prior to the statutory meeting, any founder shall have the right to conclude transactions regarding the credit union which is being established. Said transactions shall create obligations for the credit union after the approval thereof by the statutory meeting. In the event that the meeting refuses to approve the transactions, the founders who have concluded them shall be liable for the obligations arising from said transactions. On the recommendation of a founder the statutory meeting of the credit union may transfer to the credit union obligations created by a founder in his own name and reimburse the founders for their expenses related to the establishment of the credit union. Article
Statutory Meeting of the Credit Union
The founders of a credit union must call the statutory meeting no later than within 60 days of the day of approval of the founding agreement by the notary.
The statutory meeting shall: 1) consider and approve the bylaws of the credit union; 2) elect for the first term of office the managing bodies of the credit union and the auditor, but for no longer than the term of two financial-business years; 3) approve the statutory report; 4) approve the transactions concluded by the founders of the credit union; and 5) resolve other issues within the competence of the general meeting.
The statutory meeting must be attended by at least 2/3 of the persons registered in the register of members. The participation of the founders is mandatory.
The statutory meeting shall be presided over by one of the founders or the chairperson elected by the statutory meeting.
Minutes must be kept of the statutory meeting wherein the following must be specified: the number of persons taking part in the meeting, all the considered issues and the adopted resolutions. The minutes shall be signed by the chairperson, the secretary and one of the members, authorised by the meeting. A list of all members of the credit union which is being established must be attached to the minutes of the meeting.
The founders must, no later than within 7 days from the day of the statutory meeting, hand over to the elected Board the founding documents of the credit union and transfer all the acquired assets thereto.
If the founders of the credit union fail to convene the statutory meeting, within 60 days of the approval of the founding agreement by the notary, all the members shall be released from their obligations to the credit union and shall have the right to request that the founders return their contributions without deductions. Article
Statutory Report The founders of the credit union must prepare a statutory report and present it to the statutory meeting for approval. The following must be stated in the statutory report: 1) establishment costs; 2) the number of shares purchased and the amount of money received; 3) the amount of shares contributed by each founder; 4) transactions, the obligations under which are transferred to the credit union by the founders; and 5) the amount of remuneration paid out to cover the establishment costs. Article
Bylaws of a Credit Union
Bylaws are a legal document governing the activities of the credit union.
The bylaws must state: 1) the name of the credit union; 2) the registered address of the credit union; 3) the criteria of uniting into a credit union; 4) type of activities (operations performed, services rendered); 5) rights, duties and responsibilities of members; 6) the grounds and procedure for entrance of, withdrawal and expulsion from the credit union; 7) the minimum amount of share contribution which must be paid in by a member, the share payment procedure and the procedure for the transfer of shares into the ownership of other persons. The bylaws of the credit union may also fix the maximum amount of shares allowed to be contributed by one member; 8) the use of the assets of a credit union to acquire shares of the Central Credit Union; 9) the competence of the general meetings of members, the procedure for calling the meetings and their voting rules; 10) the procedure for electing the Supervisory Board, the Board, the Loans Committee, and the auditor and their respective powers; 11) the capital structure, ownership and formation (the amount of share capital is not specified); 12) the procedure of profit and loss approval, the procedure for the distribution of profit and compensation for losses; 13) the procedure for making up, inspecting and approving the accounts; 14) the procedure of the credit union reorganisation and liquidation; 15) the procedure for communicating the announcements of the credit union; and 16) information which is classified secret by the credit union.
The bylaws may also include other provisions regulating the activities of the credit union and determining property and other relations of the members as well as the relations between the credit union and third persons, provided that the above provisions are in compliance with this Law and other laws of the Republic of Lithuania.
The bylaws of a credit union must be approved by the statutory meeting of the members; they shall be amended and supplemented only by a general meeting. Article
Registration of Credit Union
Upon being issued the licence provided for in Article 16 of this Law, a credit union must be registered within 4 months of the day of the statutory meeting in accordance with the commercial bank registration procedure established by the laws and other legal acts of the Republic of Lithuania.
In the event that a credit union is not registered within the period specified in Par. 1 hereof, the credit union shall be deemed not established and the members’ contributions into the share capital thereof must be repaid without any deductions within 15 days of the expiry of the period set for registration.
If the credit union was not registered for reasons not related to the activities of the founders thereof or persons who have paid their share contributions into the share capital, the founders of the credit union may appeal in court against the refusal to register the credit union.
From the day of its registration, a credit union may engage in saving activities and in making member loans to its members. Article
Licence
A licence to perform operations of saving and making member loans, as well as to engage in other activities characteristic of credit unions shall be issued by a supervisory body in accordance with the procedure established by it.
In order to be issued a licence, a credit union must present to the supervisory body the following documents: 1) an application; 2) a notarised copy of founding documents; 3) documents confirming the payment by the members of the credit union of their initial share contributions; 4) information concerning the founders and members of the Supervisory Board and the Board of the credit union as requested by the supervisory body; 5) the bylaws; and 6) other documents requested by the supervisory body.
Refusal to issue a licence must be substantiated. The refusal may be appealed against in court in accordance with the procedure established by law of the Republic of Lithuania. Chapter 4 Membership in the Credit Union, Rights and Duties of Members Article
Members
The following natural persons may be members of a credit union: citizens of the Republic of Lithuania, stateless persons permanently residing in the Republic of Lithuania and citizens of other countries permanently residing in the Republic of Lithuania. Persons who are 18 years of age and over may be members of credit unions. The bylaws may provide for a possibility to admit as members persons who have attained 16 years of age, provided that they have an independent source of subsistence.
Along the natural persons specified in Par. 1 of this Article, the following legal persons may become members of a credit union: public organisations, organisations of trade unions, religious communities and associations, agricultural co-operatives registered in the Republic of Lithuania. The number of such members may not be bigger or equal to the number of members corresponding to the criteria established in Par.1 of this Article.
The following may be associate members of a credit union: 1) individual (personal) enterprises, economic partnerships, agricultural co-operatives, private companies, registered in the Republic of Lithuania by natural persons, the controlling block of shares whereof is possessed by a member of members of a credit union; 2) an enterprise specified in Subpar. 1 of this Paragraph, if an annual average of the number of its employees does not exceed 49; 3) natural persons who reside, work or study in the territory of the ward in which the headquarters of a credit union is located; 4) members of a credit union who do not correspond to the criteria of the membership of a credit union and the terms and conditions provided for in the bylaws.
An associate member must fulfil all the duties and obligations of a credit union member, and may make use of all the services rendered by a credit union and enjoy all the rights of a credit union member, except the right to vote, to be elected to the management and control bodies of a credit union. The bylaws of a credit union may set forth other restrictions on the rights of an associate member: to fix maximum deposit allowed to be accepted from one associate member, limited amount of share and (or) loan, regulated procedure for the repayment of a deposit and (or) a loan, and other.
The number of associate members in a credit union may not exceed the number of the members who correspond to the criteria of the membership established in Par. 1 and

this Article.

The minimum number of members of a credit union, associate members not including, shall be 50 members, the founders including. In the event that the minimum number of the credit union members is reduced by at least one, the credit union must receive a permission from the body supervising the activities of credit union for its activities continued until the required minimum number of members is restored. The supervisory body taking into account the liquidity of such credit union may either grant it permission to operate for no longer than 3 months, or prohibit such credit union from functioning.
New members may be admitted only upon the registration of the credit union in accordance with the procedure established by this Law.
Membership in the credit union shall be based upon the following criteria: 1) employment in the same enterprise, institution; 2) belonging to the same professional group; 3) belonging to a certain formal formation of people: organisation, including public and professional but excluding political parties; educational, ethnic, cultural, social or religious community or association, etc.; and 4) residing in the same location - township, the territory of a ward or another territorial structure established by a municipal council, if the territory of a ward is not defined.
Membership criteria (one or several) must be specified in the bylaws of a credit union. A person who corresponds to at least one of the criteria established in the bylaws, may become a credit union member. 10.. Family members of a credit union member or persons who either live together or keep house with him, may be admitted as members of the credit union without taking into consideration the criteria specified herein, unless the bylaws of the credit union provide otherwise.
Persons who wish to become members of a credit union must file with the Board of the credit union a written application. It must be stated in the application that he/she pledges to comply with the bylaws of the credit union, to pay the entrance fee, to pay in his/her share and to also perform the obligations of the credit union assumed by the credit union prior to his/her admission to membership.
A person shall become a member (an associate member) of the credit union only after the Board adopts a resolution to meet his application. Article
Registration of Members
Members must be registered in separate registers of members of a credit union and associate members of a credit union which are kept by the Board. The following information must be recorded in the registers: the member’s full name or the name of an enterprise, personal code number or the code of an enterprise, place of residence and address or the place of the registration of an enterprise, date of admission, payment of entrance fee and share contribution.
At the request of the supervisory body of the credit union activities, the Board must present the list of the credit union members. If the number of members of a credit union, associate members not including, becomes less than the minimum number prescribed in Par. 6 of Article 17 of this Law, the Board must notify the supervisory body thereof no later than within 10 days.
At the request of a member of the credit union, he may be issued a certificate confirming his membership in the credit union and the amount for his share. Article
Rights and Duties of a Credit Union Member
A credit union member shall have the right to: 1) attend meetings of the credit union and to have one vote during voting. This right shall not apply to associate members; 2) elect and be elected to the bodies of management and control of the credit union. This right shall not apply to associate members; 3) obtain information about the activities of the credit union, its financial-economic condition and assets or to request that he be presented for familiarisation or for copying the annual and intermediate accounts, reports of the Board concerning the activities of the credit union, minutes of the meetings, the register of members. Other documents may be presented to the member provided that they contain no secrets the divulging whereof would inflict material damage to the credit union. It shall be prohibited to refuse access to the information for other reasons. The refusal to present the required documents must be executed in writing if requested by the member. Disputes concerning the member’s right of access to information shall be settled in court; 4) appeal in court against the resolutions of the general meeting and the Board; 5) withdraw from the credit union; 6) receive the share of profit distributed among the members (in percentage terms) dividend in proportion to the amount of the member’s deposits in the credit union and received loans (circulation), which is paid out by bonuses or in other form specified in the bylaws of the credit union; 7) receive a portion of assets of the credit union in liquidation in proportion to the amount of his share; 8) bequeath his share to one or several persons; 9) with the consent of the Board transfer his share to the ownership of other persons in accordance with the procedure set forth in Subpar. 11 of Par.

Article 35

of this Law; 10) request that the credit union return his share or a portion of the share contributions in compliance with the restrictions established in Par. 5 of Article 9 ; and 11) make use of services provided by the credit union on easy terms established in the bylaws.

The credit union’s bylaws may also provide for other rights of members which are in compliance with the laws of the Republic of Lithuania.
A member of the credit union shall have no right to vote when the issue of his membership in the credit union is being decided at the general meeting and in other cases provided for in the bylaws when he has a direct interest.
A member of the credit union must: 1) contribute a share to the credit union, the amount whereof is not less than the amount required by this Law and the bylaws; 2) make timely notification, should the grounds for his membership in the credit union cease to exist; 3) pay the entrance fee, share contributions and other purpose-oriented contributions within the time limits and procedure specified in the bylaws; 4) act in compliance with the bylaws, fulfil the obligations of the credit union and implement the resolutions of its management and control bodies, participate in the activities of the credit union; and 5) duly and timely carry out loan agreements, agreements concerning the keeping of deposits with the credit union and other agreements concluded with him.
A member of the credit union may not at the same time be a member of another credit union, if this is prohibited in the bylaws.
Upon withdrawal or expulsion from the credit union, a member of the management and control bodies of the credit union may not continue to perform his functions in the above bodies. The withdrawing members who are employed in the credit union under the employment contract may refrain from terminating the employment contract, unless the bylaws provide otherwise. Article
Rescission of Membership and Termination of Membership
Membership of the credit union shall be rescinded in the following cases: 1) if the Board grants the member’s request to withdraw from the credit union; 2) upon the demise of a natural person or upon the reorganisation or liquidation of a legal person who enjoyed the rights of a member or associate member in he credit union; 3) upon recognising the member legally incapable in accordance with the procedure established by the laws of the Republic of Lithuania; 4) upon the member’s expulsion; and 5) when he becomes a member of another credit union, if the bylaws of the credit union prohibit membership of more than one credit union.
Membership of the credit union shall terminate upon the liquidation thereof. Article
Withdrawal from the Credit Union
Every member of the credit union shall have the right to withdraw from the credit union at their own will upon notifying the Board thereof in writing no later than 3 months in advance. Resolution concerning the withdrawal and settlement of accounts with the withdrawing member shall be adopted by the Board.
A member may withdraw only at the end of the business year. The Board may permit a member to withdraw before the end of business year, provided that accounts may be settled with the withdrawing member without causing damage to the interests of the credit union.
If the bylaws prescribe the residence of the members in the same locality - a township, a village, the territory of a ward or, if the territory of a ward is not defined, in another territorial structure established by the municipal council - as a condition of membership of the credit union, a member who is moving from that locality must notify the Board of his withdrawal in writing. Article
Expulsion from the Credit Union
If a member of the credit union fails to fulfil his obligations, violates this Law and the bylaws, he may be expelled from the credit union only on the decision of the general meeting. The Board may suspend the member’s rights until the general meeting at which the issue of his expulsion from the credit union is to be considered.
A member may be expelled provided that he has been given an opportunity to be heard at the general meeting and if 2/3 of the credit union members participating in the meeting vote in favour of his expulsion.
If the expelled member disagrees with the decision of the general meeting concerning his expulsion, he shall have the right to appeal to court for the revocation of such decision within 3 months of the day of passing of the decision. Article
Settlements with the Former Members of the Credit Union
The time period within which settlements must be made with the member who has withdrawn from the credit union or has been expelled from it shall be determined assessing the financial position and the state of assets (liquidity) of the credit union and upon deducting sums belonging to the credit union. Settlements must be made no later than within 12 months from the day of actual withdrawal or expulsion of the member of the credit union.
A person who has been expelled or has withdrawn from the credit union shall lose the right to make use on easy terms of the services provided by the credit union from the moment of his expulsion or withdrawal from the credit union.
The Board of the credit union, protecting the interests of the credit union and its members, must within 10 days from the day of the member’s withdrawal or expulsion, review all contracts for the provision of services by the credit union which have been concluded with him and, as necessary, rescind said contracts or, if the other party does not object, change the terms and conditions of the contracts.
Disputes concerning settlements between members shall be resolved in court.
Amounts due to a deceased member shall be paid out to his heirs in the same manner as in the cases of his withdrawal or expulsion, if the heirs are not members of that credit union and are not admitted as members thereof in accordance with the procedure established by this Law and the bylaws.
Amounts due to a person who has been recognised legally incapable shall be paid out to his lawful representative after the latter presents the required documents. Article
Proxies A member, except an associate member, shall have the right to authorise another person to vote for him at the meeting of members or perform other actions. At the meeting of members of the credit union the proxy may represent only one member of the credit union. The member’s proxy must be certified by a notary. A member of management or control bodies of the credit union may not be a proxy of the credit union member. Article
Responsibility of a Member of the Credit Union for the Damage Inflicted on the Credit Union
A member of the credit union shall be responsible for the damage inflicted on the credit union in accordance with the procedure established by the Civil Code of the Republic of Lithuania. Rescission of membership of the credit union shall not exempt from responsibility for the damage inflicted on the credit union.
A member of the credit union shall be responsible to the extent of his share contribution (his share of assets). The bylaws of the credit union may establish the member’s responsibility which would be as much as the fivefold amount of his share contribution (his share of assets). Chapter 5 Management of the Credit Union and Control of its Activities Article
Management Bodies
Bodies of management of the credit union shall be the general meeting, the Supervisory Board, the Board and the Loans Committee. Only those members of the credit union who are of age and representatives authorised by legal persons specified in Par.

Article 17may be members of the bodies of management.

The Loans Committee is a mandatory managing body of a credit union, which must be formed irrespective of the number of members of the credit union.
Upon the decision of the general meeting of the credit union, the Administration of the credit union may be formed in the credit union of hired personnel. In the event that the Administration is not formed the functions thereof shall be fulfilled by the Board of the credit union. Article
General Meeting
General meeting shall be the supreme managing body of the credit union.
It shall be within the exclusive competence of the general meeting to: 1) amend and supplement the bylaws of the credit union; 2) approve the statutory report of the credit union; 3) elect or remove from office members of the Supervisory Board, the Board, and the Loans Committee as well as the auditor, and from among them accordingly, chairpersons of the Supervisory Board, the Board and the Loans Committee; 4) adopt a decision to expel a member from the credit union; 5) consider complaints and proposals of the credit union members concerning the work of the Supervisory Board, the Board and the Loans Committee; 6) establish the minimum and maximum amount of share contribution to be paid by a member and the procedure of payment of share contributions; approve and change the amount of the entrance fee; 7) establish the special purpose of loans made to the members; 8) fix the auditor’s salary and annual payments (premiums) from profit to the members of the managing bodies; 9) establish the limit of funds that may be allotted as remuneration for the work of an accounts expert or independent auditor; 10) fix the amount and procedure of payment of wages for the personnel employed in the credit union on a contractual basis; 11) approve the annual estimate of expenditures based on the calculation of projected income; 12) approve the annual accounts, adopt a resolution concerning the procedure of the distribution of profit and compensation for losses; 13) determine the amount of the share capital, reserve capital and other required capital, decide to compensate with funds from the reserve capital for the losses which are related to the doubtful assets of the credit union; 14) approve of the signing of the founding agreement of the Central Credit Union or of the joining of the existing Central Credit Union; 15) adopt a resolution to reorganise or liquidate the credit union; 16) resolve the issue concerning adhesion of the credit union to the association of credit unions and withdrawal from it; 17) evaluate the reports of the bodies of management and control of the credit union; 18) during the meeting, if requested by the Supervisory Board, resolve issues within the competence of the Supervisory Board; and 19) resolve other issues reserved for the competence of the general meeting by the bylaws. Article
Grounds for Calling the General Meeting
General meetings shall be called by the Board of the credit union.
The right of initiative to call an extraordinary general meeting shall belong to the Supervisory Board, the Board, the Loans Committee and a group of no less than 1/4 of the members of the credit union, associate members not including. An extraordinary general meeting must be called if: 1) it is planned to reorganise or liquidate the credit union; 2) the credit union is not in the position to satisfy its financial liabilities or is declared insolvent; 3) it is requested by the members of the credit union who have the right of initiative, or the Supervisory Board, or the Board, or the Loans Committee; 4) on the occurrence of the event provided for in Par. 3 of Article 34 of this Law; and 5) a decision of the court to call a meeting of the members comes into effect.
The general meeting of the credit union members may be called on the decision of the court if: 1) a regular general meeting has not been called within 3 months of the end of the business year and a member (members) of the credit union appealed to court for this reason; 2) the initiators of an extraordinary general meeting appeal to court upon the failure of the Board to call such a meeting within the time period set out in Par. 1 of Article 30 of this Law; and 3) creditors appeal to court if a special meeting is not called in the cases provided for in Subpar.

Par. 2 hereof. Article

Quorum of the General Meeting and Adoption of Resolutions
The general meeting may adopt resolutions if it is attended by more than 1/

all the members of the credit union. If the meeting does not have a quorum, a repeat meeting must be called, which shall have the right to adopt resolutions on all the issues on the agenda even without the quorum.

The members of the credit union (or their proxies) attending the general meeting shall be registered by signing in the register list which shall be signed by the presiding officer and the secretary of the meeting. Head of the Administration who is not a member of the credit union may attend the meeting with the right of deliberative vote. A member of the credit union who is not attending the general meeting but who has familiarised himself with the agenda and the draft resolution may inform the general meeting in writing whether he is “for” or “against” it. Such communications shall be included in the quorum of the meeting and added to the voting results, but only of that issue on which the member voted in writing.
Voting at the general meeting shall be open. Secret voting shall be held provided 1/4 of the members of the credit union attending the meeting so request.
Resolutions of the general meeting of the credit unions shall be adopted by a simple majority vote. In the event of a tie vote, the presiding officer shall have a casting vote. In cases specified in Subpar. 1, 4, 6, 7, 14 and 15 of Par.

Article 27

of this Law, the adoption of resolutions shall require 2/3 of votes of those attending the meeting.

The minutes of the general meeting shall be signed by the presiding officer, the secretary and at least one member of the credit union authorised by the general meeting. The list of members attending the meeting must be attached to the minutes and if the voting was in writing, the ballot papers must be attached as well, and kept till the end of the next general meeting. Article
Procedure and Time Limits for Convening of General Meetings
A regular general meeting shall be convened by the Board of the credit union every year, but no later than within 3 months after the close of a business year. The Board must notify about the general meeting according to the procedure established by the bylaws of the credit union and at least 20 days in advance of the date on which the meeting is to be held.
The persons who request that an extraordinary meeting be called, shall submit an application to the Board, indicating the reasons and objectives for calling such a meeting and a draft agenda thereof. Upon receipt of an application, the Board must, within 10 days from the submission of the application, notify the members of the credit union about the calling of an extraordinary general meeting and no later than within 20 days of the announcement thereof, convene said meeting.
A repeat general meeting of the members of the credit union must be called within 10 days of the day of the meeting which failed to be convened and the members of the credit union must be notified thereof at least 5 days in advance of the repeat meeting.
A general meeting may be called without observing the above time requirements, provided that all the members of the credit union give their consent thereto.
The notice about the general meeting must specify: 1) the name and address of the credit union; 2) the place, date and time of the meeting; and 3) the agenda of the meeting and draft resolutions.
The members of the credit union must be given the opportunity to familiarise themselves with the documents concerning the agenda of the meeting at least 5 days prior to the meeting.
The chairperson of the general meeting shall be elected each time, from the members of the credit union, and until his election, the meeting shall be presided over by the chairperson of the Supervisory Board unless the bylaws of the credit union provide otherwise.
The general meeting shall have no right to pass resolutions on issues which are not on the agenda, if the meeting is not attended by all the members of the credit union. Only the agenda of a meeting which failed to take place shall be valid at the repeat meeting. Article
Invalidity of Resolutions of General Meeting Members
Per declaration of credit union members or head of the Administration, the resolutions of the general meeting may, according to the procedure prescribed by court, be declared invalid, should they contradict this Law, the credit union bylaws and other Republic of Lithuania laws.
A resolution of the general meeting may be appealed against to the court no later than 30 days within the date of the adoption of the resolution or from the day when the person learned or was to learn of the adoption of the resolution. Article
The Supervisory Board
The Supervisory Board is the body supervising the legality and expediency of the activities of the credit union.
The number of the members of the Supervisory Board, which may not be less than 3 and no more than 9, shall be prescribed by the bylaws of the credit union. The Supervisory Board and its Chairperson shall be elected by the general meeting for a term not to exceed 3 years.
A member of the Board of the credit union, a member of the Loans Committee or an auditor may not be members of the Supervisory Board. A member of the Supervisory Board may not assign or delegate his functions to other persons. Article
The Powers of the Supervisory Board
The Supervisory Board shall: 1) monitor how the Loans Committee, the Board and/or the Administration implement the resolutions of the general meeting; 2) analyse the activities of the credit union, its Board and the Loans Committee, the accumulation and utilisation of financial resources, remuneration for work, and financial condition; 3) present to the general meeting the report on the work done by the management bodies, along with its findings and proposals; 4) warn the Board of the credit union, Loans Committee and (or) the Administration that they should immediately eliminate violations of activities in the credit union, or notify the general meeting thereof; it may also propose to, prior to the expiry of the term of office, the general meeting to terminate the powers of the members of the Board and the Loans Committee who, in the opinion of the Supervisory Board, have violated this Law, other legal acts, the bylaws of the credit union or other rules thereof; 5) present to the general meeting their findings and proposals concerning the annual accounting balance sheet of the credit union, the draft distribution of profit and compensation for losses; 6) represent the credit union in court proceedings when disputes between the credit union and its Board, members of the credit union and its Board are settled; 7) submit proposals to the Board to revoke unlawful resolutions adopted by it or request that the general meeting should revoke unlawful resolutions adopted by the Board; 8) may refer issues that are within their competence to the general meeting for resolution; and 9) resolve other issues provided for in the bylaws.
The Supervisory Board shall have the right to invite an expert or an independent auditor to inspect and assess the accounting balance sheet of the credit union and other accounts.
On the request of the Supervisory Board, the Board of the credit union and /or the Administration must present documents concerning the activities of the credit union.
The meeting of the Supervisory Board shall be lawful, if it is attended by more than half of its members. The resolutions shall be adopted by a simple majority vote of those present. The members of the Supervisory Board shall have equal rights. During voting, each member shall have one vote. In the event of a tie vote, the chairperson shall have the casting vote.
The members of the Supervisory Board must keep the secrets of the credit union confidential.
The Supervisory Board shall work according to the procedure established by its work regulations. Article
The Board of the Credit Union
The Board is a collegiate executive-managing body of the credit union the activities of which are directed by its chairperson. The number of the Board members, which must be odd and at least 3, shall be established by the bylaws of the credit union. The members of the credit union and its chairperson shall be elected by the general meeting of the credit union for the term not exceeding 3 years. Members of the Supervisory Board of the credit union, members of the Loans Committee or the auditor may not be a member of the Board or its chairperson.
In addition to the main members of the Board, no more than 3 candidates to the Board members may be elected for the same term, who, upon the decrease of the number of the Board members, shall replace the Board members who may not serve in the office. These candidates shall have the right to attend the Board meetings with the deliberative vote.
If the number of the members of the Board becomes less than the minimum number of members established by the bylaws and there is no possibility to replace the lacking members of the Board with the elected candidates, the remaining members of the Board must convene an extraordinary meeting. Article
Powers of the Board
The powers of the Board and its members shall be established by the bylaws of the credit union, and the procedure of its work by the work regulations adopted by it.
The Board shall: 1) admit new members into the credit union, suspend their membership in the credit union in cases specified in Par.1 of Article 22 of this Law; 2) represent the credit union in court, arbitration bodies and other institutions; 3) organise and convene general meetings; 4) draw up and submit to the general meeting the annual estimate of expenditures based on the calculation of projected income; 5) set interest rate on deposits and on loans; 6) enter into employment contracts with hired employees in the name of the credit union; 7) enter into civil transactions with the members of the credit union and third parties in the name of the credit union; 8) maintain the registers of members of the credit union; 9) consider the material submitted by the auditor, the activities of the Administration ( if there is such) and present its findings to the Supervisory Board or the general meeting; 10) prepare drafts of accounting balance sheet, distribution of profit, procedure for the compensation for losses and other drafts of accounts; 11) consider the applications of the members of the credit union, concerning the transfer of their shares and shall notify said member about the consent or prohibition to transfer his share to another person no later than within 1 month from the receipt of the application; 12) invest the funds of the credit union, which are not immediately required, into the securities issued by the government, if it is permitted under the bylaws; 13) before the credit union joins the Central Credit Union, lend the funds of the credit union, which are not immediately required, to other credit unions which are not the members of the Central Credit Union, or to the Association of Credit Unions as well as borrow money from them, if it is permitted under the bylaws; 14) adopt decisions concerning the lending to other credit unions or getting loans from other credit unions in accordance with the procedure and on conditions established by the Central Credit Union; 15) settle accounts with the former members of the credit union on terms and conditions specified in Article 23 of this Law; 16) inform, in due time, the supervisory body of the activities of credit unions about the reduction of the minimum number of the members or the share capital and submit other data required by this body according to the rules of the supervision of the activities of credit unions, approved by the supervisory body; and 17) consider other issues concerning the activities and management of the credit union that are not within the exclusive competence of the general meeting, the Supervisory Board or Loans Committee.
The Board shall adopt resolutions on issues assigned to its competence by this Law or bylaws. A meeting of the Board shall be deemed lawful when more than half of its members attend such meeting. Members of the Board shall have equal voting rights. Resolutions shall be adopted by a simple majority vote of those present at the meeting. In the event of a tie vote, the chairperson of the Board shall have a casting vote.
Members of the Board and candidates to the members of the Board must keep the secrets of the credit union confidential.
The Board shall account for its activities to the general meeting in a manner prescribed by the bylaws of the credit union, at least once a year. The Board shall also report on its activities to the Supervisory Board which shall present its findings and proposals to the general meetings. Article
Loans Committee
The Loans Committee shall be elected by the general meeting from at least three members of the credit union for the term of three years. A member of the Supervisory Board of the credit union, the Board or the auditor may not be a member of the Loans Committee.
The Loans Committee shall consider the applications of the members of the credit union concerning member loans. It shall decide whether the loan requested by the member is in compliance with the purposes set out in the bylaws, shall provide for the terms and conditions of its disbursement and repayment and shall submit proposals concerning these issues to the Board of the credit union. The Board may not conclude member loan contract with a member of the credit union, if it was not approved by the Loans Committee.
For its activities the Loans Committee shall account to the general meeting in the manner prescribed by the bylaws, but at least once a year.
Members of Loans Committee must keep the secrets of the credit union confidential. Article
Responsibility of the Members of the Supervisory Board, the Board and the Loans Committee
For the damage caused to the members of the credit union, the members of the Supervisory Board, the Board and the Loans Committee shall be held liable under the laws of the Republic of Lithuania.
Only those members of the Supervisory Board, the Board and Loans Committee shall be released from the obligation to compensate for the losses, who voted against the resolutions that are not in compliance with this Law, the bylaws of the credit union or other laws of the Republic of Lithuania, or did not attend the meeting at which such resolutions were passed. In this event, they must present a written protest to the presiding officer within 7 days after they learnt or ought to have learnt about such resolutions. Article
Auditor of the Credit Union
The credit union must have at least one auditor who shall be elected by the general meeting for a term set out in the bylaws of the credit union but not exceeding three years. The auditor’s office may be held by a member of the credit union possessing a diploma certifying his proper qualifications. A member of the Supervisory Board, the Board and Loans Committee or a chief financier (accountant) employed in the credit union may not be the auditor.
If it is not possible to elect the auditor from the members of the credit union, the general meeting shall approve the independent auditor, which the Supervisory Board recommends to hire under contract.
The auditor (independent auditor) shall control the financial-business activities of the credit union, and the implementation of the resolutions passed by the general meeting. For the carrying-out of these functions, the auditor shall have the right to demand to present to him all necessary accounting records and financial documents.
The auditor of the credit union (independent auditor) shall present to the general meeting annual report on the audit of financial-business activities. He must immediately report to the Board and the Supervisory Board the violations determined in the financial-business activities of the credit union, and keep the secrets of the credit union confidential.
The elected auditor may be paid remuneration.
The auditor of the credit union (independent auditor) shall be liable under and in accordance with the laws of the Republic of Lithuania for the unsatisfactory control of the credit union and the concealment of deficiencies in its activities. Article
The Administration
When necessary, the Board of the credit union shall form the Administration of a credit union, comprising the head of the Administration and the chief financier (accountant) as well as other employees exercising management functions.
The Administration of the credit union shall carry out resolutions of the general meeting and the Board.
The duties of the Administration of the credit union shall be established by the bylaws of the credit union and the working rules approved by the Board.
The Board of the credit union shall accept persons for the positions of head of the Administration and the chief financier (accountant) of the credit union.
The head of the Administration of the credit union may not occupy a position of a chief financier (accountant), as well as any other position in the administration of another credit union or bank.
The head of the Administration of the credit union shall conclude employment contracts with other employees of the credit union.
The chairperson of the Board of the credit union or another member of the Board may hold a position of head of the Administration of the credit union. Chapter 6 Capital of the Credit Union, Member’s Share, Income and Expenditure, Financial Accounting and Control Article
Capital Structure of the Credit Union
The credit union’s ownership capital shall consist of the share capital, reserves and supplementary capital. Article
Share Capital of the Credit Union
The credit union’s minimum share capital may not be less than Lt
If the share capital is less, the body supervising the credit union may cancel the licence issued to the credit union.
The share capital of the credit union shall be formed out of the cash contributions of the founders and members of the credit union, paid for their shares.
Share capital shall be formed taking into account the necessity of funds which the credit union decides to invest into the credit union’s assets - premises, equipment and stock necessary for the commencement and development of the credit union’s activities, as well as for the acquisition of shares of the Central Credit Union.
It shall be prohibited to form the share capital of the credit union from the funds borrowed by the credit union or the property mortgaged to it. Article
Reserves of the Credit Union
The credit union shall form reserves which shall be used for covering the losses resulting from the activities of the credit union.
The reserves shall be formed out of the profit of the credit union, which remains after the payment of taxes, having deducted from this profit at least 20 percent annually, until the reserves shall account for 10 percent of the amount of long-term investments and extended loans, determined on the basis of the annual accounting balance-sheet.
When a part of the reserves has been used for covering losses of the credit union, it shall be again deducted from the profit so that the reserves would be in the established amount.
Losses related to doubtful assets - loans and long-term investments - shall be attributed to the losses which may be covered out of the reserves. Reserves may be applied for covering other losses only by the resolution of the general meeting. Article
The Share of a Member of the Credit Union
A share of the credit union member may only be the cash contribution.
The procedure of the payment of a share and responsibility for violations of such payment shall be set out in the bylaws of the credit union.
The minimum amount of a share of a credit union member - natural person shall be Lt 100, but the minimum amount of a share of a credit union member - legal person shall be Lt
Credit union bylaws may set a bigger amount of a minimum share. If the share of a credit union member falls below the established minimum amount, the Board must warn the member about this fact and to set time limits for the increase of his share up to the established minimum amount. If the member fails to comply with the said request, the Board shall propose to the general meeting to expel such member from the credit union.
If a credit union member wishes to get back the part of the share the disposal whereof is not restricted by this Law and credit union bylaws, he shall submit an application to the Board. Upon the assessment of the financial position and the state of assets (liquidity) of the credit union, the Board shall set time limits within which such application must be granted. The said time limits may not exceed 12 months starting from the date of the adoption of an appropriate decision of the Board.
It shall be prohibited to take recourse upon the member’s contributions which are the ownership of the credit union, with the exception of cases where the debtor ceases to be a member of the credit union. Article
Distribution of Profit
The profit of the credit union shall consist of the funds which remain after deduction of credit union’s expenses and losses of the year from the annual income of the credit union of the same year.
The profit must be distributed no later than within 3 months after the close of the financial year and following the approval of the annual balance sheet in accordance with this and other laws of the Republic of Lithuania.
The resolution on the distribution of profit must state: 1) the amount of profit; 2) taxes; 3) allocations to the reserves; 4) allocations to other types of capital of the credit union intended for the buying-out of additional shares possessed by the Government or an institution authorised by it in the credit union or for the implementation of long-term programmes of the credit union; 5) the share of profit (in percentage terms) allocated to the members of the credit union (shareholding members) dividend in proportion to the amount of the member’s deposits in the credit union and received loans (circulation). This share of profit shall be paid out by bonuses or in other form specified in the bylaws of the credit union; 6) bonuses to the members of the managing bodies and heads thereof; and 7) retained profit.
Bonuses to the members of the credit union shall be paid from the profit which remains after the payment of taxes and after the deduction of funds to the reserves and other types of capital provided for in the bylaws.
The profit which remains after the allocations to the capital of the credit union may not be paid out in the form of bonuses or transferred to the members of the credit union, founders or members of the managing bodies in any other manner, if the share capital of the credit union becomes less than the fixed minimum capital prescribed by this Law. Article
Accounting, Reporting and Control of the Credit Union
The financial year of the credit union shall coincide with the calendar year. If the credit union has been registered after the commencement of the business year, then the last day of the calendar year shall be considered as the end of the first business year. If the credit union has been removed from the register before the close of the business year, then the last business year shall end on the day the credit union was removed from the register.
Accounting, reporting and financial control shall be carried out in accordance with the laws of the Republic of Lithuania and legal acts approved by resolutions of the supervisory body.
Within three months after the close of the financial year, the credit union shall prepare annual financial statement of the credit union and submit it to the supervisory body. Article
Standards Restricting the Risk of Credit Union’s Activities The supervisory body may establish the following standards for credit unions, restricting the risk of activities: 1) liquidity ratio; 2) maximum open position in foreign exchange; and 3) capital adequacy ratio. Chapter 7 Supervision of the Activities of Credit Unions Article
Control of the Activities of Credit Unions and Application of Sanctions
The supervisory body of the activities of credit unions shall have the right to apply the following sanctions against the credit union and its managers for the violation of this and other laws and legal acts, regulating the activities of credit unions: 1) to warn the credit union for the shortcomings and violations and to set the term for their elimination; 2) to impose administrative penalties on the managers of the credit union for the violation of this Law in the manner prescribed by the laws; 3) to demand removal from the office of the chairman of the Board of the credit union, its member (members) or head of the Administration and election of a new Board chairman, its member (members) or appointment a new head of the Administration; 4) to suspend the powers of the Supervisory Board of the credit union, to dismiss the Board of the credit union, to remove head of the Administration from the office and to appoint a temporary Administrator of the credit union; 5) to suspend or revoke the licence to perform one or several operations of the credit union; and 6) to suspend or revoke the licence issued to the credit union to engage in the activities specified in Article 7 of this Law.
The type of sanction and the terms shall be determined by the supervisory body, taking into consideration the nature of the violation, its possible consequences for the credit union, as well as the consequences of the planned sanction for the reliability and stability of the credit union.
The resolution concerning the application of a sanction, with the exception of the sanction specified in Subpar.

Par. 1 of this Article, must be adopted within 3 months from the date of the establishment of a violation. Sanctions may not be applied against the violations when more than one year has elapsed since the date of the carrying-out of such violations.

The resolution of the supervision institution concerning the application of a sanction against the credit union or its managers may be appealed against in court within one month from the date of the adoption of said resolution in accordance with the procedure established by the laws of the Republic of Lithuania.
The Central Credit Union shall additionally control permanent activities of the credit unions - members of the Central Credit Union, and when necessary, shall check it, assess the risk of activities and submit recommendations to the supervisory body regarding the application of sanctions against those credit unions. 6.Sanctions laid down in Par. 1 of this Article shall be applied by the supervisory body collegially in the presence of at least one of the following grounds: 1) incorrect information has been furnished to the supervisory body; 2) information or documents necessary for the carrying-out of the supervision of the credit union has not been presented to the supervisory body; 3) set standards have not been complied with; and 4) laws or other legal acts of the Republic of Lithuania have been violated.
The supervisory body shall adopt a resolution to apply sanctions specified in Par. 1 of this Article, on the following basis: 1) documents and information confirming the violation of laws, other legal acts or standards; 2) the analysis of the economic condition of the credit union; 3) the material pertaining to previously established violations and sanctions applied against the credit union by the supervisory body and other institutions; and 4) explanations of heads of the Board or the Administration of the credit union. Chapter 8 Reorganisation and Liquidation of the Credit Union Article
Reorganisation of the Credit Union
Reorganisation means the restructuring of the credit union as a legal entity, without liquidation procedures. The credit union (or unions), newly established in the process of reorganisation and continuing their activities after the reorganisation, shall be the successors to all the rights and obligations of the reorganised credit union.
Credit unions may be reorganised in the following ways: 1) by merger or consolidation of credit unions; 2) by division of credit unions. 3.The reorganisation of the credit unions by merger or consolidation shall be carried out by: 1) joining to the credit union, which continues its activities, of other credit unions which terminate their activities as legal entities; 2) merging several credit unions which terminate their activities as legal entities to form a new credit union.
The credit unions shall merge in the manner prescribed by the Law on Competition of the Republic of Lithuania. 5.The reorganisation of credit unions by way of division shall be carried out by: 1) conveying the rights and obligations of the credit union which terminates its activities, to the credit unions which continue their activities; 2) by establishing new credit unions from the credit union which terminates its activities; 3) by separating a part from the credit union which continues its activities and merging this part with the other credit union, or from which a new credit union is being established.
The credit unions that are being reorganised must prepare reorganisation plans which must state: 1) name and address of each credit union which is being reorganised; 2) the number of its members; 3) its share capital; 4) valuation of its deposits, extended loans and assets; 5) terms and conditions of the assumption of liabilities; 6) the criteria and rules for the management of shares of members in the credit unions which will operate after the reorganisation; 7) criteria according to which the deposits of members and loans extended to members before and after the reorganisation shall be managed; 8) other property and non-property rights and obligations of the members after the reorganisation of the credit union, the terms for the acquisition of these rights and obligations; and 9) the rights accorded to the managing bodies and auditors (experts) of the credit unions during the period of their reorganisation.
The bylaws of each credit union that will be operating after the reorganisation must be also prepared alongside with the reorganisation plan.
The Board of each credit union which is being reorganised shall prepare reorganisation plan for the evaluation of which an independent auditor (expert) may be invited. He must present in writing, the valuation and his conclusions to the general meeting.
Each credit union must make a public announcement of the planned reorganisation no later than 20 days before the date on which the general meeting is to be held, at which the reorganisation shall be considered. During this period, each member of the credit union shall be entitled to familiarise himself with the reorganisation plan and the evaluation thereof.
The resolution to reorganise the credit union may be passed and concurrently the reorganisation plan and the bylaws may be approved by at least 2/3 of all the votes of the members of the credit union which is being reorganised. The resolution of the general meeting concerning the refusal to reorganise the credit union may be appealed against in court by no less than 1/5 of its members.
The reorganisation of the credit union in the event of bankruptcy thereof means the restructuring of the credit union, in which case the appointed administrator splits up the credit union, or sells a part of the assets thereof to other credit unions, in order to ensure the solvency of the credit union and its ability to satisfy the creditor’s claims. In the event of bankruptcy, the credit union must be reorganised in the manner prescribed by the Law on Enterprise Bankruptcy of the Republic of Lithuania and other laws and legal acts regulating bank bankruptcy procedure.
Each member of the credit union and its creditor must be given a written notice about the reorganisation of the credit union.
The bylaws of the credit union that will operate after the reorganisation shall be registered after the first general meeting. Credit unions which are planned to be reorganised shall be legalised, licensed and registered in accordance with Articles 14, 15, and 16 of this Law.
Upon the reorganisation of the credit union, its assets shall be conveyed to: 1) in the event of merger or division - newly formed credit union; 2) in the event of joining one credit union to the other - to the latter.
The conveyance of assets shall become effective as of the date of signing the conveyance instruments, unless reorganisation documents provide otherwise. Article
Liquidation of the Credit Union The credit union may be liquidated on the following grounds: 1) time of the duration of the activities of the credit union, as set in its bylaws, has expired; 2) the minimum number of its members, specified in Par. 6 of Article 17 of this Law, has decreased to the extent that the supervisory body prohibits it to continue operation with such membership; 3) the share capital has decreased below the minimum level set out in Par.1 of Article 41 of this Law and it has not been re-established by the time limit fixed by the supervision institution; 4) the Registrar of the Register of Enterprises has adopted the decision to cancel the registration of the credit union; 5) the court’s decision to liquidate the bankrupt credit union has come into effect; 6) the court has passed the decision to liquidate the credit union for violation of the laws of the Republic of Lithuania; and 7) the general meeting has passed the resolution to liquidate the credit union, provided no bankruptcy proceedings have been instituted against the credit union.
Having decided to liquidate the credit union, the liquidator shall be appointed on the recommendation of the supervisory body. The managing bodies of the credit union shall lose their powers as of the date of the appointment of a liquidator, who shall discharge their functions.
The liquidator shall notify the institution which has registered the credit union and shall notify the Registrar of the Register of Enterprises about the change in the status of the credit union and about the liquidator. After the credit union acquires the status of a credit union in liquidation, the words “in liquidation” shall precede its name.
The credit union in liquidation may conclude such transactions that are associated with its liquidation, as well as transactions which are provided for in the liquidation resolution.
The liquidation of the credit union shall be announced publicly, at least 3 times at no shorter than 2-month intervals, or each member and creditor shall be personally notified thereof.
The liquidation procedure of the credit union shall be carried out in accordance with the laws of the Republic of Lithuania and other legal acts, regulating bank liquidation. Article
Bankruptcy Procedure of the Credit Union Institution of bankruptcy proceedings, its investigation in court and liquidation by reason of bankruptcy shall be carried out in accordance with the procedure established by the Law on Commercial Banks of the Republic of Lithuania. Chapter 9 Final Provisions Article
Tax Allowances Tax allowances shall apply to credit unions in accordance with the laws of the Republic of Lithuania and other legal acts regulating taxation. Article
Supervision of the Activities of Credit Unions The activities of all credit unions registered in the Republic of Lithuania, shall be supervised and licenses issued by the Bank of Lithuania until a separate supervisory body of the activities of credit unions is created and its bylaws approved. Article
Amendment of Bylaws of Credit Unions and Reorganisation of the Activities
Credit unions must harmonise their bylaws with the provisions of this Law not later than within one year from the day of the coming into force of this Law.
Provisions of the bylaws of the credit unions registered prior to the coming into force of this Law shall have effect inasmuch as they are in compliance with the provisions of this Law.
Credit unions must implement all mutual obligations of credit unions within 6 months from the day of joining the Central Credit Union.” Article
Declaration of the Legal Act Invalid The Law of the Republic of Lithuania on Credit Unions shall cease to have effect. I promulgate this Law passed by the Seimas of the Republic of Lithuania. President of the Republic VALDAS ADAMKUS

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