GOVERNMENT OF THE REPUBLIC OF LITHUANIA

GOVERNMENT OF THE REPUBLIC OF LITHUANIA Official translation GOVERNMENT OF THE REPUBLIC OF LITHUANIA RESOLUTION No 1456 ON THE APPROVAL OF THE REGULATIONS ON FINANCIAL GUARANTEES applicable to Tour ORGANISING SERVICES 22 December 1999 Vilnius The Government of the Republic of Lithuania, acting pursuant to Article 3 of the Law on Tourism of the Republic of Lithuania (Official Gazette No 32-852, 1998), hereby r e s o l v e s:

1. To approve the Regulations on Financial Guarantees Applicable to Tour Organising Services (attached hereto). Prime Minister Andrius Kubilius Minister of Justice, acting as Minister of Public Administration Reforms and Local Authorities Gintaras Balčiūnas APPROVED by Resolution No 1456 of 22 December 1999 of the Government of the Republic of Lithuania REGULATIONS ON FINANCIAL GUARANTEES APPLICABLE TO TOUR ORGANISING SERVICES I. GENERAL PROVISIONS
2. These Regulations shall fix the amount of financial guarantees with regard to tour organising services, granted by a bank or insurance company to enterprises of the Republic of Lithuania offering tour organising services in accordance with the procedure prescribed by laws, and establish the procedure for the application and control of such financial guarantees.
3. The compensation of tourists for damage incurred as a result of the quality of the services rendered by the enterprise shall be excluded from the scope of these Regulations.
4. For the purposes of these Regulations the following definitions shall apply: 3.
5. “tour organising service” means activity covering the acquisition and sale of tourist services required for the tour, the arranging, advertising and sale of package tours and the provision of additional services relating to the organisation of the tour; 3.
6. “agencies” means tourist agencies and travel agencies and well as their branches and subdivisions. Tourist agencies means enterprises providing tour organising services, organising and selling tours for tourists, whereas travel agencies means enterprises acting as intermediaries between the direct provider of tourist services (tourist agency) and the tourist. 3.
7. “tourist service” means activity linked to the satisfaction of tourists’ needs (services pertaining to the organisation of the tour, transport, accommodation, catering, information or special services); 3.
8. “package tour” means the prearranged combination of not fewer than 2 tourist services, including transport and/ or accommodation, offered for sale at an inclusive price, where the service covers a period of more than twenty-four hours; 3.
9. “tour contract” means a written agreement that binds the provider of tourist services to provide to the consumer specific tourist services agreed under mutual conditions and the consumer to pay for the said services; 3.6 “consumer of tour organising services” means the person who has purchased or purchases the package tour and who has concluded the tour contract (the principal contractor ) or any other person on whose behalf the principal contractor purchases the package tour, i.e. the person indicated in the contract ( the other beneficiary), or any other person to whom the principal contractor or any of the other beneficiaries transfers the tour package (hereinafter referred to as the tourists of the agency); 3.
10. “domestic tourism” means activity of agencies relating to the organisation of tours for the Lithuanian residents within their own country; 3.
11. “outbound tourism” means activity of agencies relating to the organisation of tours for the Lithuanian residents abroad; 3.
12. “guaranteed receipts from domestic tourism” means maximum quarterly receipts of the agency from domestic tourism under the tour contracts; 3.
13. “guaranteed receipts from outbound tourism” means maximum quarterly receipts of the agency from outbound tourism under the tour contracts.
14. The interests of consumers of tour organising services shall be represented, pursuant the procedure prescribed by these Regulations, by the public authority authorised by the Government of the Republic of Lithuania, which has been vested with powers of monitoring compliance with the Law on Consumer Protection of the Republic of Lithuania (hereinafter referred to as the consumer protection institution). II. FINANCIAL GUARANTEES AND THEIR TYPES
15. A financial guarantee means a guarantee extended by a bank or insurance company guaranteeing the would-be tourists of the agency the discharge of the obligations undertaken by the agency for which the tourists have contracted, in case of failure by the agency to meet part or all of its obligations as a result of the following: 5.
16. the registration of the enterprise is cancelled on decision by public bodies; 5.
17. the agency is withdrawn the certificate to provide tour organising services according the Regulations for the Provisions of Tour Organising Services, adopted by an order of director of the State Tourism Department under the Ministry of Public Administration Reforms and Local Authorities (hereinafter referred to as the State Tourism Department); 5.3 the agency becomes insolvent; 5.
18. the agency bankruptcy proceedings are initiated or extra-judicial bankruptcy procedures are applied; 5.
19. on failure by the agency which has entered into the tour contract to perform the tour organising services for the tourist or on failure to refund the money paid.
20. The following types of financial guarantees shall apply: 6.
21. a bank guarantee – a guarantee letter; 6.
22. a guarantee of the insurance company – an insurance cover that binds the insurance company to ensure the tourists of the agency the fulfilment of the contractual obligations undertaken by the agency in accordance with the procedure prescribed by these Regulations.
23. The type of financial guarantees shall be chosen at the discretion of the agency. III. THE AMOUNT OF FINANCIAL GUARANTEES
24. The amount of financial guarantees in respect of domestic and outbound tourism shall not be the same. The amount shall be fixed with regard to the agency’s maximum quarterly receipts (calculated on the basis of at least two, however not more than four last quarters) or planned receipts according the business plan: 8.
25. the amount of financial guarantees in respect of domestic tourism – 2 per cent of the guaranteed receipts from domestic tourism, however no less than 20 000 litas; 8.
26. the amount of financial guarantees in respect of outbound tourism shall be fixed in calculating the percentage of the guaranteed receipts from outbound tourism in accordance with the following table (the said amount shall not, however, be less than 50 000 litas): The total amount of guaranteed receipts from outbound tourism, in thousand litas Percentage The amount of financial guarantees, in thousand litas from to no less than to 0 1000 50 50 1001 1500 5 55 75 1501 2000 4.5 75 90 2001 2500 4 90 100 2501 5000 2.5 100 125 5001 10000 2.4 125 240 10001 … 2 240 …
27. The amount of financial guarantees in respect of newly-formed agencies shall be established on the basis of the intended maximum quarterly receipts of the agency in the following operational years: 9.
28. in respect of domestic tourism – 5 per cent of the intended guaranteed receipts from domestic tourism, however no less than 20 000 litas; 9.
29. in respect of outbound tourism – 10 per cent of the intended guaranteed receipts from outbound tourism, however no less than 50 000 litas.
30. The amount of financial guarantees in respect of agencies generating receipts from domestic and outbound tourism shall be fixed as the receipts from outbound tourism according to the sum of guaranteed receipts from domestic and outbound tourism. IV. FIXING OF THE AMOUNT OF FINANCIAL GUARANTEES
31. Before the enterprise starts to offer tour organising services, it has to apply to a bank or insurance company for the conclusion of a written contract for the granting of financial guarantees.
32. The following documents shall be attached to the application filed with the bank or insurance company: 12.
33. in case the enterprise has been working as an agency for more than a year: 12.1.
34. financial statements for the last four quarters; 12.1.
35. copies of reports for the last four quarters (in the form F-09) filed with the Department of Statistics under the Government of the Republic of Lithuania; 12.1.3 other documents provided for in the legal acts of the bank or insurance company, regulating the procedure for extending guarantees (warranties) and ensuring the right of the bank or insurance company to recourse requirements after the bank or insurance company has effected payment on the basis of the financial guarantee extended; 12.
36. if the enterprise has been in operation for more than a year and has an intention to start working as an agency: 12.2.
37. financial statements for the last four quarters; 12.2.
38. the business plan of the first operational year of the agency; 12.2.3 other documents provided for in the legal acts of the bank or insurance company, regulating the procedure for extending guarantees (warranties) and ensuring the right of the bank or insurance company to recourse requirements after the bank or insurance company has effected payment on the basis of the financial guarantee extended; 12.
39. if the enterprise was established more than 6 month, however no less than a year before and has an intention to start working as an agency: 12.3.
40. financial statements for the last two quarters; 12.3.
41. the business plan of the first operational year of the agency; 12.3.3 other documents provided for in the legal acts of the bank or insurance company, regulating the procedure for extending guarantees (warranties) and ensuring the right of the bank or insurance company to recourse requirements after the bank or insurance company has effected payment on the basis of the financial guarantee extended; 12.
42. if the enterprise was established less than 6 months before and has an intention to start working as an agency: 12.4.
43. the business plan of the first operational year of the agency; 12.4.2 other documents provided for in the legal acts of the bank or insurance company, regulating the procedure for extending guarantees (warranties) and ensuring the right of the bank or insurance company to recourse requirements after the bank or insurance company has effected payment on the basis of the financial guarantee extended;
44. On analysing the documents submitted by the enterprise, the bank or insurance company shall adopt a decision on the granting of the financial guarantee.
45. On calculating the amount of financial guarantees, the bank or insurance company may instruct the agency to agree this amount with the State Tourism Department.
46. On adopting a positive decision concerning the financial guarantee: 15.
47. the bank shall conclude a written contract with the agency for the granting of the financial guarantee and shall issue to the authority representing the interests of the would-be tourists of the agency, i.e. the consumer protection institution referred to in point 4 of these Regulations, a guarantee letter presented in the form established by director of the State Tourism Department. 15.
48. the insurance company shall conclude a written insurance policy with the agency and shall issue to the authority representing the interests of the would-be tourists of the agency, i.e. the consumer protection institution referred to in point 4 of these Regulations, a copy of the insurance policy. V. THE USE OF FINANCIAL GUARANTEES
49. Financial guarantees shall be used in the following cases (one or more than one): 16.
50. to cover expenses connected with the organised return into the place of departure of a tourist of the agency (one or more tourists; hereinafter, the singular form shall be used), placed outside the territory of the Republic of Lithuania and having no possibility of return to Lithuania independently and to cover other reasonable expenses related thereto, as well as to reimburse the tourist of the agency for the value of the services paid under the tour contract and not received in the event of failure or inability by the agency to fulfil its obligations undertaken under the tour contract due to the reasons referred to in point 5 of these Regulations (one ore more than one); 16.
51. to refund to the tourist of the agency all reasonable expenses substantiated by the relevant documents, relating to his independent return to the place of departure in Lithuania and reimburse for the value of the services paid under the tour contract and not received in the event of failure or inability by the agency to fulfil its obligations undertaken under the tour contract due to the reasons referred to in point 5 of these Regulations (one ore more than one); 16.
52. to refund to the tourist of the agency the money paid to the agency under the tour contract in the event of failure by the agency to perform the tour contract due to the reasons referred to in point 5 of these Regulations (one or more than one); 16.
53. to compensate the tourist of the Agency the losses awarded by the court of the Republic of Lithuania as a result of failure by the agency to discharge its obligations (or in the event the agency has performed not all of its obligations) under the tour contract due to the reasons referred to in point 5 of these Regulations ( one or more than one).
54. The tourist of the agency, who is in possession of the tour contract concluded with the agency at the time when the financial guarantees are valid, shall have the right to require the bank or insurance company to discharge the obligations of the agency undertaken under the tour contract and to appeal to the consumer protection institution in relation thereto only on failure by the agency to effect full satisfaction of the requirements of the tourist: 17.
55. in the case referred to in point 16.1 of these Regulations – if, within one working day since receipt of a written acknowledgement sent by a diplomatic mission of the Republic of Lithuania or official foreign state tourism institution, testifying to the inability by the tourist of the agency to return to Lithuania as a result of failure by the agency to perform the tour contract, the agency takes no action to facilitate the return of the tourist of the agency to Lithuania. In the said case, diplomatic missions of the Republic of Lithuania and official foreign state tourism institutions shall send their written acknowledgement to the consumer protection institution and the agency. If the agency fails to fulfil its obligations within one working day since the dispatch of the written acknowledgement, the tourist of the agency shall inform in writing the consumer protection institution thereof; 17.
56. in cases referred to in points 16.2 and 16.3 of these Regulations – if the agency fails to fully satisfy the requirements of the tourist of the agency within the period stipulated in the Regulations for the Provision of Tour Organising Services. In the said case, the tourist of the agency shall file a written request, the tour contract and the ticket with the consumer protection institution; 17.
57. in the case referred to in point 16.4 of these Regulations – where the agency fails to effect payment to the tourist within the period established by the bailiff to effect the court order benevolently. In the said case, the tourist of the agency shall submit to the consumer protection institution a written request and a copy of the court order.
58. The insurance benefit or money under the bank’s guarantee letter shall be paid to the persons (the tourist of the agency or consumer protection institution, or the person authorised by the latter) listed in the letter of request of the consumer protection institution. The following documents testifying to the legitimacy of the claim to pay the money shall be attached to the letter: 18.
59. a copy of the document substantiating the case referred to in points 5.1 – 5.4 of these Regulations; 18.
60. a copy of the tour contract; 18.
61. a request of the tourist of the agency filed with the consumer protection institution (in the case referred to in point 16.1 of these Regulations – only where the tourist of the agency requires to reimburse for the value of the services paid under the tour contract and not received); 18.
62. a written statement of the agency indicating whether the requirements of the tourist of the agency have reasonable grounds (provided that the agency presents this statement within the period fixed by the consumer protection institution); 18.
63. in the case referred to in point 16.1 of these Regulations – the ticket for the means of transport used for the carriage of the tourist of the agency back to Lithuania or the transport lease, expenses relating to the extension of the visa, hotel and catering bills and the documents substantiating travel, postal and telephone expenses of the consumer protection institution or its authorised representative; 18.
64. in the case referred to in point 16.2 of these Regulations – the ticket for the means of transport by which the tourist of the agency returned to Lithuania; 18.
65. in the case referred to in point 16.4 of these Regulations – a copy of the court order.
66. The requirements of tourists of the agency for the whole period during which financial guarantees are valid shall be satisfied in the sequence of their presentation.
67. In the case referred to 16.1 of these Regulations, the tourist of the agency shall be compensated for the value of the services which he has not received only where the costs relating to the organised return of the tourist to Lithuania do not exceed the price of the tour package indicated in the tour contract.
68. If the total sum of claims of tourists of the agency exceeds the amount of financial guarantees or their balance available to the agency, the funds will be earmarked for the payment of the case referred to in point 16.1 of these Regulations in the first place, and the remaining sum (in respect of the cases referred to in points 16.2, 16.3, 16.4 and in the case referred to in point 16.1 to compensate for the value of the services the tourist has not received) will be distributed in proportion to the amount of claims of the tourists of the agency.
69. If the financial guarantees or their balance available to the agency are insufficient to cover the expenses relating to the return of the tourist of the agency to Lithuania as referred to in point 16.1, the tourist of the agency himself shall bear the deficient costs relating to his organised return to Lithuania to the consumer protection institution or its authorised representative after the return to the place of departure in Lithuania.
70. In accordance with the letter of request, the money shall be paid for only those obligations which have arisen by the term of expiry of the guarantee letter or insurance policy, or by the date of termination of financial guarantees.
71. The guarantee letter or a copy of the policy shall be returned to the bank or insurance company respectively within a period of 3 months since the date of expiry of the period established for the submission of a payment claim under the guarantee letter or insurance policy. VI. THE AMOUNT OF DISBURSEMENTS OF FINANCIAL GUARANTEES AND THEIR JUSTIFICATION
72. The amount of disbursements in the case referred to in point 16.1 of these Regulations: 25.
73. shall be fixed to the consumer protection institution or its authorised representative in accordance with the documents listed in point 18.5 of these Regulations; 25.
74. the maximum amount of disbursement to the tourist of the agency for the services the tourist has not been received may not exceed the difference between the price indicated in the tour contract and all reasonable expenses relating to the return to the place of departure in Lithuania. The amount of disbursement shall be established on the basis of a written request of the tourist of the agency, which shall state the contractual obligations the agency has failed to perform, as well as on the basis of the tour contract and a written statement of the agency indicating whether the requirements of the tourist have reasonable grounds (provided that the agency presents this statement within the period prescribed by the consumer protection institution).
75. In cases referred to in points 16.2 and 16.3 of these Regulations, the amount of disbursements of a bank or insurance company to the tourist of the agency may not exceed the price of the tour indicated in the tour contract and shall be fixed in accordance with the following: 26.
76. the tour contract concluded between the tourist of the agency and the agency during the period when the financial guarantees are valid; 26.
77. a written request filed by the tourist of the agency with the consumer protection institution, which shall state the contractual obligations the agency has failed to perform; 26.
78. a written statement of the agency indicating whether the requirements of the tourist of the agency have justified grounds (provided that the agency submits this statement within the period prescribed by the consumer protection institution); 26.
79. in the case referred to in point 16.2 of these Regulations, a return ticket to be submitted additionally.
80. The amount of disbursement of a bank or insurance company in the case referred to in point 16.4 of these Regulations – the amounts awarded to the tourist of the agency by court.
81. During the period when the financial guarantees are valid, the gross sum of disbursements may not exceed the amount of financial guarantees indicated either in the guarantee letter or insurance policy. VII. THE RIGHTS AND OBLIGATIONS OF THE BANK AND INSURANCE COMPANY
82. The bank or insurance company shall have the right to get access to the documents relating to the granting of financial guarantees.
83. Information available to the bank or insurance company about the agency must be kept confidential and may be revealed only: 30.
84. to courts, law enforcement authorities and other institutions, as prescribed by laws; 30.
85. by written consent of the agency or on its request.
86. With changes in the financial position of the agency or where the risk, as referred to in point 5 of these Regulations, increases, the bank or insurance company must take all actions permitted by law against the agency to reduce possible damage.
87. The bank must pay off the sum of money indicated in the letter of request within the period prescribed therein. In the case referred to in point 16.1 of these Regulations, the insurance company shall pay off the money within one working day since the date of receipt of the letter of request from the consumer protection institution, and in cases referred in points 16.2 – 16.4 – within the period stipulated in the insurance regulations.
88. The bank or insurance company may cancel the financial guarantees extended to the agency before their expiry only on giving an advance warning to the agency and informing the consumer protection institution which shall, in turn, notify the commission for tourist services of the relevant municipality at least one month prior to the date of their cancellation.
89. Without exceeding the sum disbursed in financial guarantees, the bank or insurance company may exercise the right of regress to the agency – the provider of tour organising services. VIII. RESPONSIBILITIES OF AGENCIES
90. Before the enterprise starts to offer tour organising services, it must be issued financial guarantees. The possession of financial guarantees is required for the whole duration of the certificate of the agency issued pursuant to the procedure prescribed by the Law on Tourism of the Republic of Lithuania and for further 6 months after the date of expiry thereof. When the bank or insurance company warns the agency of the cancellation of financial guarantees, the agency must acquire new financial guarantees before the date of cancellation of the existing ones. The certificate shall be invalidated in respect of the agency which has failed to acquire new financial guarantees in accordance with the procedure prescribed by the Regulations for the Provision of Tour Organising Services.
91. Financial guarantees shall not be required from the travel agency selling tour packages of the tourist agency in possession of financial guarantees.
92. Within a period of 40 days on completion of each quarter, the agency shall submit to the bank or insurance company financial statements in respect of the quarter concerned, a copy of the quarterly report filed with the Department of Statistics under the Government of the Republic of Lithuania (in the form F-09) and other required documents in connection with its economic and financial activities. The presented documents must conform to the truth.
93. In each tour contract the agency must indicate the name and address of the bank or insurance company as well as the number of the guarantee letter and the number of the insurance policy.
94. With modifications in the data featured in the application for a financial guarantee during the duration of financial guarantees, the agency shall inform the bank or insurance company thereof within 5 working days since the modifications have been effected. IX. CONTROL AND DISPUTE SETTLEMENT PROCEDURE
95. Municipal commissions for tourist services shall exert control over tourist and travel agencies in respect of financial guarantees in accordance with the provisions of these Regulations.
96. The settlement of disputes arising from the application of financial guarantees granted under these Regulations shall be dealt with in accordance with the procedure prescribed by laws of the Republic of Lithuania.