Įstatymas skelbtas: ˇin REPUBLIC OF LITHUANIA LAW ON STATE DEBT 22 August 1996 No I-1508 Vilnius (As last amended on 15 July 2009 – No XI-344) Article 1. Purpose of the Law This Law shall regulate bor

rowing by the Government of the Republic of Lithuania (hereinafter referred to as “the Government”) on behalf of the State, provision of State guarantees, the relations concerning the State’s right of claim in respect of borrowers and the borrowers the discharge of obligations whereof is guaranteed by the State. Article

1. Definitions
2. “General government” shall mean a sector which includes the sectors of central government (the Government and other entities of this sector), local government (municipalities and other entities of this sector) and state social security funds (the State Social Insurance Fund, the Compulsory Health Insurance Fund and other entities of this sector). The attribution of entities and classification according to sectors shall be established by the Government or an institution authorised by it.
3. “State debt” shall mean the aggregate amount of the obligations assumed, but not discharged yet by the general government entities entitled to borrowing in respect of the repayment to creditors of the funds borrowed under government securities distributed, loan agreements, leasing (finance lease) agreements signed and other debt instruments.
4. “Domestic debt” shall mean the aggregate amount of the obligations assumed, but not discharged yet by the general government entities entitled to borrowing in respect of the repayment to domestic creditors of the funds borrowed under government securities distributed, loan agreements, leasing (financial lease) agreements signed and other debt instruments.
5. “Foreign debt” shall mean the aggregate amount of the obligations assumed, but not discharged yet by the general government entities entitled to borrowing in respect of the repayment to foreign creditors of the funds borrowed under government securities distributed, loan agreements, leasing (finance lease) agreements signed and other debt instruments.
6. “Domestic creditors” shall mean the financial institutions and other persons which have economic interests in Lithuania, are engaged in economic or any other such activities not prohibited by laws and operate or reside in Lithuania permanently or temporarily, but for a period exceeding one year, have purchased government securities, granted loans to the State under loan agreements or other debt instruments.
7. “Foreign creditors” shall mean the foreign states, international financial organisations, foreign banks and other persons which have economic interests in Lithuania, but permanently operate or reside in foreign states or operate or reside in Lithuania for a period not exceeding one year, have purchased government securities, granted loans to the State under loan agreements or other debt instruments.
8. “State guarantee” shall mean the property obligation of the State to repay a debt wholly or in part and to pay interest on the debt or part thereof to be repaid to a domestic or foreign creditor for a borrower the discharge of obligations whereof is guaranteed by the State in the event of the borrower’s full or partial default on obligations under a loan agreement or other debt instruments, .
9. “State guarantee for a guarantee institution” shall mean the property obligation of the State to discharge obligations, in respect of credit institutions, of a guarantee institution the discharge of whose obligations under a guarantee issued by this institution to repay a debt wholly or in part and to pay interest on the debt or part thereof to be repaid is guaranteed by the State in the event of the institution’s full or partial default on its obligations under the guarantee.
10. “Government securities” shall mean the securities issued by the Government on behalf of the State on domestic or foreign markets attesting to the right of holder thereof to obtain, within the time limits provided for, an amount corresponding to nominal value thereof, interest or another equivalent.
11. “Borrower” shall mean a legal person of the Republic of Lithuania, a branch of a legal person of the European Union or European Economic Area Member States established in the Republic of Lithuania or a citizen of the Republic of Lithuania or a resident of Lithuania who has received a loan from the funds borrowed on behalf of the State under a loan agreement concluded with the State or under other debt instruments and who assumes the obligation to the State regarding the use and repayment thereof.
12. “Borrower the discharge of obligations whereof is guaranteed by the State” shall mean a legal person of the Republic of Lithuania, a branch of a legal person of the European Union or European Economic Area Member States established in the Republic of Lithuania or a citizen of the Republic of Lithuania or a resident of Lithuania who has received a loan under an agreement concluded with a domestic or foreign creditor or under other debt instruments the meeting of terms and conditions whereof in respect of repayment of a debt wholly or in part and payment of interest on the debt or part thereof to be repaid is guaranteed by the State.
13. “Guarantee institution the discharge of obligations whereof is guaranteed by the State” shall mean a legal person established by the Government which ensures to credit institutions the repayment of the loans granted under guarantees to legal persons of the Republic of Lithuania, the branches of legal persons of the European Union and European Economic Area Member States established in the Republic of Lithuania or citizens of the Republic of Lithuania or residents of Lithuania and the discharge of obligations whereof in respect of repayment of a loan wholly or in part and payment of interest on the loan or part thereof to be repaid is guaranteed by the State.
14. “Financial instrument” shall mean every transaction which results in the creation of financial assets of one party to the transaction and the creation of a financial obligation of the other party to the transaction.
15. “Other debt instruments” shall mean an obligation assumed when borrowing (excluding the obligations assumed under government securities distributed, loan agreements, leasing (financial lease) agreements signed, State guarantees provided) to repay the amount of funds indicated in instruments under the terms and conditions agreed upon (specified) in these instruments (commercial paper, promissory notes and bills of exchange, certificates of deposit, etc.).
16. “Funds borrowed on behalf of the State” shall mean the funds borrowed, in accordance with the procedure laid down by the Government, by the Ministry of Finance of the Republic of Lithuania (hereinafter referred to as “the Ministry of Finance”) representing the Government and received under government securities distributed, loan agreements signed and other debt instruments. Article
17. Basic Provisions of Government Borrowing on Behalf of the State and Provision of State Guarantees
18. A decision concerning the limit on net borrowing of the Government shall be taken, on a proposal of the Government, by the Seimas of the Republic of Lithuania (hereinafter referred to as “the Seimas”) when approving the state budget of a relevant year.
19. Government securities shall be issued, loans on behalf of the State shall be taken, State guarantees shall be provided and obligations under other debt instruments shall be assumed by the Government in compliance with the limits established by laws and in accordance with the procedure laid down in Articles 5 and 6 of this Law.
20. When borrowing on behalf of the State, the Government shall be represented by the Ministry of Finance. This Ministry shall, in accordance with the procedure laid down by the Government: 1) borrow funds on domestic and foreign markets by taking loans, issuing government securities and other debt instruments; 2) set the characteristics and conditions of issuance of government securities; 3) carry out operations with government securities on domestic and foreign markets.
21. In managing the obligations assumed by the Government on behalf of the State, the Government shall be represented by the Ministry of Finance. This Ministry shall, by a decision of the Government and in accordance with the procedure laid down by the Government: 1) conclude delegation agreements with the Public Company Turto Bankas on the loans, State guarantees and other property obligations transferred for administration by the Ministry of Finance. The loans, State guarantees and other property obligations transferred to the Public Company Turto Bankas as well as the procedure for administering them shall be laid down by the Government; 2) write off the bad loans or debts indicated in Article 11 of this Law; 3) transfer, for consideration, a claim for the repayment of loans or debts and discharge of other property obligations related thereto; 4) where a borrower or the borrower the discharge of obligations whereof is guaranteed by the State increases the authorised capital by additional contributions, may acquire the shares of these borrowers at the issuance price by offsetting their debts to the State; 5) exercise other rights established by legal acts to the State as the creditor under agreements on loans from the funds borrowed on behalf of the State and under other debt instruments.
22. The Ministry of Finance shall: Version of subparagraph 1 before 1 January of the year the sets of reports for which must be drawn up by public sector entities under the Law on Public Sector Accounts: 1) keep accounts of the funds borrowed and obligations assumed on behalf of the State under government securities distributed, loan agreements signed and other debt instruments and draw up financial statements; Version of subparagraph 1 after 1 January of the year the sets of reports for which must be drawn up by public sector entities under the Law on Public Sector Accounts: 1) keep accounts of the funds borrowed and obligations assumed on behalf of the State under government securities distributed, loan agreements signed and other debt instruments and draw up sets of financial reports and reports on the implementation of the budget; 2) systematise, accumulate, store and process data on government securities issued, the loans taken on behalf of the State, loans with a State guarantee and other obligations under other debt instruments; 3) store the original copies of agreements on the loans taken on behalf of the State, State guarantees, instruments relating to the distribution of government securities and other debt instruments; 4) plan the borrowing requirement; 5) after the close of a budgetary year, co-ordinate with creditors the balance of the obligations assumed under government securities distributed, agreements on the loans granted on behalf of the State and other debt instruments; 6) use financial instruments (including derivatives) to manage the obligations assumed by the Government on behalf of the State; 7) publish data about borrowers and the borrowers the discharge of obligations whereof is guaranteed by the State to the extent that this does not contradict provisions of the Republic of Lithuania Law on Legal Protection of Personal Data and the Republic of Lithuania Law on Provision of Information to the Public.
23. The Ministry of Finance or the Public Company Turto Bankas, where this company administers the loans, State guarantees and other property obligations transferred by the Ministry of Finance, shall: 1) control the granting, distribution, repayment and use of loans and discharge of other financial obligations related to the loans; 2) analyse the financial position of borrowers or the borrowers the discharge of obligations whereof is guaranteed by the State; 3) group loans and other property obligations, calculate the need for specific provisions to cover probable losses on granted loans and loans with a State guarantee according to the rates of specific provisions for doubtful loans as established by the Government and the rules for grouping of the loans granted from the funds borrowed on behalf of the State and loans with a State guarantee as approved by the Ministry of Finance; 4) have the right, under the terms and conditions and in accordance with the procedure laid down by the Government, to revise the terms and conditions of repayment of a loan or debt and conclude with the borrower or the borrower the discharge of obligations whereof is guaranteed by the State an agreement on amendment of the terms and conditions of the loan or a debt repayment agreement, where it is unfeasible in economic terms to initiate the opening of bankruptcy proceedings or recovery of the debt in accordance with the procedure laid down by the Code of Civil Procedure of the Republic of Lithuania.
24. All possible financial resources of the State, including new property obligations of the State, shall be employed to discharge all property obligations arising from the relations regulated by this Law and assumed by the Government.
25. Existing and future assets of the State may not be pledged in order to secure the discharge of property obligations of the State, with the exception of the cases when government securities shall be pledged under repurchase agreements.
26. The gold and foreign currency reserves of the Bank of Lithuania may not be pledged in order to secure the discharge of property obligations of the State.
27. The Government may use the funds borrowed on behalf of the State only for the purposes indicated in this Law.
28. The Government shall have the right to grant loans from the funds borrowed on behalf of the State to legal persons of the Republic of Lithuania or the branches of legal persons of the European Union or European Economic Area Member States established in the Republic of Lithuania, with the exception of the cases when the funds have been obtained under the loan agreements providing otherwise. Loan agreements with borrowers shall be signed by the Minister of Finance or a person authorised by him.
29. The procedure for granting loans from the funds borrowed on behalf of the State and State guarantees as well as for repaying the loans granted shall be laid down by the Government.
30. Until property obligations have been fully discharged and without a written authorisation issued by the Ministry of Finance or the Public Company Turto Bankas, where this company administers the loans, State guarantees and other property obligations transferred by the Ministry of Finance, as well as not having agreed upon the terms and conditions of the carrying out of these actions, borrowers or the borrowers the discharge of obligations whereof is guaranteed by the State, with the exception of credit institutions and municipalities, shall not have the right to: 1) reorganise a legal person; 2) reduce the authorised capital; 3) sell or otherwise transfer, lease or ledge fixed assets; 4) stand surety for or guarantee with their assets the discharge of obligations of other entities; 5) grant loans (with the exception of a consumer loan); 6) invest assets in other economic entities; 7) assume new obligations through distributing debt securities, signing loan agreements, leasing (finance lease) agreements or other debt instruments.
31. The restrictions established by the Republic of Lithuania Law on Companies and related to prohibition for companies to ledge their assets to shareholders when borrowing from the shareholders as well as restriction on the annual interest rate shall not apply to the relations regulated by this Law. Article
32. Purposes of Government Borrowing on Behalf of the State and Provision of State Guarantees
33. The Government may borrow on behalf of the State for the following purposes: 1) to finance the deficit of the State budget as well as to balance state cash flows; 2) to finance state investments; 3) to cover the State debt; 4) to cover the liabilities of state social security funds as well as to balance the cash flows of these funds; 5) for other purposes, where a separate law has been passed therefor.
34. The Government may, on behalf of the State, provide State guarantees for the loans: 1) used to finance state investments; 2) used for implementing the objectives set in the Law of the Republic of Lithuania on Financial Sustainability; 3) granted to students according to the Law of the Republic of Lithuania on Science and Studies. The provisions of Article 9 of this Law shall not apply to the persons indicated in this subparagraph. Article
35. Borrowing on Behalf of the State
36. A decision on borrowing on behalf of the State in an amount exceeding LTL 40 million, provided it does not exceed the limits established by laws, shall be taken by the Seimas by passing a separate law on a proposal of the Government.
37. A decision on borrowing on behalf of the State in an amount not exceeding LTL 40 million, provided it does not exceed the limits established by laws of the Republic of Lithuania, shall be taken by the Government or an institution authorised by it.
38. A decision on borrowing on behalf of the State, provided the limit on net borrowing of the Government as established by a law is not exceeded shall be taken by the Ministry of Finance representing the Government without taking into consideration the amount to be borrowed, where it borrows: 1) to finance the deficit of the State budget as well as to balance state cash flows; 2) to cover the State debt; 3) for other purposes, where a separate law has been passed therefor.
39. Agreements on the loans taken on behalf of the State, the instruments related to the distribution of government securities and other debt instruments shall be commercial arrangements. The agreements on the loans taken on behalf of the State, the instruments related to the distribution of government securities and other debt instruments shall be signed by the Minister of Finance. The agreements on the loans taken on behalf of the State, the instruments related to the distribution of government securities and other debt instruments may, on a proposal of the Minister of Finance, be signed by the civil servants authorised by a resolution of the Government.
40. A legal opinion made available at the request of a creditor regarding a loan taken on behalf of the State or other debt instruments as well as regarding other legal instruments related to state borrowing, and a legal opinion made available at the request of the distributor of government securities regarding the instruments related to the distribution of the government securities shall be signed by the Minister of Justice or a person authorised by him.
41. The funds borrowed on behalf of the State shall be obtained and repaid through a fiscal agent of the State – the Bank of Lithuania or another bank.
42. The Ministry of Finance shall have the right, in accordance with the procedure laid down by legal acts, to select a fiscal agent to carry out operations of issuance of government securities. Subject to consent of the Ministry of Finance, the fiscal agent may lay down the procedure for carrying out these operations. Article
43. Loan with a State Guarantee
44. A decision to grant a State guarantee to a loan which exceeds LTL 40 million shall be taken by the Seimas on a proposal of the Government.
45. A decision to grant a State guarantee to a loan which is less than LTL 40 million shall be taken by the Government pursuant to the Republic of Lithuania Law on the Approval of Financial Indicators of the State Budget and Municipal Budgets of the relevant year or other laws.
46. A State guarantee shall be signed by the Minister of Finance, whereas a legal opinion concerning the guarantee granted shall be signed, at the request of a creditor, by the Minister of Justice or a person authorised by him.
47. A guarantee fee may be required for a State guarantee granted from a borrower the discharge of obligations whereof is guaranteed by the State. The amount of the guarantee fee, cases of and rules for payment thereof shall be established by the Government.
48. Property obligations of the State under State guarantees shall become a State debt where bankruptcy or restructuring proceedings have been opened against the borrower the discharge of obligations whereof is guaranteed by the State, it is in liquidation or has been liquidated, where a composition with creditors as indicated in the Republic of Lithuania Enterprise Bankruptcy Law (hereinafter referred to as “the Enterprise Bankruptcy Law”) is concluded with this borrower and in other cases when the State continuously (systematically) discharges its obligations under a guarantee in respect of the borrower the discharge of obligations whereof it guarantees. Article
49. State Loan Commission
50. The Government shall form a State Loan Commission to submit proposals to the Government regarding the granting of loans from the funds borrowed on behalf of the State and State guarantees (with the exception of proposals regarding granting of the State guarantees provided for in subparagraph 3 of paragraph 2 of Article 4 of this Law) as well as application of the instruments specified in this Law when administering the abovementioned loans and State guarantees.
51. The functions of the State Loan Commission shall be specified and composition thereof shall be approved by the Government. Article
52. Establishment of Guarantee Institutions and State Guarantee for a Guarantee Institution
53. The Government shall have the right to establish guarantee institutions which would secure to credit institutions the repayment of the loans granted under guarantees to legal persons of the Republic of Lithuania, the branches of legal persons of European Union or European Economic Area Member States established in the Republic of Lithuania or citizens of the Republic of Lithuania or residents of Lithuania, provided funds have been earmarked in the State budget of that year or in state funds for the implementation of certain programmes.
54. The State shall guarantee the discharge of a guarantee institution’s obligations under guarantees in respect of credit institutions. The Government shall annually establish limits on obligations under guarantees for each guarantee institution. These limits may not exceed a limit established in the Law on the Approval of Financial Indicators of the State Budget and Municipal Budgets of the relevant year.
55. Guarantees of a guarantee institution shall be signed by the head of the guarantee institution in accordance with the procedure laid down by the Government. The obligations of the guarantee institutions established by the Government under guarantees in respect of credit institutions shall be held equivalent to a State guarantee.
56. In implementing the programmes carried out by the State, a guarantee institution shall, in accordance with the procedure laid down by the Government, consider applications of legal persons of the Republic of Lithuania, the branches of legal persons of the European Union or European Economic Area Member States established in the Republic of Lithuania or citizens of the Republic of Lithuania or residents of Lithuania for securing the repayment of loans to the credit institutions which grant the loans to them, keep accounts of the loans granted, control the implementation of the business plans submitted and impose sanctions on the borrowers which fail to observe the terms and conditions of guarantees.
57. Activities of a guarantee institution shall be supervised and reporting of this institution shall be established by an institution authorised by the Government. Version of paragraph 6 before 1 January of the year the sets of reports for which must be drawn up by public sector entities under the Law on Public Sector Accounts:
58. A guarantee institution must, not later than within 4 months after the close of the financial year, submit to the Government annual accounts and the auditor’s report. Version of paragraph 6 after 1 January of the year the sets of reports for which must be drawn up by public sector entities under the Law on Public Sector Accounts:
59. A guarantee institution must, not later than within 4 months after the close of the financial year, submit to the Government a set of annual reports and the auditor’s report.
60. Where losses of a guarantee institution amount to one fourth of the authorised capital, the Government must suspend the provision of new guarantees. Article
61. Control of the Financial Activity of Borrowers and the Borrowers the Discharge of Obligations Whereof is Guaranteed by the State
62. The persons wishing to receive a loan from the funds borrowed on behalf of the State or a State guarantee in respect of a loan taken to finance an investment project or a State guarantee to implement the objectives set in the Law of the Republic of Lithuania on Financial Sustainability must submit to the Ministry of Finance the documents specified by the Government.
63. Borrowers or the borrowers the discharge of obligations whereof is guaranteed by the State must submit to the Ministry of Finance or to the Public Company Turto Bankas, where this company administers the loans, State guarantees and other debt instruments transferred by the Ministry of Finance, annual economic and financial activity reports, the auditor’s report concerning the annual performance during the period of the utilisation of a loan, the auditor’s report for another period at the request of this ministry or the Public Company Turto Bankas as well as information about existing and newly opened accounts with credit institutions and changes in the accounts of the credit institutions and other requisites indicated in agreements.
64. Audit services shall be paid from funds of a borrower or the borrower the discharge of obligations whereof is guaranteed by the State.
65. State and municipal control institutions and establishments (hereinafter referred to as “control institutions and establishments”) shall, in accordance with the procedure laid down by legal acts, verify the economic and financial position of borrowers and the borrowers the discharge of obligations whereof is guaranteed by the State as well as the granting of loans and State guarantees granted from the funds borrowed on behalf of the State, use of the loans according to their purpose and repayment thereof.
66. A borrower or the borrower the discharge of obligations whereof is guaranteed by the State must submit to the Ministry of Finance or to the Public Company Turto Bankas, where this company administers the loans, State guarantees and other liabilities transferred by the Ministry of Finance, audit firms, control institutions and establishments the documents required by them within the time limits laid down by them, with the exception of the documents the procedure for submitting whereof shall be laid down by the Government. Article
67. Legal Consequences of Default on Obligations
68. Late payment interest shall be charged for each day of delay in the case of a delay in the discharge of the property obligations specified in loan or debt repayment agreements. The amount of late payment interest shall be calculated on the basis of the weighted average of the annual interest rate for Treasury bills of the Republic of Lithuania issued in litas by auction in the previous calendar quarter, which under agreements may not be increased by more than 10 percentage points, divided by
69. Where the loans, State guarantees and other property obligations transferred by the Ministry of Finance are administered by the Public Company Turto Bankas, the Government shall have the right to exempt a borrower from the payment of the late payment interest which has been calculated, but has not been paid for the loans or debts not repaid on time and unpaid interest or to suspend the calculation of late payment interest in respect of a borrower or the borrower the discharge of obligations whereof is guaranteed by the State as well as to exempt these borrowers from the payment of an unpaid difference in exchange rates which was calculated when they failed to keep to a time limit laid down for the discharge of an obligation and after the expiry of this time limit – where a currency in which the payment must be made devaluated due to a change in exchange rates. Criteria of exemption from the payment of late payment interest and from the payment of a difference in currency exchange rates as well as criteria of suspension of the calculation of late payment interest shall be established by the Government.
70. The Ministry of Finance shall have the right to recover from a borrower or the borrower the discharge of obligations whereof is guaranteed by the State a loan or debt or part thereof which has not been repaid on time, unpaid interest, late payment interest, a difference in exchange rates or other payments provided for under agreements as well as the expenses incurred by the State and related to the filing of a claim for the discharge of an obligation. Where the borrower the discharge of obligations whereof is guaranteed by the State defaults on contractual obligations, as a result whereof the State, as the guarantor, has to discharge them, the Ministry of Finance shall acquire the right of recourse against the borrower the discharge of obligations whereof is guaranteed by the State. Where the borrower or the borrower the discharge of obligations whereof is guaranteed by the State has failed to keep to a time limit laid down for the discharge of an obligation, and a currency in which the payment must be made devaluated after the expiry of this time limit due to a change in exchange rates, these borrowers must pay to the Ministry of Finance a difference between the exchange rate at the time of expiry of the time limit for the discharge of the obligation and the exchange rate at the time of payment. Decisions of the Ministry of Finance regarding the recovery of a debt from the borrower or the borrower the discharge of obligations whereof is guaranteed by the State shall be passed to bailiffs in accordance with the procedure laid down by the Code of Civil Procedure.
71. Where the Public Company Turto Bankas administers the loans, State guarantees and other property obligations transferred by the Ministry of Finance, it shall have the right to take over into its ownership the assets of a borrower or the borrower the discharge of obligations whereof is guaranteed by the State or of third parties, where they have not been realised in accordance with the procedure laid down by the Code of Civil Procedure and/or the Enterprise Bankruptcy Law, and to realise them in order to discharge all property obligations of the borrowers as well as to compensate for the expenses incurred by the State and related to the filing of a claim for the discharge of the obligation.
72. Where a borrower or the borrower the discharge of obligations whereof is guaranteed by the State fails to timely discharge property obligations under agreements or where a security for the discharge of an obligation is insufficient, the Ministry of Finance or the Public Company Turto Bankas, where this company administers the loans, State guarantees and other property obligations transferred by the Ministry of Finance, may request that these borrowers provide additional security for the discharge of the obligation.
73. Where a borrower or the borrower the discharge of obligations whereof is guaranteed by the State fails to timely discharge property obligations and it is unfeasible in economic terms to amend the terms and conditions of repayment of a loan and/or debt in respect of this borrower or to take and order the execution of a decision of the Ministry of Finance to recover the debt, the Ministry of Finance or, upon its direction, the Public Company Turto Bankas shall have the right to apply, in accordance with the procedure laid down by legal acts, to a court for the opening of bankruptcy proceedings against the borrower or the borrower the discharge of obligations whereof is guaranteed by the State. The Ministry of Finance or the Public Company Turto Bankas, where this company administers the loans, State guarantees and other property obligations transferred by the Ministry of Finance, shall give a written notice of its intentions to apply to the court for the opening of bankruptcy proceedings to a borrower or the borrower the discharge of obligations whereof is guaranteed by the State. The notification shall indicate the obligations not discharged by the borrower or the borrower the discharge of obligations whereof is guaranteed by the State and shall warn that if they are not discharged of within a period indicated in this notification, the Ministry of Finance or the Public Company Turto Bankas, where this company administers the loans, State guarantees and other property obligations transferred by the Ministry of Finance, shall apply to a court for the opening of bankruptcy proceedings. Article
74. Acknowledgement of Loans or Debts as Bad
75. A bad loan or debt may be a loan or debt or part thereof not repaid by a borrower or the borrower the discharge of obligations whereof is guaranteed by the State, unpaid interest, late payment interest and other property obligations which is it impossible or unfeasible to recover for the following reasons: 1) in the event of the borrower’s decease, there are no successors who could assume his property obligations to the State; the borrower or the borrower the discharge of obligations whereof is guaranteed by the State goes into liquidation; 2) a composition is concluded with the borrower or the borrower the discharge of obligations whereof is guaranteed by the State as indicated in the Enterprise Bankruptcy Law or these borrowers’ restructuring proceedings are closed in accordance with the procedure laid down by the Law on Restructuring of Enterprises; 3) where, upon transfer for consideration of a claim to repay loans or debts and to discharge other property obligations related thereto, the amount obtained is less that the loan or the debt, the remaining part of the loan or debt which has not been obtained shall be acknowledged as bad; 4) after the expiry of more than one year since the commencement of actions of recovery, no assets of the borrower or the borrower the discharge of obligations whereof is guaranteed by the State is identified or the assets identified are non-liquid (they cannot be realised) or where the assets identified are sufficient only to cover a part of the debt, the remaining part of the debt shall be acknowledged as bad; 5) the borrower or the borrower the discharge of obligations whereof is guaranteed by the State – a natural person as well as a farmer, owner of an individual enterprise or member of a partnership – is in a difficult economic (social) situation. The circumstances attesting to a difficult economic (social) situation must be supported by the documents issued by competent authorities.
76. A decision on the acknowledgement of a loan or debt as bad shall be taken by the Government on a proposal of the Ministry of Finance.
77. A loan or debt acknowledged as bad on the grounds specified in subparagraphs 1, 2 and 3 of paragraph 1 of this Article shall expire and be written off from relevant accounting documents.
78. A loan or debt acknowledged as bad on the grounds specified in subparagraphs 4 and 5 of paragraph 1 of this Article shall, in accordance with the procedure laid down by the Government or an institution authorised by it, be audited, namely, possibilities of recovery thereof shall be reviewed, the financial position of borrowers shall be analysed, and identification of assets shall be carried out. Upon establishing possibilities of the recovery of a loan or debt (or part thereof), recovery shall be executed in accordance with the procedure laid down by laws.
79. The procedure for writing off, accounting for as well as auditing bad loans or debts shall be laid down by the Government or an institution authorised by it. Version of Article 12 before 1 January of the year the sets of reports for which must be drawn up by public sector entities under the Law on Public Sector Accounts: Article
80. Reporting
81. After the close of the budgetary year, the Government must submit to the Seimas, together with a report on the implementation of the State budget, reports on the State debt as well as the loans granted from the funds borrowed on behalf of the State and State guarantees provided. The forms of reports complying with provisions of this Law and the Law on the Approval of Financial Indicators of the State Budget and Municipal Budgets shall be established by the Minister of Finance.
82. The National Audit Office shall assess the reports on the State debt and the loans granted from the funds borrowed on behalf of the State and State guarantees provided as drawn up by the Government and, together with a conclusion on an annual report on the implementation of the State budget, shall submit to the Seimas a conclusion on the State debt and the loans granted from the funds borrowed on behalf of the State and State guarantees provided. Version of Article 12 after 1 January of the year the sets of reports for which must be drawn up by public sector entities under the Law on Public Sector Accounts: Article
83. Reporting
84. After the close of the budgetary year, the Government must submit to the Seimas, together with an annual set of reports on the implementation of the State budget, reports on the State debt as well as the loans granted from the funds borrowed on behalf of the State and State guarantees provided. The forms of reports complying with provisions of this Law and the Law on the Approval of Financial Indicators of the State Budget and Municipal Budgets shall be established by the Minister of Finance.
85. The National Audit Office shall assess the reports on the State debt and the loans granted from the funds borrowed on behalf of the State and State guarantees provided as drawn up by the Government and, together with a conclusion on an annual set of reports on the implementation of the State budget, shall submit to the Seimas a conclusion on the State debt and the loans granted from the funds borrowed on behalf of the State and State guarantees provided. I promulgate this Law passed by the Seimas of the Republic of Lithuania. PRESIDENT OF THE REPUBLIC ALGIRDAS BRAZAUSKAS