OFFICIAL TRANSLATION REPUBLIC OF LITHUANIA LAW ON BANKS 30 March 2004 No IX-2085 (As last amended on 18 January 2007 – No X-1038) Vilnius CHAPTER I GENERAL PROVISIONS Article 1. Purpose of the Law  1. The purpose of this Law shall be to regulate the procedure for setting up, licensing, pursuing of business, terminating and restructuring as well as supervising of Lithuanian commercial banks and specialised banks as well as foreign banks operating in the Republic of Lithuania, including establishments thereof, in order to ensure a stable, sound, efficient and safe banking system. 2. This Law shall implement the legal acts of the European Union listed in the Annex to this Law. Article 2. Definitions 1. “Bank” shall mean a commercial bank and a specialised bank. 2. “Banking licence” (hereinafter referred to as “licence”) shall mean an authorisation granted to a bank according to the procedure set forth by this Law to engage in the provision of licensed financial services. 3. “Financial services” shall mean the services referred to in paragraph 1 of Article 3 of the Law on Financial Institutions. 4. “Heads of a legal person” shall mean members of bodies of legal persons with the exception of the meeting of members. 5. “Commercial bank” shall mean a credit institution set up in the Republic of Lithuania which is authorised to engage in receiving of deposits and other repayable funds from non-professional participants of the market and in lending thereof and engages therein as well as assumes the risk and liability related thereto. 6. “Licensed financial services” shall mean: 1) receipt of deposits or other repayable funds from non-professional participants of the market; 2) money transfer; 3) issuing and administering of electronic money; 4) other financial services subject to a licence issued in accordance with other laws of the Republic of Lithuania. 7. “Specialised bank” shall mean a credit institution set up in the Republic of Lithuania which has been authorised to provide only the licensed financial service referred to in subparagraph 3 of paragraph 6 of this Article. 8. “Foreign bank” shall mean a credit institution set up in a foreign state which holds an authorisation or licence issued by the supervisory institution of the foreign state to engage in receiving of deposits and other repayable funds from non-professional participants of the market and lending thereof or in the issuance and administration of electronic money and is engaged therein. 9. “Participation in management of the capital” shall mean a direct or indirect management of 20 per cent or more of an undertaking’s authorised capital and/or voting rights, also another real possibility to exercise influence over decisions on the activities of the undertaking both being a participant of the undertaking and holding other rights related to the capital. 10. Other concepts used in this Law shall be interpreted as they are defined in the Law on Financial Institutions. Article 3. Name, Legal Form and Registered Office of a Bank, Legal Acts Regulating Banking Activities 1. The word "bank" or other combinations or derivatives thereof may be used in the Republic of Lithuania only by the persons operating in accordance with this Law in their name or for advertising or other purposes, except where the use of this word is evidently unrelated to the provision of licensed financial services. 2. Paragraph 1 of this Article shall not be applied where the name of a legal person has been laid down by a law of the Republic of Lithuania regulating its activities. 3. The legal form taken by a bank as a legal person may only be a public limited liability company or a private limited liability company. 4. The registered office of a public limited liability company or a private limited liability company holding a licence issued according to the procedure set forth by this Law and registered in the Republic of Lithuania Register of Legal Persons must be in the Republic of Lithuania. 5. Banks shall act in compliance with the Constitution of the Republic of Lithuania, the Civil Code, this Law, legal acts adopted by supervisory institutions and their statutes (articles of association) (hereinafter referred to as “articles of association”). Banks shall also act in compliance with the Law on Financial Institutions, the Law on Companies and other legal acts, except where this Law provides otherwise. Article 4. Financial Services Provided by a Bank and Other Activities 1. The right to engage in receiving of deposits or other repayable funds from non-professional participants of the market according to the procedure set forth by this Law shall only be vested in: 1) the banks holding a licence which grants such a right; 2) branches of foreign banks holding a licence which grants such a right; 3) foreign banks which are licensed in the Member States of the European Union and in the states of the European Economic Area (hereinafter referred to as “the Member States of the European Union”) and which have the right to engage in receiving of deposits or other repayable funds from non-professional participants of the market in the state concerned, have set up branches in the Republic of Lithuania according to the procedure set forth by this Law or provide financial services without setting up a branch. 2. A bank shall have the right to provide all financial services, including financial services in a foreign currency, except where this right is restricted by this Law and other laws. 3. In addition to the provision of financial services, a bank may pursue only such other activities as those in the absence of which financial services cannot be provided, which assist in the provision of the financial services or are otherwise directly related to the provision of the financial services. 4. Where a bank itself decides not to carry on a certain activity in the absence of which financial services cannot be provided, which assists in the provision of financial services or is otherwise directly related to the provision of financial services and to conclude transactions with other persons on the provision of respective services to the bank (hereinafter referred to as “the purchase of ancillary banking services”), the bank must notify thereof the supervisory institution and provide to it the information laid down by legal acts of the supervisory institution prior to concluding the said transactions. The legal acts of the supervisory institution may set the requirements for the purchase of the ancillary banking services. 5. A specialised bank authorised only to issue and administer electronic money may provide only such other non-licensed financial services and pursue only such other activities as those in the absence of which electronic money cannot be issued and administered or which assist in the issuing and administering thereof or are otherwise directly related to the issuance and administration of electronic money, also store data on an electronic media on behalf of other legal persons. Moreover, the said specialised bank shall have the right to issue payment cards and other means of payment and to carry out operations therewith, however, when providing this financial service, the bank shall not have the right to grant any form of credit. 6. Prior to taking decisions which restrict a bank’s freedom to dispose of the funds in its account or which otherwise restrict the right of the bank to provide financial services to the bank’s clients, court of the Republic of Lithuania and other institutions or officials stipulated by laws must obtain a conclusion of the supervisory institution on the influence of these decisions on the stability and soundness of the whole system of banks. Article 5. Articles of Association of a Bank 1. The articles of association of a bank being established and amendments to the articles of association of the bank shall become invalid where they are not submitted to the Register of Legal Persons within 12 months accordingly of the signing of the articles of association or of the taking of a decision on the amendment of the articles of association of the bank at the general meeting of the shareholders. 2. Amendments to the articles of association of a bank may be registered in the Register of Legal Persons only upon obtaining an authorisation of the supervisory institution, where the provisions of the articles of association are amended in respect of: 1) the name or registered office of the bank; 2) the amount of the authorised (share) (hereinafter referred to as “authorised”) capital; 3) the number of shares and their number according to class, their nominal value and the rights attaching to them; 4) the powers of the bank’s bodies, procedure for electing and removing from office their members. 3. An authorisation to register amendments to articles of association of a bank shall be granted by the supervisory institution according to the procedure set forth this Law and legal acts of the supervisory institution. 4. In order to obtain an authorisation to register amendments to articles of association, a bank shall submit to the supervisory institution an application and other documents and data specified by legal acts of the supervisory institution. Where amendments to the articles of association of the bank are related to the increase of the authorised capital of the bank by issuing new shares, the documents and data referred to in subparagraphs 6 and 7 of paragraph 2 of Article 8 of this Law shall be submitted. 5. The supervisory institution must examine submitted documents and decide on the granting of an authorisation to register amendments to articles of association of a bank within 30 days of the receipt of the application or, where the amendments to the articles of association of the bank are related to the increase of the authorised capital of the bank by issuing new shares, within 2 months of the receipt of the application. 6. Where amendments to articles of association are related to the increase of authorised capital and upon increasing the authorised capital a person will acquire a qualifying holding in the bank’s authorised capital and/or voting rights or will increase it so that an authorisation of the supervisory institution will be required, the documents and data referred to in Article 25 of this Law must be submitted together with an application for the granting of an authorisation to register the amendments to the articles of association, and the person must obtain an authorisation of the supervisory institution to acquire a qualifying holding in the bank’s authorised capital and/or voting rights. Applications submitted in this case shall be examined and decisions shall be taken within the time limits laid down in Article 25 of this Law. 7. The supervisory institution may refuse to grant an authorisation to register amendments to articles of association of a bank, where: 1) submitted documents do not meet the requirements set in this Law and legal acts of the supervisory institution, not all data specified by the legal acts or additionally required have been submitted or they are incorrect; 2) upon making the amendments, provisions of the articles of association of the bank will not ensure safe and sound activities of the bank or will not be in conformity with the relevant legal acts; 3) upon increasing the authorised capital by issuing new shares, the bank’s shares have not been fully paid-up in the prescribed manner or the bank’s shareholders, including those acquiring a qualifying holding in the bank’s authorised capital and/or voting rights, do not meet the requirements set. 8. The supervisory institution shall give written notice to the Register of Legal Persons of the taking of a decision to grant or not to grant an authorisation to register amendments to articles of association of a bank within 5 working days of the taking of the decision. CHAPTER II ESTABLISHMENT AND LICENSING OF A BANK, FINANCIAL UNDERTAKINGS CONTROLLED BY A BANK, A BANK’S BRANCHES AND REPRESENTATIVE OFFICES Article 6. Procedure for Establishing a Bank 1. A bank shall be established according to the procedure set forth by the Civil Code, the Law on Financial Institutions, this Law and, except where this Law provides otherwise, the Law on Companies. 2. A bank may only be established for an indefinite period of time. 3. A bank may be registered upon obtaining an authorisation of the supervisory institution to establish the bank. 4. Shares of a bank being established must be fully paid-up prior to the convening of the statutory meeting. Article 7. Founders 1. A bank may be established by not less than 10 founders. 2. Paragraph 1 of this Article shall not be applied where one of the founders of a bank is a Lithuanian or foreign financial institution or insurance undertaking and acquires more than 2/3 of the bank’s voting shares. 3. Each founder of a bank must acquire not less than 3 per cent of the bank’s voting shares. 4. The persons who may not be founders of a financial institution pursuant to the Law on Financial Institutions and the persons who may not be shareholders of a bank pursuant to this Law may not be founders of a bank. Article 8. Authorisation to Establish a Bank 1. An authorisation to establish a bank shall be granted by the supervisory institution according to the procedure set forth by laws and legal acts of the supervisory institution. 2. In order to obtain an authorisation to establish a bank, founders of the bank shall submit to the supervisory institution an application and the documents and data specified by legal acts of the supervisory institution, including: 1) the memorandum of the bank; 2) articles of association of the bank; 3) minutes of the statutory meeting and list of participants of the meeting; 4) a framework for activities of the bank; 5) documents and data on the identities of the founders of the bank and the proportion of the bank’s authorised capital and/or voting rights being acquired by each one of them as well as the documents and data evidencing that the funds used for the acquisition of the proportion of the bank’s authorised capital and/or voting rights have been obtained legitimately; 6) documents and data on the founders of the bank who acquired a proportion of the bank’s authorised capital and/or voting rights reaching or exceeding 5 per cent, including data on their financial situation, on the proportion held in other legal persons’ authorised capital and/or voting rights and on the members of the founders (legal persons) holding a qualifying holding in the founder’s authorised capital and/or voting rights; 7) the documents proving that shares of the bank have been fully paid-up; 8) a list of heads of the bank elected by the statutory meeting whose election or appointment is subject to an authorisation of the supervisory institution. 3. Where a founder acquires a qualifying holding in the bank’s authorised capital and/or voting rights, the documents and data referred to in Article 25 of this Law shall be additionally submitted, and an authorisation of the supervisory institution to acquire a qualifying holding in the bank’s authorised capital and/or voting rights must be obtained. 4. The supervisory institution must examine the submitted documents and take a decision on the granting of an authorisation to establish a bank within 3 months of the receipt of an application. 5. The supervisory institution may refuse to grant an authorisation to establish a bank where: 1) submitted documents do not meet the requirements set in this Law and legal acts of the supervisory institution, not all data specified by the legal acts or additionally required have been submitted or they are incorrect; 2) provisions of the articles of association of the bank do not ensure safe and sound activities of the bank or are not in conformity with the relevant legal acts; 3) the legal form, founders of the bank being established, heads of the bank, minimum capital of the bank do no meet the requirements set by laws. 6. The supervisory institution shall give written notice to the Register of Legal Persons of a decision to grant or not to grant an authorisation to establish a bank. 7. Upon granting an authorisation to establish a bank and until issuing to the bank a licence, a founder (shareholder) of the bank shall be prohibited from selling or otherwise transferring the shares acquired by him and set out in the memorandum, and the bank shall be prohibited from issuing new shares or otherwise changing the size of the authorised capital or composition of founders provided for by the memorandum. 8. The supervisory institution shall withdraw an authorisation to establish a bank prior to the establishment of the bank where: 1) the authorisation has been obtained fraudulently or otherwise breaching laws; 2) upon the expiry of the time limit laid down in paragraph 1 of Article 5 of this Law, articles of association of the bank being established become invalid. 9. The supervisory institution shall give written notice to founders and the Register of Legal Persons of a decision to withdraw an authorisation to establish a bank within 3 working days. Article 9. Licence 1. When issuing a licence, the supervisory institution may restrict the right of a bank to provide one or several licensed financial services where this is requested by the bank or where it is not prepared to provide all licensed financial services. Restrictions on the provision of licensed financial services shall be removed where the bank submits an application and the documents and data evidencing that the bank is prepared to provide all licensed financial services. 2. A licence shall be issued for an indefinite period of time. 3. A bank shall be prohibited from transferring the rights granted by a licence or otherwise permit another person to provide licensed financial services not on behalf of the bank and not for the benefit of the bank. 4. A licence shall be issued to a bank registered in the Register of Legal Persons by the supervisory institution in accordance with the procedure set forth by laws and legal acts of the supervisory institution. 5. In order to obtain a licence, a bank shall submit to the supervisory institution an application, the documents and data specified by legal acts of the supervisory institution, including: 1) registered articles of association of the bank and certificate of registration; 2) documents proving that the bank has the minimum capital of a bank laid down by this Law; 3) a list of shareholders of the bank specifying the proportion of the bank’s authorised capital and/or voting rights acquired by each one of them; 4) upon the establishment of the bank, a list of elected (appointed) heads of the bank whose election or appointment is subject to an authorisation of the supervisory institution; 5) an operating plan of the bank for the first three years; 6) a description of the management and organisational structure; 7) a draft of the accounting policy and a detailed description of the accounting organisation; 8) documents and information evidencing that the bank has internal control system, personnel, technical, information and technological security means, premises and insurance of property ensuring safe and sound activities of the bank; 9) conclusions, authorisations or other documents issued by other State institutions on the preparedness to provide licensed financial services where this is required by other laws. 6. The supervisory institution shall have the right to carry out on-the-spot verification of the preparedness of a bank applying for the issuance of a licence to provide financial services. 7. Upon the request of the supervisory institution, State and municipal institutions as well as other persons must forthwith supply available information on founders, shareholders and heads of a bank, their financial situation, activities, discovered infringements of laws and other legal acts, conclusions of conducted verifications and examinations as well as other information required by the supervisory institution for the taking of a decision on the issuance of a licence. 8. The supervisory institution must examine submitted documents and take a decision on the issuance of a licence not later than within 3 months of the receipt of the application. Where the supervisory institution requests additional documents or data, the decision must be taken within 3 months of the receipt of the additional documents and data. A decision on the issuance of a licence shall, in any case, be taken within 12 months of the receipt of the application. 9. Articles of association, an operating plan, management and organisational structure, risk management system, accounting organisation, internal control system, technical, information and technological security means, premises, insurance of property of a bank applying for a licence must ensure safe and sound activities of the bank and comply with the relevant legal acts. The bank must also meet the requirements set by this Law, including the requirements set for the legal form, minimum capital of the bank, requirements for the registered office, shareholders of the bank, including the shareholders who have acquired a qualifying holding in the bank’s authorised capital and/or voting rights, heads of the bank, and must be prepared to safely and soundly provide financial services. 10. The supervisory institution may refuse to issue a licence where: 1) submitted documents do not meet the requirements set in this Law and legal acts of the supervisory institution, not all data specified by the legal acts or additionally required have been submitted or they are incorrect; 2) a bank does not meet the requirements set in paragraph 9 of this Article; 3) close links exist between the bank and other person, which would prevent the supervisory institution from effectively exercising the supervision of the bank; 4) close links exist between the bank and a person from a state other than a Member State of the European Union whose legal acts governing the activities of this person or difficulties in ensuring compliance with the said legal acts may prevent the supervisory institution from effectively exercising the supervision of the bank. 11. Close links shall be considered to exist between two or more persons where they are linked by: 1) direct or indirect ownership (by way of control of a proportion of the authorised capital and/or voting rights granting the right to control the activities and management of an undertaking) of 20 per cent or more of the undertaking’s authorised capital and/or voting rights or other real possibility to exercise influence over decisions on the activities of the undertaking; or 2) ownership of a proportion of the authorised capital and/or voting rights granting the right to control the activities of an undertaking; or 3) one and the same third party controlling their proportions of the authorised capital and/or voting rights granting the right to control the activities of an undertaking. 12. A decision taken to issue or not to issue a licence shall be notified to the Register of Legal Persons in accordance with the provisions of this Register and published in the supplement Informaciniai pranešimai to the official gazette Valstybės žinios. 13. A bank shall have the right to commence the provision of financial services only upon the issuance of a licence. 14. A bank holding a licence must always meet with the requirements set to obtain the licence. In the cases and according to the procedure set forth in this Law and legal acts of the supervisory institution, the bank must notify the supervisory institution of any changes in the data submitted to obtain the licence. Article 10. Withdrawal of a Licence 1. The grounds for the withdrawal of a licence shall be laid down by the Law on Financial Institutions. In addition to the grounds laid down in paragraph 2 of Article 10 of the Law on Financial Institutions, a licence may be withdrawn by a decision of the supervisory institution where: 1) a bank does not meet the requirements set for the granting of an authorisation to establish a bank or for the issuance of a licence; 2) a bank ceases to exist due to reorganisation or a decision is taken on liquidation thereof; 3) a bank does not pay in the first (advance) insurance premium in accordance with the Law on Insurance of Deposits and Liabilities to Investors where it must pay it or where insurance is terminated. 2. Withdrawal of a licence or suspension of validity thereof shall be notified to the bank and the Register of Legal Persons in the manner prescribed by provisions of this Register and published in the supplement Informaciniai pranešimai to the official gazette Valstybės žinios. 3. Reasons must be given for a decision of the supervisory institution on the withdrawal of a licence. 4. A licence may also be withdrawn or validity thereof suspended on the grounds and according to the procedure set forth in Chapter 10 of this Law. 5. Upon the withdrawal of a licence, a bank shall not have the right to provide financial services, except to the extent it is necessary to settle with the bank’s creditors, and a decision must be taken on the liquidation of the bank or opening of bankruptcy proceedings according to the procedure set forth in Chapters 11 and 12 of this Law. Article 11. Branches and Other Establishments of a Bank in the Republic of Lithuania 1. Articles of association of a bank, management and organisational structure, accounting organisation, security means, premises and insurance of property of a branch and other establishments of the bank providing financial services must ensure safe and sound activities of the bank and be in compliance with the relevant legal acts. 2. All establishments of a bank providing financial services must have communication facilities to transmit information on the operations carried out to the registered office of the bank in real time. 3. Upon the setting up of a branch or another establishment providing financial services, a bank must, within 15 days of its establishment, notify thereof the supervisory institution and submit to the supervisory institution the information and documents specified by legal acts. In the event of a change in any of the particulars communicated, the bank must, within 15 days of the change, notify thereof the supervisory institution and submit to the supervisory institution the information and documents specified by legal acts. Article 12. Representative Office of a Bank 1. A bank shall have the right to establish a representative office in the Republic of Lithuania and in foreign states. 2. A representative office of a bank shall not have the right to provide financial services. 3. Upon the establishment of a representative office, a bank must, not later than within 15 days of its establishment, notify thereof the supervisory institution and submit to the supervisory institution the information and documents specified by legal acts. In the event of a change in any of the particulars communicated, the bank must, within 15 days from the day of the change, notify thereof the supervisory institution and submit to the supervisory institution the information and documents established by legal acts. Article 13. Banks and Branches Thereof in Foreign States 1. A bank shall have the right to establish a bank in a foreign country, acquire a qualifying holding in the authorised capital and/or voting rights of a foreign bank or increase it so that the foreign bank would become controlled by it or establish a branch in a foreign state only upon obtaining an authorisation of the supervisory institution. 2. An authorisation to establish a bank in a foreign country, acquire a qualifying holding in the authorised capital and/or voting rights of a foreign bank or increase it so that the foreign bank would become controlled by it or establish a branch in the foreign country shall be issued by the supervisory institution according to the procedure set forth by laws and legal acts of the supervisory institution. 3. For an authorisation to be granted to establish a bank in a foreign country, acquire a qualifying holding of the authorised capital and/or voting rights of a foreign bank or increase it so that the foreign bank would become controlled by it, an application and the documents and data specified by legal acts of the supervisory institution as well as data on the founders (members) of a bank being established or of a bank whose part of the authorised capital and/or voting rights is acquired who hold a qualifying holding in the foreign bank’s authorised capital and/or voting rights, the financial situation, operating plan, organisational and management structure and heads of the bank shall be submitted. 4. For an authorisation to be granted to establish a branch in a foreign country, an application and the documents and data specified by legal acts of the supervisory institution as well as the documents and data evidencing that the branch meets the requirements set in paragraph 1 of Article 11 of this Law shall be submitted. 5. Upon the receipt of an application referred to in paragraphs 3 and 4 of this Article, the supervisory institution shall request the supervisory institution of the foreign state wherein a bank is being established or under whose jurisdiction a bank falls, where a proportion of the bank’s authorised capital and/or voting rights is being acquired, or wherein a branch of the bank is being established to provide information on the procedure for supervising banks and the requirements set for banks in that state as well as capabilities of the supervisory institution of the Republic of Lithuania to exercise its supervisory functions and obtain the required information, including the information required for the exercise of supervision on a consolidated basis. 6. The supervisory institution must examine submitted documents and take a decision on the granting of an authorisation within 3 months of the receipt of the application. 7. The supervisory institution may refuse to grant the authorisation referred to in this Article where: 1) submitted documents do not meet the requirements set in this Law and legal acts of the supervisory institution, not all data specified by the legal acts or additionally required have been submitted or they are incorrect; 2) a bank being established or a bank whose proportion of the authorised capital and/or voting rights is being acquired or a branch being established do not meet the requirements set by the supervisory institution or where such an establishment of the bank or of the branch or acquisition of the proportion of the bank’s authorised capital and/or voting rights may pose a threat to the  safety and soundness of activities of the bank; 3) information requested according to paragraph 5 of this Article is not received from the supervisory institution of a foreign country or it is possible to draw a conclusion on the basis of the submitted information that legal acts of the foreign state do not provide for a sufficient supervision of banks or restrict rights of the supervisory institution when exercising its supervisory functions and obtaining the required information, including the information required for the exercise of supervision on a consolidated basis. 8. In the cases and according to the procedure set forth by this Law and legal acts of the supervisory institution, a bank must notify the supervisory institution of any changes in the data submitted to obtain the authorisations referred to in this Article. 9. Where the supervisory institution establishes that after the granting of the authorisations referred to in this Article, circumstances may arise which would preclude the granting of an authorisation, the supervisory institution shall have the right, according to the procedure set forth in Chapter 10 of this Law, to take a decision on the prohibition of the activities of a branch, obligation to sell or otherwise transfer a proportion of the authorised capital and/or voting rights of a foreign bank and imposition of other sanctions to the bank. 10. This Article shall not be applied where a bank establishes a controlled bank in a Member State of the European Union, acquires a proportion of the authorised capital and/or voting rights of a foreign bank falling under the jurisdiction of a Member State of the European Union, establishes a branch in a Member State of the European Union or provides services without establishing the branch. Article 14. Right of a Bank to Provide Financial Services in the Members States of the European Union 1. A bank shall have the right to establish a branch in a Member State of the European Union according to the procedure set forth by this Article or provide financial services without establishing the branch. 2. Prior to establishing a branch in a Member State of the European Union, a bank shall notify thereof the supervisory institution by indicating the state in which it plans to establish a branch and submit the information specified by the supervisory institution on an operating plan of the branch to be established setting out, inter alia, the financial services to be provided, the organisational structure of the branch, the intended registered office (address) of the branch in the foreign state and the heads of the branch. 3. The supervisory institution must forward the information referred to in paragraph 2 of this Article and submitted by the bank as well as information on the bank’s equity capital and capital adequacy within 3 months to the supervisory institution of a foreign state. The supervisory institution shall have the right to refuse the forwarding of the information to the supervisory institution of the foreign state where the operating plan of a branch, organisational structure or heads thereof or the financial situation of the bank do not meet the requirements set by the supervisory institution to the activities envisaged. Reasons must be given for the refusal of the supervisory institution to forward the information, and a decision thereon must be taken within 3 months of the receipt of the information referred to paragraph 2 of this Article. The bank must be forthwith notified of the forwarding of the information or refusal to forward it to the supervisory institution of the foreign state. 4. Where a bank has already established at least one branch in a foreign state, the procedure set forth in this Article shall not be applied to the establishment of other branches thereof in that state. 5. In order to provide financial services in a foreign state without establishing a branch, a bank must notify thereof the supervisory institution. The notification shall set out the financial services to be provided. The supervisory institution must, within one month, forward or refuse to forward this information to the supervisory institution of a foreign country and notify thereof the bank. 6. In the event of a change in any of the particulars communicated to the supervisory institution when effecting the notification referred to paragraphs 2 or 5 of this Article, a bank must notify thereof the supervisory institution and the supervisory institution of a foreign country in advance, at least one month before making the change. The supervisory institution shall, within one month, forward the information on the planned changes to the supervisory institution of the foreign state or refuse to forward it where there are grounds referred to in paragraph 3 of this Law and notify thereof the bank. Upon the refusal of the supervisory institution to forward the information on the planned changes to the supervisory institution of the foreign state, the bank shall not have the right to effect these changes. 7. Legal acts of the supervisory institution may lay down the procedure for applying the provisions of this Article to a specialised bank authorised only to issue and administer electronic money. Article 15. Right of the Financial Undertakings Controlled by a Bank to Provide Financial Services in the Member States of the European Union 1. The right to establish a branch in a Member State of the European Union or provide financial services without establishing the branch according to the procedure set forth by Article 14 of this Law shall also be vested in a financial undertaking controlled by one or several banks and established in the Republic of Lithuania where according to legal acts of the Republic of Lithuania and establishment documents it has the right to engage in the provision of financial services and meets all of the following requirements: 1) the parent bank or banks of the financial undertaking hold a licence obtained according to the procedure set forth by this Law; 2) the financial undertaking is already engaged in the provision of the financial services in the Republic of Lithuania which are to be provided in the Member State of the European Union; 3) the parent bank or banks of the financial undertaking hold 90 per cent or more of  the authorised capital and/or voting rights of the financial undertaking; 4) the parent bank or banks of the financial undertaking satisfy the supervisory institution regarding the prudent management of the controlled financial undertaking and have declared, with the consent of the supervisory institution, that the parent bank or banks of the financial undertaking jointly and severally guarantee the commitments entered into by the controlled financial undertaking; 5) the controlled financial undertaking is covered by the consolidated supervision of the parent bank or banks. 2. When effecting a notification pursuant to paragraph 3 of Article 14 of this Law, the supervisory institution shall indicate therein, inter alia, whether the controlled financial undertaking meets the requirements set in paragraph 1 of this Article and submit information on the equity capital of the financial undertaking and consolidated equity capital of the parent bank and of the entire financial group. 3. A financial undertaking which is the subject of a notification effected according to the procedure set forth by this Article must submit to the supervisory institution the information specified by legal acts thereof and required to supervise the compliance with terms and conditions set in this Article. After the effecting of the notification, the capital of the financial undertaking may not be reduced, and the undertaking must ensure adequate management and organisational structure, accounting organisation and internal control system. Moreover, the supervisory institution shall have the right to inspect the financial undertaking according to the procedure set forth by this Law and to impose to it administrative penalties in accordance with the Code of Administrative Offences. Where the controlled financial undertaking no longer meets at least one requirement set in paragraph 1 of this Article, the supervisory institution shall notify thereof the supervisory institution of a foreign state. CHAPTER III ACTIVITIES OF FOREIGN BANKS IN THE REPUBLIC OF LITHUANIA Article 16. Activities of Foreign Banks in the Republic of Lithuania 1. Foreign banks may, according to the procedure set forth by this Law, establish banks in the Republic of Lithuania, acquire a proportion of the authorised capital and/or voting rights of the banks in operation and establish branches and representative offices; the foreign banks licensed in the Member States of the European Union shall also have the right to provide financial services without establishing a branch in the Republic of Lithuania pursuant to Article 20 of this Law. 2. A branch of a foreign bank may be established in the Republic of Lithuania according to the procedure set forth by this Law only upon obtaining an authorisation to establish the branch of the foreign bank. The branch of the foreign bank may commence the provision of financial services in the Republic of Lithuania only upon obtaining of a licence according to the procedure set forth by this Law. 3. Paragraph 2 of this Law shall not apply to the foreign banks licensed in the Member States of the European Union and establishing a branch in the Republic of Lithuania according to the procedure set forth by Article 20 of this Law. 4. A representative office of a foreign bank may be established in the Republic of Lithuania according to the procedure set forth by this Law only upon obtaining an authorisation to establish the representative office of the bank. This provision shall not be applied to the foreign banks licensed in the Member States of the European Union. 5. The requirements set for banks under this Law shall be applied to branches and representative offices of foreign banks and to activities, supervision, termination and restructuring thereof to the extent that they do not contradict the essence of a branch or representative office and this Law does not provide otherwise. 6. A branch of a foreign bank established in the Republic of Lithuania, when providing financial services in a place other than the registered office of the branch, need not establish the branch therein. Where the foreign bank establishes more than one branch in the Republic of Lithuania, it must specify one branch which would provide the supervisory institution with the information on all branches established in the Republic of Lithuania as specified in this Law and legal acts of the supervisory institution. 7. Where legal acts of a state other than a Member State of the European Union under whose jurisdiction falls a foreign bank establishing a bank in the Republic of Lithuania, acquiring a qualifying holding in the bank’s authorised capital and/or voting rights or establishing a branch or representative office provide for additional or stricter, as compared with this Law, requirements and terms set for Lithuanian banks wishing to pursue business in that state on the establishment of a bank, acquisition of a qualifying holding in the bank’s authorised capital and/or voting rights or the establishment of a branch or representative office, the supervisory institution shall have the right to require that the foreign bank wishing to pursue business in the Republic of Lithuania meet the same requirements and terms. Article 17. Establishment of a Bank and Acquisition of a Qualifying Holding in the Bank’s Authorised Capital and/or Voting Rights 1. An authorisation to establish a bank in the Republic of Lithuania shall be granted to a foreign bank and a licence shall be issued to an established bank according to the procedure set forth by Articles 8 and 9 of this Law. A consent to acquire a qualifying holding in a bank’s authorised capital and/or voting rights shall be granted to a foreign bank according to the procedure set forth by Article 25 of this Law. In addition to the grounds laid down in Articles 8 and 25 of this Law, the supervisory institution may also refuse to grant the authorisation to establish the bank or the consent to acquire a qualifying holding in the bank’s authorised capital and/or voting rights on the grounds laid down in paragraph 4 of this Article. 2. Prior to taking decisions on the granting of an authorisation to a foreign bank to establish a bank or a consent to acquire a qualifying holding in the bank’s authorised capital and/or voting rights or to increase it, the supervisory institution shall inquire the supervisory institution of a foreign state under whose jurisdiction the foreign bank falls whether it agrees that the foreign bank establishes a bank in the Republic of Lithuania or acquires a qualifying holding in the bank’s authorised capital and/or voting rights or increases it and request information on the equity capital and capital adequacy of the bank, operating plan, organisational and management structure and heads thereof, also information on requirements of the legal acts of that state set to foreign banks and on the procedure for exercising supervision of banks, including supervision on a consolidated basis, by the supervisory institution of the foreign state. 3. Opinion and information shall also be requested for of the appropriate institution of a foreign state exercising supervision of banks or other financial institutions or insurance undertakings in the cases where a bank whose establishment is subject to an authorisation or whose qualifying holding in the authorised capital and/or voting rights is acquired or increased is going to be: 1) controlled by a financial institution or an insurance undertaking licensed in a foreign state; 2) controlled by a foreign bank or by an undertaking controlled by a financial institution or an insurance undertaking licensed in a foreign state; 3) controlled by the same persons who control another foreign bank or a financial institution or an insurance undertaking licensed in a foreign state. 4. The supervisory institution may refuse to grant an authorisation to establish a bank or a consent to acquire a qualifying holding in the bank’s authorised capital and/or voting rights where: 1) the supervisory institution of a foreign state does not submit the requested information; 2) the supervisory institution of a foreign state objects to the establishment of a bank in the Republic of Lithuania by a foreign bank or acquisition of the qualifying holding in the bank’s authorised capital and/or voting rights or increase thereof or where the foreign state exercises insufficient supervision of banks, including supervision on a consolidated basis. Article 18. Granting of an Authorisation to Establish a Branch to a Foreign Bank 1. An authorisation to establish a branch of a foreign bank in the Republic of Lithuania shall be granted by the supervisory institution according to the procedure set forth by laws and legal acts of the supervisory institution. 2. In order to obtain an authorisation to establish a branch, a foreign bank shall submit an application and the documents and data specified by legal acts of the supervisory institution, including: 1) the foreign bank’s establishment documents, certificate of registration, licence or other documents granting the right to pursue the business of a credit institution; 2) decision of a body of the foreign bank to establish a branch in the Republic of Lithuania; 3) documents and data evidencing that the foreign bank meets the soundness criteria set by legal acts of the supervisory institution; 4) a framework for activities of the branch; 5) a written confirmation that the supervisory institution of a foreign state under whose jurisdiction the foreign bank falls does not object to the establishment of the branch in the Republic of Lithuania and information of this supervisory institution on the procedure for supervising foreign banks in that state, including branches thereof in foreign states, and the requirements set for banks as well as the obligation to exercise supervision of the branch established in the Republic of Lithuania and to provide information to the Lithuanian supervisory institution; 6) a list of heads of the branch and other persons whose election or appointment is subject to an authorisation of the supervisory institution. 3. The supervisory institution must examine submitted documents and take a decision on the granting of an authorisation to establish a branch within 3 months of the receipt of the application. 4. The supervisory institution may refuse to grant an authorisation to establish a branch where: 1) submitted documents do not meet the requirements set in this Law and legal acts of the supervisory institution, not all data specified by the legal acts or additionally required have been submitted or they are incorrect; 2) a foreign bank establishing a branch does not meet the soundness criteria set by legal acts of the supervisory institution or heads of the branch of the foreign bank do not meet the requirements set by the legal acts; 3) the supervisory institution of a foreign state under whose jurisdiction a foreign bank falls objects to the establishment of a branch in the Republic of Lithuania or where the procedure for supervising foreign banks in that state and the requirements set for banks do not adequately ensure safe and sound activities of the branch or may prevent the Lithuanian supervisory institution from exercising its functions; 4) the supervisory institution of a foreign state under whose jurisdiction a foreign bank falls, where the foreign bank establishes a branch thereof in the Republic of Lithuania, does not undertake to supervise the activities of the branch of the foreign bank in the Republic of Lithuania and provide information to the Lithuanian supervisory institution under the terms acceptable to it. 5. The supervisory institution shall give written notice to the Register of Legal Persons of a decision taken to grant or not to grant an authorisation to establish a branch. Article 19. Issuance of a Licence to a Branch of a Foreign Bank 1. A licence issued to a branch of a foreign bank shall be subject to the provisions of paragraphs 1-3 of Article 9 of this Law. 2. A licence shall be issued to a branch of a foreign bank registered in the Register of Legal Persons of the Republic of Lithuania by the supervisory institution according to the procedure set forth by laws and legal acts of the supervisory institution. 3. For a licence to be issued, an application and the documents and data specified by legal acts of the supervisory institution shall be submitted, including: 1) articles of association of a branch and certificate of registration; 2) a list of the heads of the branch appointed after the establishment of the branch and of other persons whose election or appointment is subject to an authorisation of the supervisory institution; 3) an operating plan of the branch for the first three years; 4) documents and data on the branch specified by subparagraphs 6-9 of paragraph 5 of Article 9 of this Law. 4. The supervisory institution shall have the right to carry out on-the-spot verification of the preparedness of a branch to commence the provision of financial services. 5. The supervisory institution must examine submitted documents and take a decision on the issuance of a licence within 3 months of the receipt of the application. 6. Regulations of a branch of a foreign bank, heads, operating plan, management and organisational structure, accounting organisation, internal control system, security means, premises and insurance of property thereof must ensure safe and sound activities of the branch and be in compliance with the relevant legal acts. The branch must also comply with other requirements set by this Law and be prepared to provide financial services in a safe and sound manner. 7. The supervisory institution may refuse to issue a licence where: 1) submitted documents do not meet the requirements set in this Law and legal acts of the supervisory institution, not all data specified by the legal acts or additionally required have been submitted or they are incorrect; 2) a branch does not meet the requirements set in paragraph 6 of this Article. 8. A decision taken to issue or not to issue a licence shall be notified to the Register of Legal Persons according to the procedure set forth by this Register and published in the supplement Informaciniai pranešimai to the official gazette Valstybės žinios. 9. A foreign bank which has been issued a licence must, under any circumstances, meet the requirements set to obtain the licence. In the cases and according to the procedure set forth by this Law and legal acts of the supervisory institution, the bank must notify the supervisory institution of any changes in the particulars submitted to obtain the authorisation to establish a branch and to obtain the licence. 10. A licence shall be withdrawn by a decision of the supervisory institution on the grounds and according to the procedure set forth by Article 10 of this Law, also where the bank which has established a branch is being wound up or bankruptcy proceedings have been opened against it. Article 20. Right of Foreign Banks Licensed in the Member States of the European Union to Establish a Branch in the Republic of Lithuania or to Provide Financial Services without Establishing the Branch 1. A foreign bank licensed in a Member State of the European Union may, according to the procedure set forth in this Article, establish a branch in the Republic of Lithuania or provide financial services without establishing the branch. The right to provide financial services without establishing a branch shall not entitle a foreign bank licensed in a Member State of the European Union to engage in the permanent provision of financial services in the Republic of Lithuania. 2. A foreign bank licensed in a Member State of the European Union may establish a branch in the Republic of Lithuania and provide the financial services which the foreign bank has the right to provide according to an authorisation granted or a licence issued to it by the supervisory institution of a foreign state where: 1) the supervisory institution has received from the supervisory institution of a foreign state under whose jurisdiction the foreign bank falls a notification containing information on an operating plan of the branch setting out, inter alia, the financial services to be provided, the organisational structure of the branch, the intended registered office (address) of the branch in the Republic of Lithuania; the heads of the branch; the equity capital and capital adequacy of the bank; 2) a notification has been received from the supervisory institution on the preparedness to exercise supervision and, where necessary, information on the requirements set by legal acts for the protection of public interests and binding on the branch which is engaged in the provision of financial services in the Republic of Lithuania. 3. A branch of a foreign bank licensed in a Member State of the European Union may be established and commence its activities upon the receipt by the foreign bank of a notification referred to in subparagraph 2 of paragraph 2 of this Article, and where no notification is received – 2 months from the receipt of the information referred to in subparagraph 1 of paragraph 2 of this Article by the Lithuanian supervisory institution from the supervisory institution of the foreign state. 4. Where a foreign bank referred to in paragraph 1 of this Article has already established at least one branch in the Republic of Lithuania, the procedure set forth by this Article shall not be applied to the establishment of other branches thereof. 5. A foreign bank licensed in a Member State of the European Union may commence the provision of financial services in the Republic of Lithuania without establishing a branch from the receipt of a notification setting out the financial services to be provided by the Lithuanian supervisory institution from the supervisory institution of a foreign state under whose jurisdiction the foreign bank falls. 6. In the event of a change in any of the particulars on the operating plan of a branch, the organisational structure of the branch, the office (address) of the branch in the Republic of Lithuania or the heads of the branch communicated to the supervisory institution pursuant to subparagraph 1 of paragraph 2 of this Article, a foreign bank must notify thereof the Lithuanian supervisory institution in advance, at least one month before making the change. Article 21. Activities Carried on in the Republic of Lithuania by the Financial Undertakings which are Controlled by the Foreign Banks Licensed in the Member States of the European Union 1. A financial undertaking which is controlled by one or several foreign banks licensed in a Member State of the European Union shall have the right to establish a branch in the Republic of Lithuania or provide financial services without establishing a branch according to the procedure set forth by Article 20 of this Law, provided it has the right to engage in the provision of financial services in compliance with legal acts of the foreign state and its establishment documents and fulfils all of the following conditions: 1) the parent bank or banks of the financial undertaking have obtained an authorisation to pursue the business of a credit institution in a foreign state whose legal acts regulate the activities of an controlled financial undertaking; 2) the financial undertaking is already engaged in a Member State of the European Union in the provision of the financial services to be provided in the Republic of Lithuania; 3) the parent bank or banks of the financial undertaking hold 90 per cent or more of the authorised capital and/or voting rights of the financial undertaking; 4) the parent bank or banks of the financial undertaking satisfy the supervisory institution of a foreign state regarding the prudent management of the controlled financial undertaking and have declared, with the consent of the supervisory institution of the foreign state, that the parent bank or banks of the financial undertaking jointly and severally guarantee the commitments entered into by the controlled financial undertaking; 5) the controlled financial undertaking is supervised by exercising the supervision of the parent bank or banks on a consolidated basis. 2. A financial undertaking referred to paragraph 1 of this Article may establish a branch or provide financial services in the Republic of Lithuania without establishing a branch where the supervisory institution of a foreign state, when effecting a notification pursuant to subparagraph 1 of paragraph 2 of Article 20 of this Law, indicates, inter alia, whether the controlled financial undertaking meets the requirements set in paragraph 1 of this Article and provides information on the equity capital of the financial undertaking and the consolidated equity capital of the parent bank and the entire financial group. 3. Where the supervisory institution of a foreign state notifies the Lithuanian supervisory institution that a controlled financial undertaking no longer satisfies at least one of the conditions referred to in paragraph 1 of this Article, the financial undertaking shall thereupon be applied all requirements set by laws of the Republic of Lithuania for the persons providing such financial services. 4. Provisions of this Article shall apply mutatis mutandis to the financial undertakings controlled the financial undertakings controlled by the foreign banks licensed in the Member States of the European Union. Article 22. Representative Office of a Foreign Bank in the Republic of Lithuania 1. A representative office of a foreign bank shall not have the right to provide financial services in the Republic of Lithuania. 2. An authorisation to establish a representative office of a foreign bank in the Republic of Lithuania shall be granted by the supervisory institution according to the procedure set forth by laws and legal acts of the supervisory institution. 3. In order to obtain an authorisation to establish a representative office, a foreign bank shall submit an application and the documents and data specified by legal acts of the supervisory institution, including: 1) the establishment documents of the foreign bank, certificate of registration, licence or other documents granting the right to pursue the business of a credit institution; 2) a decision of the management body of the foreign bank to est …