Chapter 1

Chapter 1 REPUBLIC OF LITHUANIA LAW ON THE BANK OF LITHUANIA 1 December 1994  No I-678 Vilnius (As last amended on 15 December 2011 ─ No XI-1800) CHAPTER 1 GENERAL PROVISIONS Version of Article 1 until the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: Article 1. The Bank of Lithuania 1. The central bank of the Republic of Lithuania shall be the Bank of Lithuania, belonging by the right of ownership to the State of Lithuania. The Bank of Lithuania shall form a part of the European System of Central Banks. The regulation of the activities of the Bank of Lithuania has been harmonised with the legal acts of the European Union, specified in the Annex to this Law. 2. The Bank of Lithuania shall manage, use and dispose of assets to the extent, in the manner and according to the terms prescribed by this Law. 3. The Bank of Lithuania shall be established and liquidated by the Seimas. Version of Article 1 from the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: Article 1. The Bank of Lithuania 1. The central bank of the Republic of Lithuania shall be the Bank of Lithuania, belonging by the right of ownership to the State of Lithuania. The Bank of Lithuania shall form an integral part of the European System of Central Banks and shall achieve the objectives and carry out the tasks of the European System of Central Banks in accordance with the guidelines and instructions of the European Central Bank. The Bank of Lithuania shall perform its functions and carry out its activities to the extent that it does not interfere with the objectives of the European Central Bank and of the European System of Central Banks and complies with the legal acts of the European Union, including the legal acts of the European Central Bank. The regulation of the activities of the Bank of Lithuania has been harmonised with the legal acts of the European Union, specified in the Annex to this Law. 2. The Bank of Lithuania shall manage, use and dispose of assets to the extent, in the manner and according to the terms prescribed by the European Union law and this Law. 3. The Bank of Lithuania shall be established by the Seimas. Article 2. Legal Status of the Bank of Lithuania 1. The Bank of Lithuania shall be a legal person. 2. The Bank of Lithuania shall have a seal bearing the State Emblem of Lithuania and words ‘Lietuvos bankas’ (‘Bank of Lithuania’). 3. The registered office of the Bank of Lithuania shall be at 6 Gedimino Avenue, Vilnius. 4. The State of Lithuania shall not be liable for the obligations of the Bank of Lithuania, and the Bank of Lithuania shall not be liable for the obligations of the State of Lithuania. Article 3. Independence of the Bank of Lithuania 1. The Bank of Lithuania shall be governed by the Treaty on the Functioning of the European Union, the Protocol on the Statute of the European System of Central Banks and of the European Central Bank annexed to the Treaty on the Functioning of the European Union, as well as other legal acts of the European Union. The Bank of Lithuania shall be also governed by laws and other legal acts of the Republic of Lithuania in as much as they are in compliance with the Treaty on the Functioning of the European Union and the Protocol on the Statute of the European System of Central Banks and of the European Central Bank annexed to the Treaty on the Functioning of the European Union. In the event of a conflict between the legal acts of the Republic of Lithuania and the international treaties of the Republic of Lithuania, the international treaties of the Republic of Lithuania shall take precedence. 2. When implementing the objectives and performing its functions as well as pursuing the activities necessary for that, neither the Bank of Lithuania, nor the Chairperson of the Board of the Bank of Lithuania, the Deputy Chairpersons, the Members of the Board, nor other members of the staff of the Bank of Lithuania (hereinafter: ‘the Bank of Lithuania staff’) must seek and take instructions from the institutions and bodies of the European Union, the governments of the Member States of the European Union or any other institutions or bodies. The Government of the Republic of Lithuania and State institutions must respect the independence of the Bank of Lithuania and must not seek to influence the Bank of Lithuania and its staff in discharge of their duties. Article 4. Branches, Representative Offices, Institutions and Enterprises of the Bank of Lithuania The Bank of Lithuania shall have the right to establish branches, representative offices, institutions and enterprises, to be a shareholder or stakeholder in other institutions and enterprises in the Republic of Lithuania and foreign states, provided this is needed to carry out its functions. Article 5. Foreign Relations of the Bank of Lithuania and its Representation of the State of Lithuania 1. The Bank of Lithuania shall maintain relations with foreign and international financial institutions and shall conclude agreements with them. 2. The Bank of Lithuania may represent the State of Lithuania in international financial institutions. Version of the title of Article 6 until the date from which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: Article 6. The Exclusive Right of the Bank of Lithuania to Issue Currency Version of the title of Article 6 from the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: Article 6. Issue of Banknotes and Coins Version of paragraph 1 until the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: 1. Only the Bank of Lithuania shall have the right to issue currency. It shall: 1)   put into and withdraw from circulation the currency of the Republic of Lithuania according to the procedure established by law; and 2)   establish denominations, distinctive, security and acceptance features of the currency of the Republic of Lithuania, withdraw banknotes and coins from circulation and replace them with other banknotes and coins by announcing this publicly, organise the production of the currency, its transportation and storage, establish procedures for withdrawing worn and damaged currency from circulation and for replacing and destroying the said currency, the arrangements for the reproduction of the banknotes and coins of the Republic of Lithuania, make up reserve funds of banknotes and coins, and perform the expert examination of the currency of the Republic of Lithuania and the banknotes and coins of the European Union’s single currency. Version of paragraph 1 from the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: 1. The Bank of Lithuania shall have the right to issue banknotes and coins in compliance with the requirements of the Treaty on the Functioning of the European Union. 2. The Bank of Lithuania is hereby designated as the National Analysis Centre (NAC) and the Coin National Analysis Centre (CNAC) in the Republic of Lithuania. 3. The Bank of Lithuania shall establish for credit institutions and payment institutions as well as other economic entities, which are involved in the collecting, handling and recycling of banknotes and coins, the requirements of verifying authenticity of the banknotes and coins of the money of the Republic of Lithuania and of the single currency of the European Union and of ensuring detection of counterfeit money and shall supervise the implementation of these requirements. Version of Article 7 until the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: Article 7. The Primary Objective of the Bank of Lithuania 1. The primary objective of the Bank of Lithuania shall be to maintain price stability. 2. The Bank of Lithuania shall, within the range of its competence, support the economic policy carried out by the Government of the Republic of Lithuania, without prejudice to the primary objective of the Bank of Lithuania. Version of Article 7 from the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: Article 7. The Primary Objective of the Bank of Lithuania 1. In accordance with the Treaty on the Functioning of the European Union, the primary objective of the Bank of Lithuania shall be to maintain price stability. 2. Without prejudice to its primary objective, the Bank of Lithuania shall, within the range of its competence, support the general economic policies in the European Union with a view to contributing to the achievement of the objectives of the European Union established in the Treaty on the Functioning of the European Union, and support the economic policy carried out by the Government of the Republic of Lithuania, without prejudice to the primary objective of the Bank of Lithuania and to the extent this meets the objectives of the European Central Bank and of the European System of Central Banks. Version of Article 8 until the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: Article 8. Functions and Activities of the Bank of Lithuania 1. In implementing its primary objective, the Bank of Lithuania shall perform the following functions: 1) issue the currency of the Republic of Lithuania; 2) formulate and implement monetary policy; 3) determine the Litas exchange rate regulation system and announce the official exchange rate of the Litas; 4) manage, use and dispose of foreign reserves of the Bank of Lithuania; 5) act as a State Treasury agent; 6) perform the financial market supervision; 7) settle disputes between the consumers and financial market participants out of court; 8) encourage stable and efficient operation of payment and securities settlement systems; and 9) collect monetary, banking and balance of payments statistics, as well as data on Lithuanian financial and related statistics, implement standards on the collection, reporting and dissemination of the said statistics, and compile the balance of payments of the Republic of Lithuania. 2. The Bank of Lithuania shall carry out activities necessary for the implementation of the functions laid down in Paragraph 1 of this Article and for the development and maintenance of the infrastructure needed for their implementation. Version of Article 8 from the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: Article 8. Functions and Activities of the Bank of Lithuania 1. In implementing the provisions of the Treaty on the Functioning of the European Union and acting as an integral part of the European System of Central Banks, the Bank of Lithuania shall perform the following functions: 1) issue banknotes and perform other related activities; 2) implement monetary policy; 3) manage, use and dispose of the official foreign reserves of the Bank of Lithuania (hereinafter: ‘foreign reserves’); 4) encourage stable and efficient operation of payment and securities settlement systems; 5) collect statistical information necessary for the performance of the tasks of the European System of Central Banks from state and municipal institutions and economic entities. 2. In addition, the Bank of Lithuania shall: 1) act as a State Treasury agent according to the agreement with the Ministry of Finance of the Republic of Lithuania (hereinafter: ‘the Ministry of Finance’); 2) perform the financial market supervision; 3) settle disputes between the consumers and financial market participants out of court; 4) collect statistical information necessary for the performance of the functions of the Bank of Lithuania that are not related to the activities of the European System of Central Banks from state and municipal institutions and economic entities, set the procedures for the collection, compilation and dissemination of the said statistics, and compile the balance of payments, the international investment position and financial accounts of the Republic of Lithuania; 5) without prejudice to the requirements derived from its participation in the European System of Central Banks and notably those resulting from operations on behalf of public entities, be able to grant loans, secured by adequate collateral for the Bank of Lithuania, to credit institutions registered in the Republic of Lithuania in accordance with the procedure, conditions and terms established by the Bank of Lithuania; 6) issue coins in compliance with the requirements of the Treaty on the Functioning of the European Union and perform other related activities. 3. The Bank of Lithuania shall carry out the activities necessary for the implementation of the functions laid down in Paragraphs 1 and 2 of this Article and for the development and maintenance of the infrastructure needed for their implementation. 4. The Bank of Lithuania, in the performance of its functions and activities, shall take part in the maintenance of the soundness and stability of financial system and shall take appropriate measures within its competence. Article 9. Legal Acts of the Bank of Lithuania Within their competence, the Board of the Bank of Lithuania shall adopt resolutions, and the Chairperson of the Board of the Bank of Lithuania shall issue orders. CHAPTER 2 ORGANISATION AND MANAGEMENT OF THE ACTIVITIES OF THE BANK OF LITHUANIA Article 10. The Board of the Bank of Lithuania 1. The Bank of Lithuania shall be governed by the Board of the Bank of Lithuania. The Board shall be comprised of a Chairperson, two Deputy Chairpersons, and two Members of the Board. 2. Only citizens of the Republic of Lithuania may be the Chairperson, Deputy Chairpersons, and Members of the Board of the Bank of Lithuania, provided they have not reached the age of 65 by the date of their appointment. 3. The Chairperson, Deputy Chairpersons and Members of the Board of the Bank of Lithuania may participate in the management of international financial institutions of which the Republic of Lithuania or the Bank of Lithuania is a member. 4. The Chairperson of the Board of the Bank of Lithuania shall be appointed for a term of five years and dismissed prior to the expiration of his or her term of office by the Seimas on the recommendation of the President of the Republic. *5. Deputy Chairpersons and Members of the Board of the Bank of Lithuania shall be appointed for a term of six years and dismissed prior to the expiration of their term of office by the President of the Republic on the recommendation of the Chairperson of the Board of the Bank of Lithuania. 6. The Chairperson of the Board of the Bank of Lithuania may be appointed to his position for unlimited number of terms of office. The Deputy Chairpersons and Members of the Board may be appointed to their respective positions for no more than two consecutive terms. *7. The amount of salaries of Deputy Chairpersons and Members of the Board of the Bank of Lithuania, without exceeding 90 per cent of the amount of the salary of the Chairperson of the Board of the Bank of Lithuania, shall be established by the Board of the Bank of Lithuania. *Note: it shall be applied to Deputy Chairpersons and Members of the Board of the Bank of Lithuania appointed after the entry into force of this Law. Article 11. Functions and Activities of the Board of the Bank of Lithuania 1. The Board of the Bank of Lithuania shall: 1) develop the monetary policy programme of the Bank of Lithuania; 2) establish procedures for rediscount, loans, deposits, open market operations carried out at the Bank of Lithuania, and the procedures for the formation and holding of required reserves of credit institutions with the Bank of Lithuania, as well as for the application of other monetary policy instruments; 3) establish the Litas exchange rate regulation system and the procedure for the calculation of the official Litas exchange rate; Subparagraphs 1, 2 and 3 shall be repealed on the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union. Version of subparagraph 4 until the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: 4) establish the procedures and principles for the management, use and disposal of foreign reserves of the Bank of Lithuania; Version of subparagraph 4 from the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: 4) establish the principles and procedures for the management, use and disposal of foreign reserves that in accordance with the procedure laid down by legal acts of the European Union have not been transferred to the European Central Bank, in compliance with the requirements of the European Central Bank applicable to foreign reserves of the national central banks; 5) establish procedures for the issue of and trading in debt securities issued by the Bank of Lithuania; Subparagraph 5 shall be repealed on the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union. 6) establish the financial market supervision policy; 7) adopt resolutions; Version of subparagraphs 8 and 9 until the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: 8) decide on issues concerning the participation of the Bank of Lithuania in international banks and other international financial institutions, provided this is related to the functions of the Bank of Lithuania; 9) decide on matters of issue and withdrawal from circulation of the currency and other issues related thereto, laid down in Article 6 of this Law; Version of subparagraphs 8 and 9 from the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: 8) upon the consent of the European Central Bank, decide on issues concerning the participation of the Bank of Lithuania in international monetary institutions; 9) decide on matters of issue and withdrawal of the banknotes and coins and other issues related thereto in compliance with the requirements of the Treaty on the Functioning of the European Union; 10) establish branches, representative offices, enterprises and institutions of the Bank of Lithuania for carrying out its functions and decide on the acquisition of shares of (stakes in) enterprises and institutions related to the functions of the Bank of Lithuania; 11) approve the structure of the Bank of Lithuania; 12) establish the principles of service (work) and the status of the staff of the Bank of Lithuania; approve the rules of procedure of the Board; 13) apply to the financial market participants defined in Article 42(1) (hereinafter: ‘financial market participants under supervision’) the enforcement measures established by laws as well as the requirements, obligations, prohibitions and other mandatory measures established by the legislation regulating financial market; 14) decide on appealing to court regarding initiation of bankruptcy proceedings against financial market participants under supervision; 15) approve the Bank of Lithuania budget; Version of subparagraphs 16 and 17 until the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in Article 122 (2) of the Treaty establishing the European Community: 16) establish the financial accounting policy of the Bank of Lithuania, approve a set of annual financial statements and the allocation of profit for the financial year; 17) establish procedures for the management, use, and disposal of the assets of the Bank of Lithuania, as well as procurement procedures; Version of subparagraphs 16 and 17 from the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: 16) in compliance with the requirements of the legal acts of the European Central Bank, establish the financial accounting policy of the Bank of Lithuania, approve a set of annual financial statements and the allocation of profit for the financial year, as established in Paragraph 3 of Article 23 of this Law; 17) establish procedures for the management, use and disposal of the assets of the Bank of Lithuania, following the main principle of achieving the objectives and carrying out the tasks of the European System of Central Banks using the most economical, effective and productive means, and establish procurement procedures; 18) resolve issues pertaining to the issuance of licenses, permits, consents, approvals, non-objections established by laws regulating the financial market as well as suspension of their validity, cancelation of suspension of their validity and revocation (termination of their validity); 19) take decisions as regards the disputes between the consumers and the financial market participants; and 20) perform other activities related to the implementation of the primary objective of the Bank of Lithuania. Version of paragraph 2 until the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: 2. The Board of the Bank of Lithuania may authorise the Chairperson of the Board to carry out a part of its functions provided for by subparagraphs 5, 8, 11, 13, 17, 18 and 19 of Paragraph 1 of this Article. Version of paragraph 2 from the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: 2. The Board of the Bank of Lithuania may authorise the Chairperson of the Board to carry out a part of its functions, except the functions provided for by subparagraphs 4, 6, 7, 9, 10, 12, 13, 14, 15, 16, 18 and 19 of Paragraph 1 of this Article. 3. The Board of the Bank of Lithuania may authorise the structural units of the Bank of Lithuania to carry out all functions, or a part thereof, provided for by subparagraphs 13, 18 and 19 of Paragraph 1 of this Article, if laws do not provide otherwise. Article 12. Dismissal of the Members of the Board of the Bank of Lithuania 1. The Chairperson of the Board of the Bank of Lithuania, Deputy Chairpersons and Members thereof shall be dismissed prior to the expiration of their term of office only if they do not fulfil the conditions required for the performance of their duties or they have been found guilty of serious misconduct. 2. A decision regarding the dismissal of the Chairperson of the Board of the Bank of Lithuania on the grounds provided for in Paragraph 1 of this Article shall be made by the Seimas of the Republic of Lithuania on the recommendation of the President of the Republic; a decision regarding the dismissal of Deputy Chairpersons and Members of the Board shall be made by the President of the Republic on the recommendation of the Chairperson of the Board of the Bank of Lithuania. 3. A decision regarding a dismissal shall be adopted within one month from the date of submission of the recommendation thereon to the Seimas of the Republic of Lithuania or the President of the Republic. In the event a decision is not adopted within the above time limit, the person in question shall continue to perform his or her duties. 4. The Chairperson of the Board of the Bank of Lithuania shall have the right to refer to the Court of Justice of the European Union a decision regarding his dismissal prior to the expiration of his term of office within two months from the announcement of the decision or from the receipt of the notification thereof or, if the above has not occurred, from the date when the decision became known to the plaintiff on the grounds that the decision was in breach of the Treaty on the Functioning of the European Union or any other legal provision related to the application of the above Treaty. The Deputy Chairpersons and the Members of the Board of the Bank of Lithuania shall have the right to appeal to Vilnius Regional Court against a decision regarding a dismissal prior to the expiration of their terms of office. Article 13. Resignation of the Members of the Board of the Bank of Lithuania 1. The Chairperson of the Board of the Bank of Lithuania may resign from his or her post upon submitting a resignation request to the President of the Republic of Lithuania; Deputy Chairpersons and Members of the Board may resign upon submitting resignation requests to the Chairperson of the Board. 2. The resignation request submitted by the Chairperson of the Board shall be considered by the Seimas and requests of Deputy Chairpersons and Members of the Board shall be considered by the President of the Republic. 3. A decision regarding the resignation shall be adopted within one month from the date of receipt of a resignation request. 4. In the event a decision is not adopted during the time period indicated in Paragraph 3 of this Article, the Chairperson of the Board, Deputy Chairpersons and Members of the Board shall be considered to have resigned after one month from the day of filing such request. 5. In the event a decision to decline a request is adopted, the Chairperson of the Board, Deputy Chairpersons and Members of the Board shall be regarded to have resigned after one month from the date of the adoption of the above decision if they submit a request confirming their previous request within two weeks after the adoption of the decision to decline the request. Article 14. Meetings of the Board of the Bank of Lithuania 1. Meetings of the Board of the Bank of Lithuania shall be held as necessary, but at least once a month. Procedures for the arrangement of Board meetings shall be established by the rules of procedure of the Board of the Bank of Lithuania. 2. Meetings of the Board of the Bank of Lithuania shall be considered valid if at least three members of the Board are present. Decisions of the Board shall be adopted by a majority of at least three votes. 3. Meetings of the Board of the Bank of Lithuania shall be presided over by the Chairperson of the Board or by one of the Deputy Chairpersons in accordance with the procedure established by the rules of procedure of the Board. 4. Decisions of the Board of the Bank of Lithuania shall be implemented by resolutions thereof, or by orders of the Chairperson of the Board. Article 15. Voting Right Restriction for the Members of the Board of the Bank of Lithuania Where an issue considered during a meeting of the Board is related to the private interests of a Member of the Board, involving the conflict between public and private interests, the Member of the Board concerned shall, prior to the discussion of the above issue, present a written notice thereon and shall not have the right to participate in the discussion of the said issue and in the adoption of a decision thereon. Article 16. Work Restriction to the Members of the Board of the Bank of Lithuania 1. The Chairperson, Deputy Chairpersons and Members of the Board of the Bank of Lithuania may only be employed at the Bank of Lithuania and may not engage in any other activities that would cause a conflict of private and public interests. The Board of the Bank of Lithuania may give them consent to engage in research and pedagogical activities. 2. The Chairperson, Deputy Chairpersons, and Members of the Board of the Bank of Lithuania must, during the first year after their duties have ceased, avoid any conflict of private and public interests that would be caused by their new activities. When intending to engage in the activities that the above-mentioned persons consider might cause a conflict of private and public interests, they shall inform in writing the Board of the Bank of Lithuania and shall seek its opinion before committing themselves. *3. Upon the expiration of the term of office, the Chairperson, Deputy Chairpersons, and Members of the Board of the Bank of Lithuania shall be paid a severance pay. The pay shall amount to the number of the average monthly salaries, paid to them, corresponding to the years of their uninterrupted term of office at the Bank of Lithuania, but shall not exceed five average monthly salaries. The severance pay shall not be paid if they have stopped performing their duties because they have been found guilty of serious misconduct. *Note: it shall be applied to the Chairperson of the Board of the Bank of Lithuania who commences his term of office on the day of the entry into force of this Law and afterwards as well as to Deputy Chairpersons and Members of the Board of the Bank of Lithuania appointed after the entry into force of this Law. Article 17. Chairperson of the Board of the Bank of Lithuania 1. The Chairperson of the Board of the Bank of Lithuania shall: 1) organise the work of the Bank of Lithuania; 2) represent the Bank of Lithuania in the Republic of Lithuania and abroad without any special power of attorney; 3) conclude employment contracts with staff members and heads of the branches, representative offices, institutions and enterprises of the Bank of Lithuania, provide incentives for distinguished employees and impose disciplinary penalties; 4) approve the distribution of duties between the Chairperson, Deputy Chairpersons and Members of the Board; 5) issue powers of attorney; 6) approve regulations of the structural divisions of the Bank of Lithuania; and 7) perform other functions delegated by the Board of the Bank of Lithuania. 2. In the event of the absence of the Chairperson of the Board of the Bank of Lithuania, his or her duties shall be performed by one of the Deputy Chairpersons or one of the Members of the Board on a mandate from the Chairperson of the Board of the Bank of Lithuania. 3. The Chairperson of the Board of the Bank of Lithuania, his or her deputy or a Member of the Board shall have the right to attend sittings of the Government of the Republic of Lithuania in a deliberative capacity. *4. The salary of the Chairperson of the Board of the Bank shall be equal to five average monthly salaries of the employees of monetary intermediation institutions announced by the Department of Statistics to the Government of the Republic of Lithuania. *5. In order to finance expenses related to the representation both in Lithuania and abroad, every month the Chairperson of the Board of the Bank of Lithuania shall be granted a sum accounting for 15 percent of his or her salary without justifying expenses. *Note: it shall be applied to the Chairperson of the Board of the Bank of Lithuania who commences his term of office on the day of the entry into force of this Law and afterwards. Article 18. Staff of the Bank of Lithuania 1. The staff of the Bank of Lithuania shall perform the functions of the Bank of Lithuania laid down in this Law by implementing resolutions of the Board of the Bank of Lithuania and orders of the Chairperson, and by observing the regulations of a relevant structural division and employment contracts. 2. Laws regulating labour relations shall be applicable to the staff of the Bank of Lithuania. 3. The staff of the Bank of Lithuania may only be employed at the Bank of Lithuania. Upon the consent of the Board of the Bank of Lithuania, they may also be employed elsewhere. 4. The Board of the Bank of Lithuania shall have the right to delegate a staff member for temporary work at the European Union and international institutions and bodies or institutions or bodies of another state at the request of the staff member and at its own initiative, subject to the consent of such staff member, without cancelling the employment contract and suspending the counting of the period of employment at the Bank of Lithuania, without changing the terms of remuneration set in the employment contract or by changing said terms by mutual agreement between the parties of the employment contract. At the request of the staff member and subject to the consent of the Board of the Bank of Lithuania, such staff member may take up employment for a certain period of time at the institutions and bodies mentioned herein by requesting for a leave of absence, without suspending the counting of the period of employment at the Bank of Lithuania. 5. The staff of the Bank of Lithuania may be granted financial services pursuant to the procedure and terms established by the Board of the Bank of Lithuania. 6. The Bank of Lithuania shall disclose information concerning a staff member only in the cases and pursuant to the procedure provided for by law. Article 181. Requirements for the Avoidance of a Conflict of Public and Private Interests Applicable to the Staff of the Bank of Lithuania 1. The Staff of the Bank of Lithuania must avoid engaging in the activities that would cause a conflict of public and private interests 2. The Board of the Bank of Lithuania, in ensuring the lawful interests of the Bank of Lithuania and in order to ascertain that the staff of the Bank of Lithuania avoid a conflict of public and private interests and do not use or allow the use by third parties of the information constituting a state, official and bank secret in their own or the third parties’ interests, may establish the kinds of information on personal and family financial operations to be disclosed by the Bank of Lithuania staff to the Bank of Lithuania, and may establish restrictions on entering into certain financial transactions or engaging in certain activities. Article 19. Responsibility in Protecting Secrets 1. The staff of the Bank of Lithuania as well as other persons, who have been granted the right of access to the information constituting state, official and bank secrets or who have come into possession of such information without such a right, shall protect the information constituting state, official and bank secrets.  This obligation shall continue to exist after the end of an employment relationship with the Bank of Lithuania or after the end of any other service or function related to the Bank of Lithuania. Version of subparagraphs 2, 3 and 4 until the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: 2. A secret of the Bank shall be information used in the activities of the Bank of Lithuania that does not constitute a state or official secret with respect to its significance, the illegal disclosure or loss of which could have negative consequences on the functioning of the Bank of Lithuania and its activities, and could harm legitimate interests of other persons. 3. Detailed lists of information constituting state, official and bank secrets shall be approved by the Chairperson of the Board of the Bank of Lithuania. Detailed lists of information constituting state and official secrets shall be approved and amended pursuant to the procedure laid down in the Republic of Lithuania Law on State and Official Secrets. 4. Access and usage procedures in relation to information constituting a bank secret shall be approved by the Chairperson of the Board of the Bank of Lithuania. Version of subparagraphs 2, 3 and 4 from the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: 2. A secret of the Bank shall be any non-public information related to the European System of Central Banks and any other information used in the activities of the Bank of Lithuania that does not constitute a state or official secret with respect to its significance, the illegal disclosure or loss of which could nevertheless have negative consequences on the functioning of the Bank of Lithuania and its activities, and could harm legitimate interests of other persons. 3. The Chairperson of the Board of the Bank of Lithuania shall approve detailed lists of information constituting state and official secrets. Detailed lists of information constituting state and official secrets shall be approved and amended in accordance with the procedure laid down by the Republic of Lithuania Law on State and Official Secrets. 4. Usage procedures in relation to information constituting a bank secret shall be approved by the Chairperson of the Board of the Bank of Lithuania. 5. Protection of information constituting a bank secret in court proceedings shall be subject to the provisions of the laws of the Republic of Lithuania ensuring protection of commercial secrets. CHAPTER 3 FINANCES OF THE BANK OF LITHUANIA Article 20. Capital of the Bank of Lithuania 1. The capital of the Bank of Lithuania shall be comprised of its authorised capital and reserve capital. Version of paragraph 2 until the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: 2.   The authorised capital shall be LTL 200 million. It shall be accumulated from the funds of the State of Lithuania and (or) profit of the Bank of Lithuania. Version of paragraph 2 from the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: 2. The authorised capital shall be EUR 60 million. It shall be accumulated from the funds of the State of Lithuania and (or) profit of the Bank of Lithuania. 3. The reserve capital shall be accumulated from the profit of the Bank of Lithuania. Article 21. Budget of the Bank of Lithuania The Bank of Lithuania shall plan its annual budget taking into account the needs related to the implementation of the objectives and functions, as well as its activities prescribed by this Law. The budget shall consist of operating expenses and investment in tangible and intangible assets. Article 22. Profit (Loss) of the Bank of Lithuania The profit (loss) of the Bank of Lithuania for the financial year shall be calculated by deducting expenses from income. Article 23. Coverage of the Loss and Allocation of the Profit of the Bank of Lithuania 1. After the set of financial statements of the last ended financial year is approved in accordance with the procedure laid down by this Law, profit (loss) for that year and undistributed profit carried over from the previous financial periods shall be attributed to the net distributable profit (loss). Thereafter the net distributable profit shall be distributed or the net distributable loss shall be covered following the provisions established in this Article. 2. Net distributable loss shall be covered from the reserve capital of the Bank of Lithuania. When reserve capital is not sufficient to cover distributable loss, remaining uncovered losses are carried forward to be covered by the distributable profit of the succeeding financial years. 3. Net distributable profit shall be allocated in the following sequence: 1)  to cover the uncovered loss carried forward; 2) from the excess remaining after the allocation under the subparagraph 1 herein, an amount shall be allocated to authorised capital up to the amount specified in Article 20 of this Law; 3) from the excess remaining after the allocation under the subparagraph 2 herein, an amount shall be allocated to reserve capital up to the amount, independently established by the decision of the Board of the Bank of Lithuania taking into account potential impact of risks however this capital shall be no less than five amounts of the authorised capital of the Bank of Lithuania; 4) from the excess remaining after the allocation under the subparagraph 3 herein, an amount shall be allocated to the State Budget as the profit contribution of the Bank of Lithuania. This contribution shall not exceed the amount corresponding to 70 per cent of the calculated average of the profit (loss) of the Bank of Lithuania of the last three financial years. 4. The surplus of the distributable profit after the allocation established in observance of paragraph 3 of this Article shall be carried forward as undistributed profit and shall be distributed following the provisions established in this Article in succeeding financial years. Article 24. Relation of the Bank of Lithuania to the State Budget The contribution of the Bank of Lithuania shall be paid to the state budget once a year not later than by the 1st of May of the following year. Title of Chapter 4 until the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: CHAPTER 4 MONETARY POLICY OF THE BANK OF LITHUANIA Title of Chapter 4 from the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: CHAPTER 4 MONETARY POLICY Version of Article 25 until the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: Article 25. Instruments of Monetary Policy When implementing its monetary policy the Bank of Lithuania shall choose and establish monetary policy instruments and the procedure for the application thereof. Version of Article 25 from the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: Article 25. Opening of Accounts and Instruments of Monetary Policy 1. The Bank of Lithuania, acting as an integral part of the European System of Central Banks, shall implement the defined monetary policy. 2. In order to conduct operations, the Bank of Lithuania may open accounts for credit institutions, public entities and other market participants and accept assets, including book entry securities, as collateral. 3. In accordance with general principles for open market and credit operations established by the European Central Bank, including the announcement of conditions under which it stands ready to enter into such transactions, the Bank of Lithuania may: 1) operate in the financial markets by buying and selling outright (spot and forward) or under repurchase agreement and by lending or borrowing claims and marketable instruments, whether in EU or in non-EU currencies, as well as precious metals; 2) conduct credit operations with credit institutions and other market participants, with lending being based on adequate collateral. Article 26. Rediscount Operations 1. The Bank of Lithuania, pursuant to the procedure and terms set forth by the Bank, shall have the right to rediscount bills of exchange and other debt instruments for credit institutions. 2. The Bank of Lithuania shall determine the total value of rediscount operations and the maximum rediscount value for each credit institution separately. Article 26 shall be repealed on the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union. Article 27. Loans of the Bank of Lithuania 1. The Bank of Lithuania, pursuant to the procedure, terms and conditions laid down by the Bank, shall have the right to make loans in Litas to credit institutions registered in the Republic of Lithuania that have their accounts at the Bank of Lithuania. 2. The loans made by the Bank of Lithuania shall be secured by the pledge of the following assets of a credit institution which obtains the loan: 1) debt securities issued by the Government or the Bank of Lithuania; 2) foreign currency or precious metals; and 3) bills of exchange, other debt instruments and real estate which satisfy the terms established by the Bank of Lithuania. 3. Loans may also be secured by a state guarantee, or a surety or guarantee of a credit institution. Article 27 shall be repealed on the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union. Article 28. Deposits at the Bank of Lithuania The Bank of Lithuania, pursuant to the procedures and terms laid down by the Bank, shall have the right to accept deposits denominated in Litas from credit institutions registered in the Republic of Lithuania. Article 28 shall be repealed on the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union. Article 29. Open Market Operations 1. Open market operations shall be the operations initiated by the Bank of Lithuania to increase or decrease reserves in the banking system by concluding transactions with banks. 2. The Bank of Lithuania, pursuant to the procedures and terms set forth by the Bank, shall carry out the following open market operations: 1) purchase and sell in the secondary market debt instruments of the Government and other debt instruments specified by the Bank of Lithuania, and perform other operations with them; 2) issue and purchase its own debt securities and carry out other operations with the said instruments, and establish procedures for their issue and trading; 3) accept time deposits; and 4) purchase and sell foreign currency and carry out other operations in foreign currency. Article 29 shall be repealed on the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union. Article 30. Required Reserves 1. The Bank of Lithuania shall have the right to require credit institutions to hold a part of their assets calculated on the basis of their liabilities as required reserves. 2. The rate of required reserves, the procedure for the formation and holding thereof, as well as the amount of fines and penalties for violating the said ratio and procedure shall be established by the Bank of Lithuania. Article 30 shall be repealed on the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union. Version of Article 31 until the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: Article 31. Regulation of the Exchange Rate of the Litas In order to implement its primary objective, the Bank of Lithuania shall establish the system for the regulation of the Litas exchange rate. Governed by this system, the Bank of Lithuania shall determine and announce an official Litas exchange rate against foreign currencies. Version of Article 31 from the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: Article 31. Setting and Publication of Exchange Rates Between the Euro and Foreign Currencies 1. The Bank of Lithuania shall publish in the Republic of Lithuania reference exchange rates between the euro and foreign currencies as published by the European Central Bank. 2. The Bank of Lithuania may also set and publish in the Republic of Lithuania other reference exchange rates between the euro and foreign currencies that were not indicated in Paragraph 1 of this Article. Article 32. Other Instruments of Monetary Policy In order to implement its primary objective, the Bank of Lithuania may establish and apply other monetary policy instruments. Article 32 shall be repealed on the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union. Version of the title of Chapter 5 until the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: CHAPTER 5 FOREIGN RESERVES AND OPERATIONS WITH FOREIGN FINANCIAL AND CREDIT INSTITUTIONS Version of the title of Chapter 5 from the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: CHAPTER 5 FOREIGN RESERVES AND OPERATIONS Version of Article 33 until the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: Article 33. Foreign Reserves The Bank of Lithuania shall manage, use and dispose of foreign reserves of the Bank of Lithuania with the view to implementing its primary objective and ensuring the reliability of the system for the regulation of the Litas exchange rate. Version of Article 33 from the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: Article 33. Foreign Reserves The Bank of Lithuania shall manage, use and dispose of foreign reserves following the principles and procedure meeting the requirements of European Union law. Article 34. The Structure of Foreign Reserves Foreign reserves may be composed of: 1) gold; 2) foreign currency in banknotes and coins; 3) assets in foreign currency held abroad; 4) Special Drawing Rights (SDRs) and reserves in the International Monetary Fund; and 5) other universally recognised international reserves. Version of Article 35 until the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: Article 35. Operations with Foreign Financial and Credit Institutions 1. In performance of its functions, the Bank of Lithuania shall have the right to conduct the following operations with foreign central banks, foreign and international financial and credit institutions: 1) open accounts on its own behalf and put deposits thereon; 2) open and manage accounts and accept deposits in Litas; 3) take and make loans; 4) purchase and sell gold and assets in foreign currency; and 5) carry out other operations. 2. Foreign reserves of foreign central banks held in accounts opened by the Bank of Lithuania may not be subject to recovery (in a judicial or extrajudicial manner). Version of Article 35 from the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: Article 35. Operations of the Bank of Lithuania 1. In performance of its functions, the Bank of Lithuania shall have the right to conduct the following operations: 1) open accounts on its own behalf and put deposits thereon; 2) open and manage accounts and accept deposits; 3) take and grant loans; 4) purchase and sell gold and assets in foreign currency; 5) carry out other operations. 2. Foreign reserves of foreign central banks held in accounts opened by the Bank of Lithuania may not be subject to recovery (in a judicial or extrajudicial manner). Version of Article 36 until the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: Article 36. Settlement Agreements The Bank of Lithuania may, on its own behalf or, according to an agreement with the Government of the Republic of Lithuania, on its behalf enter into settlement agreements with foreign public and (or) private institutions. Version of Article 36 from the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the first indent of paragraph 2 of Article 140 of the Treaty on the Functioning of the European Union: Article 36. Settlement Agreements The Bank of Lithuania may enter into settlement agreements with foreign public and/or private institutions. CHAPTER 6 FUNCTIONS OF A STATE TREASURY AGENT Article 37. Restriction of the Right to Lend and Prohibition of Privileged Access 1. Overdrafts or any type of credit facility with the Bank of Lithuania in favour of the institutions or bodies of the European Union, central governments, regional, local or other State government and administration institutions, other bodies governed by public law, or State and municipal undertakings of the Republic of Lithuania and any other Member States shall be prohibited, as shall the purchase directly from them by the Bank of Lithuania of debt instruments. These prohibitions shall not apply to credit institutions belonging to the State or public institutions by the right of ownership which, in the context of the supply of reserves by the European Central Bank and the national central banks of the Member States, shall be given the same treatment as private credit institutions. 2. The Bank of Lithuania may not provide refinancing to the financial liabilities assumed by the European Union, its institutions and bodies, the Member States of the European Union, other subjects of public law or credit institutions on behalf of the subjects of law specified in this paragraph, with the exception where such refinancing is provided in the legal acts of the European Union. Article 37 shall be repealed on the date on which the Council of the European Union abrogates the derogation of the Republic of Lithuania according to the procedure laid down in the first sentence of paragraph 1 and the fir …