Lithuanian experience adhering to the CLCM Donatas Tamulaitis

Lithuanian experience adhering to the CLCM Donatas Tamulaitis

2014 List of Rezervations LEGAL CONTENT AND MEASURE List A; I/A; List B; III/A 1: The acquisition of land, forest, and internal waters in Lithuania 2016 2018 ++ - List A, I/A: Maritime services: acquisition of a Lithuanian flag vessel List A, I/A: Airlines: Majority ownership of an air company by non-EU residents + + List A, IV : Requirements for prospectuses of non-EEA issuers. List A, IV/ C: Restriction for shareholders of central securities depositories. - - + - List A, IV D: Preferential treatment to EEA covered bonds in portfolio diversification requirements. - - List A, IV/D 1: Operations in securities on capital markets: purchase abroad by residents. + ++ List A, VIII/C and D: Exchange of information agreement as a precondition for delegation of management functions/establishment of a branch/marketing of units of funds. - - List A, VII/D 1: Operations in collective investment securities: – Purchase abroad by residents. List A, XI Requirement to ensure equivalent protection for deposits. List A, XI/B Transfer of capital to accounts in Lithuania. List A, XI/B Requirement to ensure equivalent protection for deposits. List A, XII A Requirement to establish a branch for non-EEA operators. List B, III/ B 1 Operations in real estate: Building or purchase abroad by residents - - - - - +- - List B, V/D 1 Operations on money markets: Purchase of money market securities abroad by residents - - List B, VI/D 1 Other operations in negotiable instruments and non-securitised claims: – Purchase abroad by residents. +(A) - List B, IX/B Financial credits and loans: Credits and loans granted by residents to non-residents. - - List B, XI/B 1, B 2 Operation of deposit accounts: – By residents in domestic currency with non-resident institutions. – By residents in foreign currency with non-resident institutions. - - List A, I/A: Requirement for depositaries to be established in Lithuania/EU member state

Final List of Reservations List A Direct investment: I/A - In the country concerned by non-residents. Remark: The reservation applies only to: i) air transport services, for which an operating license can only be granted to enterprises which are majority owned and effectively controlled by EU Member States and/or nationals of EU Member States, unless otherwise provided for through an international agreement to which the EU is a signatory; ii) acquisition of a Lithuanian flag vessel, except if the ship owner is a Lithuanian natural person or an enterprise incorporated in Lithuania; iii) the extent that under EU Directive 2009/65/EC, a depository of an undertaking for collective investment in transferable securities (UCITS) must either have its registered office in the same EU Member State as that of the undertaking or be established in the EU Member State if its registered office is in another EU Member State; iv) the extent that a depository of a pension fund can only be a bank having the right to provide investment services in Lithuania or in an EU Member State and having its registered office or branch established in Lithuania. . List A Operations in securities on capital markets: IV/D 1 - Purchase abroad by residents. Remark: the reservation applies only to the extent that: i) pension funds may not invest more than 5% of net assets in covered bonds issued by a non-EU credit institution. ii) collective investment in transferable securities (UCITS) may not invest more than 5% of net assets in covered bonds issued by a non-EU credit institution.

Legal amendments 1) 2) 3) 4) Law on Private Security Law on Acquisition of Agricultural Land Law of Banks The Constitutional Law of the Republic of Lithuania on the Implementation of Paragraph 3 of Article 47 of the Constitution of the Republic of Lithuania 5) Law on Enterprises and Facilities of Strategic Importance to National Security and other Enterprises of Importance to Ensuring National Security

Acquisition of land, internal waters and forests 1 • 2004 Lithuania‘s accession to EU Agreement - a transitional period to liberalise the acquisition of agricultural land. • 2009 Extension of the transitional period • 2014 the explicit restrictions were removed, but additional requirements introduced: • the buyer has to qualify as a farmer; • to prove having earned at least 50% of its income from agricultural activities, • prove its economic viability by the procedure established by the Ministry of Agriculture ….

Acquisition of land, internal waters and forests 2 • Criterion for acquisition of land • Positive: Membership in European and trans-Atlantic integration Criteria for Acquisition of land • • the European Union; the North Atlantic Treaty Organisation; the Agreement on the European Economic Area; the Organisation for Economic Co-operation Development EU and • Negative: membership in political, military, economic or any other type of unions or commonwealths of states set up on the basis of the former Union of Soviet Socialist Republics

Private security services and ownership Reservation I/A: Private security and surveillance services, ownership or participation except by investors of EU, NATO and EEA; Options after the assessment: • to extend preference to the OECD members • to extend preference to he OECD members and the Codes adherents • not to change the legislation and to place the measure under Art. 3 exceptions related to national security • remove restrictions and lift the reservation

Maritime services • Reservation I/A: Acquisition of a Lithuanian flag vessel, except if the ship owner is a Lithuanian natural person or an enterprise incorporated in Lithuania;

Air transport services Reservation I/A: Air transport services, for which an operating license can only be granted to enterprises which are majority owned and effectively controlled by EU Member States and/or nationals of EU Member States, unless otherwise provided for through an international agreement to which the EU is a signatory;

9. Reservations in financial sector I/A Direct investment: In the country concerned by non-residents. The reservation applies only to • iii) the extent that under EU Directive 2009/65/EC, a depository of an undertaking for collective investment in transferable securities (UCITS) must either have its registered office in the same EU Member State as that of the undertaking or be established in the EU Member State if its registered office is in another EU Member State; • iv) the extent that a depository of a pension fund can only be a bank having the right to provide investment services in Lithuania or in an EU Member State and having its registered office or branch established in Lithuania. • IV/D 1 Operations in securities on capital markets: Purchase abroad by residents. The reservation applies only to the extent that: • i) pension funds may not invest more than 5% of net assets in covered bonds issued by a non-EU credit institution. • ii) collective investment in transferable securities (UCITS) may not invest more than 5% of net assets in covered bonds issued by a non-EU credit institution.

Investment screening 1 The Law on Enterprises and Facilities of Strategic Importance to Ensuring National Security • Changes in geopolitical situation of the region; • Clarification and improvement of investment screening procedures; • Need to liberalise investment environment; • Reorganization of some enterprises after implementation of the Third Energy Package in Lithuania; • Changes in other legislation (National Security Strategy, Law on Acquisition of land). • Need to align with the provisions of the Codes

Investment screening 2 • The coverage of the law is too wide - economic sectors listed in the legislation were covering a substatial part of economy; • Investment screening based on origin of investment is inefficient; • The screening procedures need to be more transparent, efficient and predictable.

Investment screening 3 Coverage of screening procedures • economic sectors important to national security • • • Energy; Transport; IT and telecommunications, other high technologies; Finance and credit; Military equipment. • protection zones of enterprises and facilities important to national security • enterprises important to national security • facilities important to national security