RESTRICTED
WORLD TRADE WT/ACC/LTU/12
24February 1997
ORGANIZATION(97-0766)
Original: English
ACCESSION OFLITHUANIA
Additional Questions andReplies
ThePermanent Mission oftheRepublic ofLithuania hassubmitted thefollowing additional
questions andreplies reproduced hereunder.
_______________
TABLE OFCONTENTS
Section Page Question
Numbers
ECONOMIC POLICIES
State ownership andprivatisation 1 451-454
Pricing policies 2 455-457
Competition policy 3 458
POLICIES AFFECTING FOREIGN TRADE
(1)Import Regulation 3
Customs tariff 3 459
Tariff ratequotas, tariff exemptions 4 460-464
Feesandcharges forservices rendered 5 465
Application ofinternal taxes toimports 6 466-469
Quantitative import restrictions, including prohibitions,
quotas andlicensing systems7 470-480
Customs valuation 12 481-486
Other customs formalities 15 487
Rules oforigin 15 488
Anti-dumping, countervailing duties, safeguard regimes 17 489
(2)Export Regulations 17 490-491
INTERNAL POLICIES AFFECTING FOREIGN TRADE IN
GOODS
Industrial policy, including subsidies 18 492-493WT/ACC/LTU/12
Pageii
Technical barriers totrade, sanitary andphytosanitary
measures19 494-497
Trade-related investment measures 21 498
State trading entities 21 499-501
Freezones, special economic areas 23 502
Government procurement 24 503-504
Agricultural policies 24 505-512
Trade-related intellectual property régime 27 513
Policies affecting trade inservices 27 514
Trade agreements 28 515
ANNEX I:UPDATED LIST OFGOODS AND SERVICES
STILL SUBJECT TOPRICE CONTROL29WT/ACC/LTU/12
Page1
ECONOMIC POLICIES
State Ownership andPrivatisation
Question 451
Please describe thestatus oftheprivatisation ofthe59"former State trading enterprises" now
under thejurisdiction oftheMinistry ofIndustry andTrade. What portion oftrade dotheycontrol
inthecommodities inwhich theytrade?
Reply
First, toclarify thereply toQuestion 118(WT/ACC/LTU/4), there were 59State-owned
enterprises under thejurisdiction oftheMinistry ofIndustry andTrade, butnotalloftheseenterprises
were State trading enterprises. Second, theMinistry ofIndustry andTrade hasbeeneliminated and
itsfunctions havebeengiven tothenewMinistry oftheNational Economy. Third, theGovernment
ofLithuania hasmade some progress inprivatizing theformer state-owned enterprises. By
1January 1997, 25ofthementioned 59former state-owned enterprises hadbeenfullyprivatized and
34ofthe59hadbeen partially (about 70.5%) privatized. In1996, anadditional 10State-owned
companies were included onthelistofenterprises open forprivatization andfor7ofthese the
privatization programs havebegun. In1997, theGovernment intends tocontinue theprivatization of
theremaining State-owned enterprises.
Question 452
Please describe, possibly inachart, theportion offirms invarious sectors andinvarious stages
ofprivatization.
Reply
Seethereply toQuestion 453.
Question 453
Please indicate invalue terms theportion offormerly stateowned enterprises thathavebeenfully
privatized,andprovidemoredetailedinformationonhowtheprivatizationprogramshouldproceed
overnext4-5years.
Reply
Supplement tothereplies toQuestion 39(WT/ACC/LTU/2), Question 85(WT/ACC/LTU/4)
andQuestion 186(WT/ACC/LTU/7).
Lithuania moved quickly following there-establishment ofindependence toprivatize collective
farms andaspecific universe ofagro-processing, agro-services andindustrial enterprises thatwere
identified forinitial privatization. Most ofthisprivatization wascarried outonavoucher (notcash)
basis,allowingbidsbyemployeesormanagement,andinmostcasesdidnotincludeforeignparticipation.
Please notethatthestatistics foragro-processing, agro-services andindustrial enterprises noted below
pertain toprogress made inprivatizing thisinitial universe ofprivatization possibilities rather than
allprivatization possibilities.
Asof1January 1997, Lithuania hadwholly orpartially privatized 99.7% ofState-owned
farms (notincluding agricultural processing enterprises). TheStateretains some oftheshares ofsome
ofthefarms untiltheyarefullyprivatized -thisinassociation withtheirtransformation intojointstock
companies inthefirststage ofprivatization. Excluded fromthisprocess ofprivatization State owns:
(i)19experimental farms atresearch institutions ofagricultural science andstudies; (ii)54teaching
farms atagriculture schools; and(iii)8farms ofpure-strain enterprises.WT/ACC/LTU/12
Page2
Asofthissamedate,Lithuania hadmade significant progress inprivatizing 287agro-processing
(meat, milk, grain, cropselection, etc.)andagro-service enterprises identified forinitial privatization
andexpects tocomplete thisprocess in1997. Thegeneral policy inthisareaistooffer preferential
bidding terms toagricultural producers. Inmostsectors, 50%ormore oftheassets tobeprivatized
havebeenprivatized, sugar refining asoneexception where theprivatization hasnotproceeded as
quickly. TheStateretains alsosome oftheshares ofsome oftheenterprises (30-90 percent) untilthey
arefullyprivatized -thisisinassociation withtheirtransformation intojoint-stock companies inthe
firststage ofprivatization.
Lithuania alsohasmade significant progress inprivatizing industrial enterprises. AsofJanuary
1,1997,theGovernmentestimatedthatapproximately88%oftheindustrial(goods)enterprisesidentified
forinitial privatization hadbeen privatized. 97% oftheservices enterprises identified forinitial
privatization hadbeenprivatized. TheState retains some oftheshares oftheenterprises untilthey
arefullyprivatized -thisisinassociation withtheirtransformation intojointstock companies asthe
firststage ofprivatization.
Asasecond stageintheprivatization process, Lithuania passed aLawonPrivatization ofState
andMunicipal Property in1995. ThisLawallows theGovernment tobegin privatization onacash
basis andwiththeparticipation ofqualified foreign bidders. Pursuant totheLaw, theGovernment
created alistofenterprises andresidential holdings intheagro-processing, agro-services andindustrial
sectors which would beopenforbidding. Thislistinclude 454enterprises, some ofwhich weremajor
companies,andsomeinsectorsnotpreviouslyopenforprivatization(energy,communications,maritime).
Italsoincluded Government shares inenterprises which hadbeenpartially privatized during thefirst
stageofprivatization.In1996,theGovernmentopenedtendersfortheseenterprises.Forvariousreasons,
theprocess wasnotentirely successful andLithuania plans tocontinue thiseffort in1997.
After accession Lithuania agrees toprovide information onaperiodic basisondevelopments
initsprogramme ofprivatization along thelinesofthatprovided totheWorking Party during the
accession process, andonother issues related toitseconomic reforms asrelevant toitsobligations
under theWTO.
Question 454
Please provide information toillustrate howfarprivatisation hasgoneandplans fortheimmediate
future.
Reply
Seethereply toQuestion 453.
Pricing Policies
Question 455
Regarding price control, please provide anupdate ofproducts stillsubject toprice control, listing
allprice controls onproducts andservices stillineffect inLithuania, byHSnumber.
Reply
Thelistofgoodsandservicesstillsubjectto(maximumandminimum)pricecontrolsisprovided
inAnnex I(these goods andservices areclassified according totheNACE system because services
arenotclassified under HSnumber).
Question 456
Aretimber andcirculating glass tarestillunder price controls? Isfurther price liberalization
planned forprice-controlled products?WT/ACC/LTU/12
Page3
Reply
Minimum prices forsome state-owned wood, including timber, arestillinplace (seeAnnex I).
Lithuania haseliminated pricecontrols forallglass, including glasstare,under Government Resolution
No.1442 (5December 1996). SeeAnnex Iforreasons forremaining price controls andprospects in
some cases forfurther liberalisation.
Question 457
Please givethereasons fortheprice controls onState-owned land, State-owned precious metals,
wood andglassware.
Reply
Under Government Resolution No.77 (3February 1994), theGovernment controls prices for
state-owned precious metals, however, itplans toabolish these controls inthefuture. Price controls
arenolonger applied forglassware. SeeAnnex Iforreasons forremaining price controls. Please
notethatminimum, notmaximum, controls aremaintained forsome state-owned wood.
Competition Policy
Question 458
Inthepast, Lithuania hasprovided alistofentities considered tobe"dominant" inthenational
market. Onarelated issue, please provide alisting ofnon-privatized State-owned companies.
Reply
Please seethereply toQuestion 453.
POLICIES AFFECTING FOREIGN TRADE
(1)Import Regulation
Customs Tariff
Question 459
Lithuania notes intheintroduction todocument WTO/ACC/LTU/10 thattheParliament approved
thenewCustoms Code inApril 1996 andthatthenewcodewillgovern awidearray ofcustoms
matters. Lithuania alsonotes thattheCode willnotbeimplemented until 1998. Please provide
acopy ofthislegislation totheWTO, intranslation, forreview byinterested Members for
consistency withWTO rules. Please describe therelevant provisions oftheCode, withparticular
reference totheareas where itaddresses WTO obligations, andexplain whyitisintended for
theCode nottocome intoforce until 1998.
Reply
Anunofficial translation ofthenewCustoms Code hasbeendeposited withtheWTO Secretariat
forreview byinterested WTO members.
TheCustoms Code ofLithuania isbased ontheprovisions oftheCommunity Customs Code
(Council Regulation 92/29/13/EEC anditsamendments). According totheLawonImplementation
oftheCustoms Code adopted on6June, 1996, theCode willenter intoforce on1January, 1998,
andreplace theCustoms Lawadopted on29April, 1993. TheCode defines theresponsibilities ofthose
Government institutions involved intheadministration ofcustoms andprovides framework procedures
fortheimport, export andtransit ofgoods. Itincludes WTO-consistent provisions onapplication of
customs tariffs, customs valuation, rules oforigin, dutydrawback, freetrade zones, etc.WT/ACC/LTU/12
Page4
Before thenewCustoms Code enters intoforce, theGovernment mustamend orabolish number
oflawswhich areincontradiction withtheprovisions oftheCode andprepare andadopt implementing
regulationfortheCode.TheGovernmentstartedthisprocessinJuly,1996.TheGovernmenthasdecided
thatthebasisforthedraftimplementing provisions oftheCode shallbetheImplementing Provisions
oftheCommunity Customs Code (Commission Regulation 93/2454/EEC anditsamendments).
Itshould benoted thatsome legalactsgoverning theapplication ofsome Customs procedures
andrelated matters which arebased ontheprovisions ofnewCustoms Code already havebeenadopted
bytheGovernment. ThenewOrder ofCustoms Valuation ofGoods based ontheappropriate provisions
oftheCode already hasbeendrafted. ThisnewOrder willbeadopted bytheGovernment inthenear
future andwillreplace “TheOrder ofCustoms Valuation ofGoods ”adopted byGovernment Resolution
No.449 (27April 1993). Thedraftinteraliacontains provisions regulating thevaluation ofcarrier
media software fordataprocessing equipment andprovisions onthetreatment ofinterest charges in
customs value ofimported goods.
Formore details seethereply toQuestion 482.
Tariff Rate Quotas, Tariff Exemptions
Question 460
Inthereply toQuestion 335,Lithuania liststheproducts subject toatariff quotas asaresult
oftheFreeTrade Agreement withtheEUandtotariff quotas asaresult oftheGeneral tariff
import quota implemented in1995. Arethegeneral tariff-rate quotas opened inaddition tothe
tariff-rate quotas withtheEU?Specifically, please confirm thatimports from allcountries are
afforded thesame access under thegeneral import tariff-rate quotas opened because oftemporary
shortages andthatimports from theEUarenotcounted against thegeneral tariff-rate quotas.
Please confirm thatthefivetariff lineslisted inthereply toQuestion 335(0201, 0202, 0203, 0406
and1601) aretheonlytariff lineswhere Lithuania hasestablished tariff-rate quotas fortheEU.
Reply
Supplement tothereplies toQuestions 200-201 (WT/ACC/LTU/7) andQuestions 335-342
(WT/ACC/LTU/10).
Weconfirm thatimports from allcountries areafforded thesame access under thegeneral
import tariff-rate quotas opened because oftemporary shortages andthatimports fromtheEUunder
theLithuania-EU tariff quotas arenotcounted against thegeneral tariff-rate quotas Weconfirm that
thefivetarifflineslisted inthereply toQuestion 335(0201, 0202, 0203, 0406and1601) aretheonly
tariff lineswhere Lithuania hasestablished tariff-rate quotas fortheEU.
Question 461
What istherelation ofthelistof"general" tariff ratequotas inTable 2ofthe"Factual Summary"
totheEUpreferential quotas? Why isthere noaccess under general tariff ratequotas granted
inareas where theEUhasbeen provided withtariff ratequota access?
Reply
Actually, there isnorelationship between thegeneral tariff quotas andtheEUpreferential
quotas. Theaccess granted under these general tariff ratequotas istemporary, asaresult ofshortage
ofsupply, andisindependent ofLithuania ’spreferential treatment oftheEU’simports aspartof
movement towards totalfreetrade withtheEU.WT/ACC/LTU/12
Page5
Question 462
Please describe howthetariff ratequotas forrawmaterials forfirms producing alcohol are
determined andallocated.
Reply
According toGovernment Resolution No.653, therighttoimport rawmaterials foralcoholic
beverages (such asundenatured anddenatured ethylalcohol andrawmaterials containing ethylalcohol)
under general tariff quotas atzerotariff isgranted bytheMinistry ofAgriculture andForestry. The
Ministry grants suchrightautomatically (there isnopublic tender) afterpresentation ofapplication
andsales contract, butonlytocompanies holding activity licences fortheproduction ofalcoholic
beverages. Theapplication ofthistariffquota hasthesense ofautomatic licensing fortheimportation.
Question 463
Inthereply toQuestion 346,Lithuania states thatthedomestic processing industry isfreeto
import sugar atanytime. After reading thereply tothisQuestion, weunderstand thatsugar
canbeimported anytimeattheMFN dutylevel. Inorder tobenefit from thezeropercentduty,
processors must, however, utilize domestically-produced sugar first. Isitcorrect?
Reply
Yes,itiscorrect. Seethereply toQuestion 464formore details.
Question 464
Please explain howthetariff ratequota forrawsugar isadministered. Isthetariff ratequota
forrawsugar imported byLithuanian sugar refineries open toallprocessors?
Reply
Supplement tothereplies ofQuestions 201,213-215 (WT/ACC/LTU/7) andQuestions 335,
349(WT/ACC/LTU/10).
The administration ofallgeneral tariff quotas, including those forraw sugar
(HS1701.11.10-1701.12.90), sugar forspecial purposes (HS1701.91, 1702.30, 1702.40, 1702.90
-fordetails seethereply toQuestion 205(WT/ACC/LTU/7)) andrefined sugar (HS1701.99), is
governed byGovernment Resolution No.653 (8May1995). According tothisResolution, theMinistry
ofAgriculture andForestry decides when ashortage ofsupply makes itnecessary toopenquotas under
zerotariffs, andtoannounce tenders intheOfficial Gazette tofillthese quotas.
Regarding thegeneral tariff quota forrawsugar, theGovernment (Ministry) chooses a
supplier/suppliers based onquality andprice. Thissupplier/suppliers thenconcludes contracts with
allprocessors which havemetMinistry ofAgriculture andForestry established purchasing quotas for
domestic sugar beets. There arefoursugar processors (refineries) inLithuania, allofwhich meetthe
purchasing quota. Therawsugar imported under zerotariffs willthenbeallocated in25%shares among
these four(asexplained inthereply toQuestion 349ofWT/ACC/LTU/10).
FeesandCharges forServices Rendered
Question 465
Please describe anyfeesandcharges onimportation related tothecosts ofservices rendered.
Reply
Lithuania maintains some feesandcharges related tothecosts ofservices rendered. Allof
these feesandcharges areincluded under theStamp Tax(seethereply 474foradescription oftheWT/ACC/LTU/12
Page6
major applications oftheStamp Tax). Theapplications oftheStamp Taxrelated tocustoms matters
includes activity licences toengage inimportation ofcertain goods (alcoholic beverages, tobacco and
other goods listed inAnnex IofFactual Summary onbusiness activity licensing); feesconnected with
customsservices(forexample,registrationofgoods(20-30litas)orissuingcustomsdocumentsincluding
origin certificates (25litas)).
Application ofInternal Taxes toImports
Question 466
WenotethatLithuania hasimplemented newexcise taxes (under Government Resolution No.582)
since theWorking Party meeting inMarch 1996. Weseekclarification ontheexact excise taxes
imposed byGovernment Resolution No.582. Areanyexcise taxes imposed onanyproducts in
addition tothose listed inResolution No.582.
Reply
Annex IIIofWT/ACC/LTU/10 liststheexcise taxes applied under Government Resolution
No.582. Thisistheentire listofexcise taxes applied inLithuania.
Question 467
Itwould appear thatexcise taxes onimported anddomestic beerarenotequal. Annex IIIstates
thatalower excise taxrateisassessed on"beer produced andrealized byeachLithuanian beer
manufacturing company producing 100,000 decalitres peryear." Please explain thispreferential
treatment ofLithuanian producers.
Reply
Taking intoconsideration therequest oftheBrewers ’Association ofLithuania andseeking
topromote small business theGovernment established forsmall producers ofbeer(Resolution No.1399
of31October 1995) alower excise taxrate(0.2litasperlitre). “Small ”isdefined asannual production
of100,000 decalitres. Such adecision oftheGovernment wasnecessary forsmall beerproducing
enterprises, theproduction ofwhich make upabout 7%ofannual beerproduction. Ifnopreferences
aregranted tothem, theywillincur losses. However, thispreferential treatment istransitional measure
andLithuania islooking forWTO fullyconsistent ways ofsupporting these enterprises.
Question 468
Itwould alsoappear thatallimported cigarettes areassessed thehighest excise taxratewhile
domestic cigarettes areassessed aratedepending on"quality". Weseekclarification onhowsuch
taxes aredetermined. Howis"quality" ofcigarettes determined fortaxpurposes? Areallimported
cigarettes assessed thehighest rate-regardless of"quality"? Please explain howthistreatment
isconsistent withArticle III.
Reply
Lithuania understands thatthistreatment isnotfullyconsistent withArticle IIIand,asaresult,
on20January 1997, theMinistry ofFinance presented suggestions totheGovernment thatexcise duty
ratesforallfilter-tipped cigarettes produced inLithuania andimported filter-tipped cigarettes should
beequalized. TheMinistry ofFinance suggested thatthiscould beaccomplished by1August 1997.
Theduties fornon-filter-tipped cigarettes areequal.WT/ACC/LTU/12
Page7
Question 469
Thereply toQuestion 384states that9%Value Added Taxisapplied toforage, fishand
agricultural products ofLithuanian origin, butisnotapplied toimported goods. AsLithuania 's
standard 18% VAT isapplied tomost goods andservices, does thisstatement mean thatthe
imported goods ofalikenature aresubject to18%VAT? Please clarify thetreatment forimported
likeproducts inlight ofArticle IIIrules. Areimported forage, fishandagricultural products
subject toahigher VAT ?
Reply
Previousto1January1997,an18%VATrateappliedfortheimportedproductsinthementioned
sectors, anda9%VAT rateapplied todomestic products. Butstarting 1January 1997, suchVAT
privileges wereabolished andthe18%VAT began toapply tobothdomestic andimported products.
Quantitative Import Restrictions, including Prohibitions, Quotas andLicensing Systems
Question 470
Concerning Lithuania 'sextensive licensing system foreconomic activity and,insome cases, for
importation, thelistofbusiness activities listed inTable 1ofthe"Factual Summary" where a
license isrequired isquite extensive. There isnoexplanation, however, ofthecriteria applied
forthese licenses, noranexplanation astowhytheState would want torestrict thenumber of
commercial enterprises insome cases. Wethink thattotheextent thatsuchlicenses aregranted
more orlessautomatically andonanondiscriminatory basis these should belisted separately.
Business activities where theState limits orrations theright totrade through thelicensing system
engages anumber ofWTO issues. Lithuania needs toaddress thisissue, inparticular todescribe
fortheWorking Party:
(a) towhat extent thefirms thatreceive alicense totrade where other firms arearbitrarily
excluded constitute "state trading enterprises" receiving special benefits from the
Government; and
(b) towhat extent these licenses retain fortheState partofitsformer trade monopoly.
Reply
Inmostcases, Lithuania grants activity licenses onanautomatic basisandinanondiscriminatory
fashion. Lithuania hasdrafted rules (criteria) foreachoftheactivity sectors listed inTable 1ofthe
Factual Summary andinreply toprevious questions, already hasdeposited withtheWTO Secretariat
forreview byWTO members thecriteria (Government Resolutions) thatapply foractivity licensing
related toalcoholic beverages, tobacco andtobacco products, andoilproducts andliquid gas.Lithuania
willbeprepared toprovide specifics onother areas atalaterdate.
Astheonlyexception tothissystem ofautomatic andnondiscriminatory activity licensing,
Lithuania:
- doesnotallow foreign investments orforeign companies toobtain licences fortheorganizing
oflotteries andactivity licences related tonarcotic orpoisonous substances forpublic health
reasons,
- strictly controls (which mayinvolve rejection orlimitation ofapplications) allactivity related
tostrategical goods whose import iscontrolled forreasons ofnational security orenvironmental
protection, aswas stressed inSection B.ofQuestionnaire onImport Licensing
(WT/ACC/LTU/7/Add.1),
- limits activity licensing related withradioactive andnuclear material andtheirwastes tostate
enterprises andspecial enterprises inwhich theState holds allorthemajority ofshares (as
reported inthereply totheQuestionnaire onState Trading (WT/ACC/LTU/7/Add.1)).WT/ACC/LTU/12
Page8
Also, thegranting ofactivity licences toundertake inimportation ofalcoholic beverages (except
beer) isnon-automatic. Itisfulfilled through public tender, butthisprocedure doesnothaveany
discriminatorysense-itisrelatedwiththesafeguardofpublichealth,combatofsmugglingandensurance
ofcollection ofcustoms feesandtaxes. Lithuania thinks thatsuchnon-automatic licensing procedure
isconsistent withtheWTO licensing requirements.
Therefore, regarding (a)(b)theonlysubject ofstatetrading inLithuania, whether under the
activity licensing system orotherwise, isforradioactive andnuclear material andtheirwastes. The
State maintains itsmonopoly inthisarea.
Lithuania alsonotes thatintheareaofenergy, thejoint-stock company “Lietuvos energija ”
operates asanatural monopoly toprovide production, input, transmission, anddistribution ofelectricity.
Question 471
Inthereply toQuestion 343,Lithuania notes thattheGovernment maintains some discretion
indeciding what types ofalcoholic beverages maybeimported bythelicense holder. What are
thecriteria forsuch agovernmental decision? Does theGovernment allow theproduction of
products domestically forwhich theimportation isprohibited?
Reply
Article 17oftheLawonAlcohol Control foresees thatactivity licenses toimport alcohol
beverages (except wine andbeer) areissued onlyforthose enterprises which candemonstrate a
relationship withreliable supplier ofbeverages (formore details seethereply toQuestion 478). The
quality ofthealcoholic beverages isthemain criteria while applying theprovisions ofthisArticle.
Buttheapplicants foranactivity licence themselves alsosuggest thetypes ofhighquality alcoholic
beverages thattheywould liketoimport. TheGovernment isreviewing itspolicy inthisarea(seethe
reply toQuestion 478).
Regarding thelastquestion, theGovernment hasgiven totheenterprise “Lietuvi ðkasMidus ”
(Lithuanian Mead Brandy) anexceptional righttoproduce special alcoholic beverages ofgreater than
50%alcohol content (according toancient Lithuanian methods ofproduction andrecipes) (formore
details seethereply toQuestion 499). Theimport ofalcoholic beverages ofgreater than50%alcohol
content isprohibited. Thisistheonlycasewhich theGovernment allows production butnotimportation.
Question 472
Inthereply toQuestion 351(WT/ACC/LTU/10), Lithuania states thatasaresult oftheLaw
onAlcohol Control onlytenfirms areawarded (through apublic tender) theright toimport
alcoholic products andthattypeofbeverage andspecific product brand arealsodetermined at
thetimethelicense isawarded. Incontrast, thenumber ofwholesalers andretailers having license
tosellimported alcoholic beverages amounts 12,000. Prior totheLaw, howmany alcohol importers
were licensed?
Reply
In1995, before theenforcement ofthelimitation ofthenumber ofthelicenses toundertake
theactivity ofimportation ofalcohol beverages under theLawonAlcohol Control, theGovernment
licensed 14enterprises toimport alcoholic beverages intoLithuania.
Question 473
How isdecided which companies receive thelicense toimport? What isthenature ofthe
relationship between thealcoholic importers andwholesalers/retailers? Please explain howthisWT/ACC/LTU/12
Page9
restrictiveimportsystemisconsistentwithWTOrules,inparticulartheprovisionsofGATTArticle
XVII.
Reply
Concerning criteria forimport activity licences -seethereply toQuestion 223(a)
(WT/ACC/LTU/7).
Anactivity license toimport alcohol beverages entitles acompany toengage inwholesale but
notretail trade. Importers ofalcoholic beverages canselltoretail andpublic catering companies.
AnactivitylicenseforwholesaleofalcoholicbeveragesproducedinLithuaniaentitlesacompany
tobuythese beverages from aproducer andsellthem toretail andpublic catering companies.
Anactivity license forretail tradeofalcoholic beverages entitles acompany tobuythemfrom
aproducer aswellasfrom importers orwholesalers andsellthem tothepopulation.
Regarding consistency withWTO rules, Lithuania doesnotview itssystem oflimiting the
number ofactivity licenses forimportation ofalcoholic beverages toberestrictive. TheLithuanian
Government must safeguard thepublic health, combat smuggling andensure collection ofcustoms
feesandtaxes. AstheLithuanian budget resources areverylowandLithuania isstillintheprocess
ofimproving itscustoms andtaxenforcement institutions, theLithuanian Government canoversee
theoperations ofonlyalimited number ofimporters ofhighalcohol content alcoholic beverages,
currently setat10.However, in1996, only9enterprises applied forsuchlicences andallweregranted
these activity licences. Lithuania alsobelieves thatitsprocedures foradvertising andopening tenders
foractivity licences, reviewing applications andgranting suchactivity licences istransparent andfair
(seethereplies toQuestion 353(WT/ACC/LTU/10), Questionnaire onImport Licensing Procedures
(WT/ACC/LTU/7/Add.1andQuestion478).Finally,itdoesnotgrantanyspecialorexclusiveprivileges
totheholders ofactivity licences forimportation ofalcoholic beverages. Given expected improvements
incustoms andtaxadministration, theGovernment isreviewing itspolicy ontheseissues (seethereply
toQuestion 478).
Question 474
InpastLithuanian documentation, ithasreferred toan"annual levy" which importers arecharged
when issued animport license. The reply totheImport Licensing Questionnaire
(WT/ACC/LTU/7/Add.1) includes payment ofa"Stamp Tax" asonecondition forreceiving a
license forallproducts subject tolicensing. Thetaxvaries widely depending ontheproduct. Please
provide additional information ontheStamp Tax,listing allitsapplications andallrates applied.
Isthistaxapplied todomestic goods aswell? Ifso,please outline how.
Reply
TheStamp Tax(under theLawonStamp Taxof23June1994) isapplied foranumber of
services provided bygovernment institutions (forexample, fulfilment ofcustoms procedures; providing
apolicy guard forthetransited goods through customs territory; registering civilacts;etc.)andissuing
ofofficial documents (aslicences, various permissions, identification cards, etc.). Thepurpose ofthis
taxistoreceive anadditional revenue tothebudget onthebasisoftaxation oflicensing activity. The
application oftheStamp Taxisnotrelated withthemarket protection.
Oneoftheapplications oftheStamp Taxisforallactivities requiring alicence under theLaw
onEnterprises (thelistoflicensed activities under thisLawisprovided inTable IofFactual Summary),
including activity licensing forimportation. Itislevied onnatural persons andlegalentities. Holders
oflicences involving domestic goods must paytheStamp Taxaswell.WT/ACC/LTU/12
Page10
Under Resolution No.1123 of11November 1994, theGovernment setsStamp Taxrates. These
ratesareindexed totherateofinflation. ThesizeoftheStamp Taxdepends onthenature ofthelicensed
activity. Forexample, thecurrent Stamp Taxforanactivity licence (good foroneyear)toimport vodka
andother spirits intoLithuania is350,000 litas(approximately 90,000 USD); forspirits nottoinclude
vodka is300,000 litas(75,000 USD); forwineis150,000 litas(37,000 USD); andforoilproducts
(petrol, liquid fuel,kerosene, aircraft fuel,diesel fuelandlubricants) is500,000 litas(125,000 USD).
TheStamp Taxforalicence toengage inretail trade oflubricants is1000 litas(250USD).
Thetaxiscollected bytheState TaxInspectorate oftheMinistry ofFinance. Thetaxbears
some relation tothecostofadministering theactivity licenses. Theproceeds areusedtofinance the
institutions thatmust issue documents connected with collection oftheStamp Taxandtothe
municipalities under which banks which issue thestamps arelocated.
Question 475
How istheStamp Taxdetermined? Does thetaxbearanyrelation tothecostassociated with
administering thelicensing program? Who collects thetaxandforwhat purpose aretheproceeds
used? Areproducts notsubject tolicensing alsoassessed aStamp Tax?
Reply
Seethereply toQuestion 474.
Products notsubject toactivity licensing arenotassessed aStamp Tax.
Question 476
Onthesystem tolicence certain fields ofactivity, including theimportation, wholesale andretail
trade ofproducts containing alcohol, whatreasons aregiven forrefusal oftheapplicant 'slicensing
request ?
Reply
Supplement tothereplies toQuestion 223(a)(WT/ACC/LTU/7), Questionnaire onImport
Licensing Procedure (WT/ACC/LTU/7/Add.1) andQuestion 353(WT/ACC/LTU/10). Alsoseethe
replies toQuestions 477-478 formore detail onthealcohol activity licences.
Requests togrant thelicenses forimportation ofalcoholic beverages, alsoforwholesale and
retail trade bythem areimplemented through public tender (except beer). Economic entity mayfail
intender andinthiscasenottoreceive thelicense ifthiseconomic entity isnon-observance for
determinate financial discipline, health center requirements andother standards confirmed bythe
Government. TheGovernment institutions cannotdenytherequest forthelicenses without thereason.
Question 477
Thisdelegation doesnotunderstand themeaning ofthephrase which isusedintheLicensing
Questionnaire foralcohol, tobacco, andfoodstuffs. Please explain what ismeant by"Refusal to
issue alicense cannot bebased ontheinadvisability oftheenterprise activity."
Reply
Thestatement: "Refusal toissuealicence cannot bebased ontheinadvisability oftheenterprise
activity" means thataninstitution cannot refuse toissue alicence onthegrounds thattheactivity for
which anenterprise isapplying foralicence isnotnecessary forLithuania ’seconomy. Alicence may
berefused solely ifanenterprise doesnotfulfil allterms established fortheacquisition ofalicence.WT/ACC/LTU/12
Page11
Question 478
Thereply topartIVoftheQuestionnaire onImport Licensing implies thatLithuania implements
restrictive licensing onalcohol beverages. Under partII,Purposes andCoverage ofLicensing,
Lithuania notes thatthequantity andvalue arenotrestricted. Isthelicensing onalcohol beverages
restrictive licensing? Please explain thecriteria upon which thelicensing foralcohol beverages
isbased?
Reply
Supplement tothereplies toQuestion 223(a)(WT/ACC/LTU/7), Questionnaire onImport
Licensing Procedures (WT/ACC/LTU/7/Add.1) andQuestion 353(WT/ACC/LTU/10).
Lithuania currently limits thenumber oftraders which mayobtain anactivity licence toengage
intheimportation (butnotwholesale orretail) ofalcoholic beverages (except beer). When granting
theactivity licences forimportation, theGovernment specifies theparticular typeofalcoholic beverages
thatmaybeimported bytheparticular enterprise, e.g.,anactivity licence forvodka, forvodka and
other spirits, forwine. Itdoesnotlimittheamount orvalue ofbeverages within thespecified approved
typethatmaybeimported.
Lithuania isintheprogress ofreviewing thissystem oflicensing activity forimportation of
alcoholic beverages inpartasaresult ofanticipated improvements toitscustoms andtaxadministration
regimes. InJune, 1996, theGovernment submitted totheSeimas adraftamendment totheLawon
Alcohol Control which would remove therestrictions onthenumber oftraders which mayobtain an
activity licence toengage inimportation ofalcoholic beverages. Theamendment would allow importers
tosource fromallforeign producers which meetLithuanian health andquality standards andtoobtain
suchlicences fortheunlimited period andwithout tender procedure. Lithuania willkeepWTO members
apprised ofdevelopments inthisarea.
Activity licences fortheimportation andwholesaling ofalcoholic beverages aregranted through
public tenders (except beer) organized bytheState Tobacco andAlcohol Control Agency under the
directionoftheGovernment.Tendersforgrantinglicencesforretailingalcoholicbeveragesareorganized
bymunicipalities, which alsoestablish theterms ofthetender andassessment criteria.
Theapplicant foranactivity licence fortheimportation orwholesaling oralcoholic beverages
mustdemonstrate: payment ofStatetaxesovertheprevious yearandduring thecurrent year;experience
inimportation orwholesaling ofhighquality beverages overtheprevious year(asoverseen bythe
Hygiene Center ortheQuality Inspectorate); making ofcharitable contributions, including tosupport
groups foralcohol-dependent people; andadherence totheGovernment ’sprocedures forimportation
andwholesaling ofalcoholic beverages overtheprevious year. Allofthese factors arescored andthe
applicants withthehighest scores aregranted activity licences.
Question 479
Please supply thefulltextofResolution No.1459 onthelicensing ofimports, wholesale andretail
saleofAlcohol Products which restricts imports ofspirits toalistof"Top 100"companies and
ofanyother requirements affecting theimport andsaleofthese products.
Reply
GovernmentResolutionNo.1495“OnLicensingImport,WholesaleandRetailTradeinAlcoholic
Products ”(17November 1995) hasbeendeposited withtheWTO Secretariat forreview byWTO
members.WT/ACC/LTU/12
Page12
Question 480
Onthesystem tolicence certain fields ofactivity, including special foodstuffs andfoodadditives,
Lithuania notes thattheregulation onlicensing forfoodstuffs andfood additives isunder
preparation. What isthestatus ofthisregulation?
Reply
TheLawonEnterprises (amendment approved on11May1995) requires activity licensing
forenterprises producing, trading orimporting foodadditives andfoodstuffs forspecial dietary uses.
However, theGovernment hasreviewed itspolicy onthismatter andhasnowpresented theSeimas
withanamendment tothisLaw, which would abolish theneedtolicence inthissector. Lithuania will
keepWTO members apprised ofdevelopments inthisarea.
Customs Valuation
Question 481
Lithuania hasindicated thatitsnewCustoms Code includes thelanguage oftheGATT customs
valuation provisions (Article VII), butthattheCode willnotbeimplemented untilJanuary 1998.
What isthestatus ofthelegislation required toimplement thenewCode? What measures has
Lithuania undertaken since April toimplement itsprovisions?
Reply
Seethereply toQuestion 459.
Question 482
Please confirm thatthenewCode hasaddressed theprevious problems ofWTO conformity of
theprevious law,e.g.,ofnotification ofimporters (Article 7.3),thelisting ofprohibited valuation
methods (Article 7.2),confidentiality (Article 10)andvaluation ofsoftware andinterest charges.
Reply
ThenewCode anditsimplementing legislation willaddress theprevious problems ofWTO
conformity oftheprevious legislation oncustoms valuation. Forinstance, theCode’sChapter on
“Customs Valuation ofGoods ”contains listing ofprohibited valuation methods (Article 32,paragraph
2).Itcontains astatement that“thecustoms value ofcarrier media foruseinautomated dataprocessing
equipment andbearing dataorsoftware shallbedetermined inaccordance withtherules contained
intheImplementing Provisions oftheCode”(Article 35)andprovisions regulating thevaluation of
interest charges (Article 34,subparagraph 3).Lithuania provides moreinformation onthisimplementing
legislation inthereply toQuestion 459.TheCode’sChapter “Rights andobligations ofpersons with
regard toimplementation oftheprovisions oftheCode”contains provisions governing supply of
information bythecustoms authorities tointerested persons (Article 5)andprovisions establishing
that“information which isbynature confidential orwhich isprovided onaconfidential basis shall
becovered bytheobligation ofprofessional secrecy ”(Article 8).
Question 483
Please clarify whytheCode cannotbeimplemented until 1998.
Reply
Seethereply toQuestion 459.WT/ACC/LTU/12
Page13
Question 484
Lithuania 'sreply toQuestion 358states thatitisplanning tointroduce a"price-in-checking" system
which would entail aspecial listofprices forimported goods. What isthestatus oftheproposed
Government resolution toenact suchasystem? IsthispartofthenewCustoms Code? What is
theproposed product coverage oftheprice list?
Reply
Theso-called “price-in-checking ”system wasapproved under Government Resolution No.751
of25June1996, inorder toavoid fraudulent declared prices ofimported goods. Itentered intoforce
in1August 1996. ItisnotpartofthenewCustoms Code butisintended asatransitional measure.
Under theResolution, theMinistry ofAgriculture andForestry, theStateCompetition andConsumer
Protection Office andother competent authorities haveestablished checking prices forgoods onthe
list.These checking prices arenotminimum prices butareapplied onlyiftheimporter cannot provide
information toallow theother methods under Government Resolution No.449 (thecurrent customs
valuation system which contains WTO valuation methods) tobeusedtodetermine theaccurate customs
value -thissystem isapplied asadditional customs valuation method. Thechecking prices are
coordinated withtheMinistry ofNational Economy. Thelistofgoods andtheirchecking prices are
reviewed atleastonceevery 3months.
Thelistcovers thefollowing products:
meat andedible meat offal(HS0201-0205, 0206.10-0206.22, 0206.29.10.9-0206.29.91.0,
0206.29.99.9-0206.90, 0209-0210);
meat andedible offal ofpoultry (HS0207.10.11-0207.23.90, 0207.39.11-0207.39.25,
0207.39.31-0207.39.47,0207.39.53-0207.39.83,0207.41.10-0207.41.71,
0207.42.10-0207.42.71, 0207.43.11-0207.43.81);
milkanddairy products (HS0401-0402.21.99, 0402.29.15-0404);
domestic birds’eggs, whether ornotinshell, andeggyolks (fresh anddried) (HS0407, 0408);
potatoes, tomatoes, onions, shallots, garlic, cucumbers, apples andpears (HS0701,
0702.00.90.0,0703.10,0703.20.00.0,0707.00.19.0,0808.10.10.0,0808.10.31.0-0808.10.33.0,
0808.10.39.0, 0808.20.10.0);
groats ofbarley (HS1103.19.30.0);
potato starch (HS1108.13.00.0);
rape, colza andmustard oil(HS1514);
sausages andsimilar products ofmeat(HS1601);
preserved meat(HS1602);
caneandbeetsugar containing added flavouring orcolouring matter (HS1701.91.00.0);
white sugar (HS1701.99.10.0);
active yeast (HS2102.10);
icecream andother edible ice,whether ornotcontaining cocoa (HS2105.00);
waters, including mineral waters andaerated waters, containing added sugar orothersweetening
matter orflavouring (HS2202.10.00.0);
beermade from malt(HS2203.00);
hydrogen, nitrogen andoxygen (HS2804.10.00.0, 2804.30.00.0, 2804.40.00.0);
carbon dioxide (HS2811.21.00.0);
acetylene (HS2901.29.00.0);
matches (HS3605.00.00.0);WT/ACC/LTU/12
Page14
Portland cement (HS2523.29.00.0);
corrugated sheets ofasbestos-cement (HS6811.10.00.0);
unglazed andglazed ceramic flags(HS6907, 6908);
horticultural sheet glass (HS7005.10.10.0); and
tempered safety glass suitable formotor vehicles andhorticulture (HS7007).
Thechecking prices forimported goods areestablished taking intoaccount:
- thestock-market selling prices inforeign countries;
- theexport prices offoreign producers;
- thestandard prices oftheimported goods established intheEuropean Union;
- theselling prices ofthegoods when imported intoLithuania; and
- other information about prices applicable inaccordance withthelegislation ofLithuania and
international agreements.
Lithuanian authorities compare these prices withtheprice declared bytheimporter. Ifthe
checking price ishigher thatthedeclared value itisapplied forassessment ofimport duties andtaxes
onlyiftheimporter failstosubmit information toprove thatthedeclared value orvalues determined
through theapplication ofother customs valuation methods under Government Resolution No.449 is
truevalue.
Thecustoms value forgoods notincluded intheabove mentioned listisdetermined in
accordance withGovernment Resolution No.449 without using checking prices. Astheonlyexception
tothecoverage ofthisResolution, oilproducts aresubject tominimum prices -seethereply to
Question 485.
Question 485
Given thattheultimate useofthesystem istoestablish alistofvalues forapplication toimports,
weseekLithuania 'sdetailed explanation ofhowsuchasystem doesnotconstitute aminimum
price scheme. Inaddition, paragraph 38ofthe"Factual Summary" refers totheGovernment 's
authority toapply reference prices: hasthenewCustoms Code abolished thisauthority? Ifnot,
weexpect thatregulation toberepealed, orforaprotocol commitment thatsuchmeasures will
never beused.
Reply
Seethereply toQuestion 484regarding theprice-in-checking system. Itisforcomparison
purposes andtheprices areapplied onlyiftheimporter doesnotprovide information toallow theother
methodsunderGovernmentResolutionNo.449tobeused.Thissystemdoesnotprovidefortheautomatic
useofthese prices asminimum (threshold) prices.
Theonlyexception isfortheimport ofoilproducts. Lithuania applies minimum import prices
foroilproducts during thistransitional timeofimproving thework ofitscustoms service. Therefore,
toensure collection oftariffs andtaxes forimported oilproducts (andtheyareofstrategical goods
nature), minimum import prices were introduced forthefollowing oilproducts:
- natural gascondensates (HS2709.00.10.0);
- crude petroleum oilsandoilsobtained from bituminous minerals (HS2709.00.90.0);
- lightoils(HS2710.00.11.0);
- motor fuel(HS2710.00.27.0, 2710.00.28.0, 2710.00.29.0, 2710.00.34.0);
- diesel oils(HS2710.0069.0).
Minimum import prices foroilproducts were established taking intoaccount:
- thestock-market selling prices inforeign countries;
- theexport prices offoreign producers;WT/ACC/LTU/12
Page15
- thestandard prices oftheimported oilproducts established intheEuropean Union;
- theselling prices oftheoilproducts when imported intoLithuania; and
- other information about prices applicable inaccordance withthelegislation ofLithuania and
international agreements.
Regarding theGovernment authority toapply references prices, WTO members should note
thatthenewCustoms Code, expected toenterintoforcein1January 1998, prohibits theuseofreference
prices (e.g.theselling prices inLithuania ofgoods produced inLithuania, theprices ofgoods onthe
domestic market ofthecountry ofexportation, prices forexport toother countries, minimum customs
values, arbitrary orfictitious values) (Article 32,paragraph 2).TheLawonSugar (Article 4)andthe
LawonStateRegulationofEconomicRelationsforAgriculture(Articles2and12)stillcontainprovisions
giving theauthority totheGovernment toapply threshold (reference) prices, butthose provisions are
notcurrently applied.
Question 486
Intheintroductory paragraph totheQuestionnaire toInformation onImplementation and
Administration oftheCustoms Valuation Agreement, Lithuania states thatitscustoms valuation
system complies withArticle VIIofGATT 1994, butnotes that"some oftheprovisions ofthe
GATT 1994 Agreement aremissing". Which provisions aremissing andwhen doesLithuania
plantoinclude these provisions?
Reply
Once thenewCustoms Code anditsimplementing legislation enter intoforce, afully
WTO-consistent customs valuation willresult (seethereply toQuestion 459).
Until theCode enters intoforce, Government Resolution No.449 (27April 1993) willhave
effect. Thefollowing provisions oftheAgreement onImplementation ofArticle VIIofGATT 1994
aremissing from thatResolution:
- Article 1(2)(b)and(c);
- Article 6(2);
- Article 7(1)(reference totheprinciples andgeneral provisions oftheAgreement on
ImplementationofArticleVIIoftheGATT1994andofAgreementonImplementationofArticle
VIIofGATT 1994 oftheArticle VIIGATT 1994),
- Article 7(2);
- Article 14;
- Article 15(2)(d)and(e),Article 15(5).
Other Customs Formalities
Question 487
Does Lithuania have anyrequirement forthereview ofexport documentation byitsconsular
offices? Ifso,arefeescharged?
Reply
Lithuania currently doesnothaveanyrequirement forthereview ofexport documentation
byitsconsular offices.
Rules ofOrigin
Question 488
Lithuania needs tosupply information totheWorking Party onhowitdetermines theruleof
origin andindicate howLithuania 'srules oforigin correspond tothose oftheWTO.WT/ACC/LTU/12
Page16
Reply
Supplement tothereply toQuestion 233(WT/ACC/LTU/7).
ThenewCustoms Code which willcome intoforce on1January 1998 contains aChapter on
“Origin ofgoods ”which corresponds toWTO requirements fornon-preferential rulesoforigin. This
chapter willreplace thecurrent regime forrules oforigin under Article 10oftheLawonCustoms
Tariffs.
According toArticle 25ofthenewCustoms Code, goods originating inacountry shallbe
those wholly obtained orproduced inthatcountry. Thefollowing goods aretreated aswholly obtained
inacountry:
- mineral andorganic materials, gasandother mining products, extracted within theterritory
ofthatcountry;
- vegetable products harvested therein;
- liveanimals bornandraised therein;
- products derived from liveanimals raised therein;
- products ofhunting andfishing carried ontherein;
- products ofsea-fishing andother products taken from theseaoutside acountry ’sterritorial
seabyvessels registered inthecountry concerned andflying theflagofthatcountry;
- products obtained orproduced onboard factory ships from theproducts referred toin
subparagraph 6originating inthatcountry provided thatsuchfactory ships areregistered in
thatcountry andflyitsflag;
- products taken fromseabed orsubsoil beneath theseabed outside theterritorial seaprovided
thatcountry hasexclusive rights toexploit thatseabed orsubsoil;
- waste andscrap products derived from manufacturing operations andusedarticles ifthey
were collected therein andarefitonlyfortherecovery ofrawmaterials;
- goods which areproduced therein exclusively from goods referred toinsubparagraphs 1to
9orfrom theirderivatives atanystage ofproduction.
According toArticle 26oftheCode, goods whose production involved more thanonecountry
shallbedeemed tooriginate inthecountry where theyunderwent theirlastsubstantial, economically
justified processing orworking inanundertaking equipped forthatpurpose, andresulting inthe
manufacture ofanewproduct representing animportant stageofmanufacture. Thecriteria under which
products aredeemed tobenew,andtheirprocessing orworking deemed toberepresenting animportant
stage ofmanufacture, shallbeestablished byinternational agreements concluded between Lithuania
andother countries orbytheImplementing provisions oftheCode.
Preferentialrulesoforiginareestablishedunderinternationalagreementsonfreetradeconcluded
between Lithuania andother countries.
According toArticle 10oftheLawonCustoms Tariffs nowinforce, goods originating in
thecountry shallbethose obtained orproduced inthatcountry. Goods whose production involved
more thanonecountry shall bedeemed tooriginate inthecountry where their rawmaterials or
components underwent substantial, economically justified processing orworking. Saveinthecases
wheretheinternationalagreementsconcludedbetweenLithuaniaandothercountriesorlegalactsadopted
bytheGovernment areapplied, theprocessing orworking shallbetreated assubstantial ifthenew
product fallsinadifferent HS4-digit heading thantherawmaterials orcomponents usedinits
manufacture.WT/ACC/LTU/12
Page17
Anti-Dumping, Countervailing Duties, Safeguard Regimes
Question 489
Lithuania states initsreply toQuestion 370thatitisconsidering whether toimplement AD/CVD
andsafeguards systems, andthatsuch regimes maynotbeinplace atthetime ofaccession.
Lithuania alsostates thatifitdoesimplement suchregimes inthefuture, theywillbeinaccordance
with WTO requirements. While weappreciate Lithuania 'sstatement thatanyAD/CVD or
safeguardslegislationwillbeWTO-consistent,wealsoremindLithuaniathattheabsenttherequired
legislation, itcannotavail itself ofthese WTO-sanctioned temporary protection mechanisms.
HasLithuania given more thought totheestablishment ofAD/CVD andsafeguards regimes?
Reply
Lithuania isgiving more thought towhether establish AD/CVD andsafeguards regimes but
ithasnothing newtoreport atthistime. Lithuania understands thatabsent therequired legislation it
cannot availitself ofthese WTO-sanctioned temporary protection measures.
(2)Export Regulations
Question 490
Were allexport duties (including those applied topreferential trade) abolished inOctober 1994?
Reply
Under Government Resolution No.985 (October 1994), export duties were abolished. Then
temporary export prohibitions onsome products were introduced (seethereplies toQuestion 34
(WT/ACC/LTU/2) andQuestion 251(WT/ACC/LTU/7)). These thenwerereplaced byexport duties
(seethereply toQuestion 371(WT/ACC/LTU/10).
Lithuania alsoapplies export duties topreferential trade under theTrilateral FreeTrade
Agreement between Lithuania, Latvia andEstonia, andunder FreeTrade Agreement ’swithEuropean
Union, theCzech Republic, Slovakia andSlovenia. Alsothepossibility forapplication ofexport duties
isprovided intheFreeTrade Agreement withPoland. Ingeneral, Lithuania applies thesame export
duties topreferential trade astonon-preferential trade; however, insome cases thepreferential trade
isexcluded from orsubject tolower thannon-preferential export duties.
Question 491
Weseekclarification from Lithuania ontheir current export duties anditems subject toexport
bans. Please indicate which Government Resolutions currently regulate these export restrictions
andtaxes. What plans doesLithuania have toliberalize itssystem forregulating exports?
Reply
Supplement tothereply toQuestion 371(WT/ACC/LTU/10).
Lithuania doesnotmaintain anyexport bans.
Pursuant toGovernment Resolution No.716 (June 18,1996) which amends Resolution No.985
(October 14,1994) "OntheOrder ofRegulations ofExport andImport ofGoods intotheRepublic
ofLithuania",temporaryprohibitionstoexportcertaingoodswerereplacedbyexportduties.Thecurrent
listofgoods subject toexport duties isinthereply toQuestion 371(WT/ACC/LTU/10).
Inaddition, Lithuania licences theexport ofcertain goods. Government Resolution No.1377
(October 23,1995) "OnConfirmation ofRegulations ofExport Licensing ofRawTimber", regulates
export licensing ofrawtimber. Government Resolution No.389 (March 26,1996) "OnExport ofEthylWT/ACC/LTU/12
Page18
Alcohol", provides automatic licensing forexport ofethyl alcohol produced inLithuania (HScode
-2207.10).
Also, Lithuania applies temporary export limitations duetopoorharvest andcritical shortage
offoodstuffs andother products essential toLithuania (seethereply toQuestion 371).
Regarding further liberalization, Lithuania hasabolished itsexport bansandatpresent does
notanticipate theneedforanyadditional modification toitsexport regime.
(3)Internal Policies Affecting Foreign Trade inGoods
Industrial Policy, including Subsidies
Question 492
Lithuania hasindicated (Question 373)thatitdoesmaintain export-related subsidies forindustrial
goods, andintends tonotify theWTO ofthese programs. Please provide more information on
Lithuania 'sindustrial subsidy programs, particularly theprograms oftheLithuanian Export
Promotion Agency, theExport Support andExport Guarantee Funds, andthecredit insurance
system under development.
Reply
Thepurpose oftheLithuanian Export Promotion Agency (LEPA), which wasestablished at
theendof1995andcurrently isfunding byExport Support Fund, istopromote exports ofLithuanian
goods anddemand forLithuanian services. Itsmainfunctions aretoanalyze andprovide information
toLithuanian exporters andservice providers onforeign market conditions; toestablish Lithuania ’s
trade representation offices abroad; toprepare, implement andmonitor trade development programs
toensure theirconsistency withWTO rules; tostudy issues affecting trade activities andformulate
recommendations toLithuanian authorities; toconsult state, public andprivate institutions onforeign
tradeissues;andtoprovideeducationandtrainingtotheforeigntradecommunityinLithuania.Lithuania
doesnotconsider thisprogram toconstitute anexport subsidy.
Theprovisions oftheExport Support Fund ofLithuania were approved byGovernment
Resolution No.939 (August 5,1996). TheFund provides loans toenterprises producing goods suitable
forexport (atup80%ofthevalue oftheparticular project) andtoprojects which willresult inthe
creation ofnewjobsorthemaintenance ofexisting jobs. TheFund mayalsopartially compensate
exporters fortheinterest onanyloans thattheyhavetaken fromcommercial banks (theinterest rates
charged bycommercial banks arestillveryhigh). Inaddition, theFund finances trade fairactivities
andtheadvertising ofLithuanian products.
However, newguidelines fortheExport Support Fund havebeen prepared andprovided to
theGovernment forapproval. Itisforeseen thattheExport Support Fund willnotprovide anysubsidies
-asitdidearlier. TheFund willfocus onresearch andpublishing activity related toexport promotion,
training ofbusinessman/exporters, arrangement andpartial financing oftrade exhibitions, fairsand
trade missions, quality management andimplementation ofmeasures ofsustainable development and
similar.
Indevelopinganexportcreditinsurancemodel,Lithuaniatookintoaccounttherecommendations
oftheOECD. Lithuania hasnotdecided whether toimplement suchasystem butwillcontinue toupdate
WTO members onthisissue.WT/ACC/LTU/12
Page19
Question 493
What isthenature ofthesubsidies granted toenergy suppliers? Arethese subsidies granted purely
tooffset thefactthathousehold users paylowprices?
Reply
TheLithuanian Government isintheprocess ofrestructuring theenergy sector andisreviewing
itspricing policies forenergy. Currently, Lithuania isalmost totally dependent onimports tosupply
itsenergy needs. Itprovides subsidies totheState-owned gasimporter andsupplier “Lietuvos Dujos ”
(Lithuanian Gases) tohelpoffset thecostofimported natural gasandtoallow heatandhotwater to
besupplied tohousehold consumers ataffordable prices.
Astherestructuring progresses, Lithuania maybeabletodirectly subsidize thehousehold
consumers ofenergy. Lithuania alsohasplans tobegin privatization intheenergy sector, which could
affect “Lietuvos Dujos ”.
Technical Barriers toTrade, Sanitary andPhytosanitary Measures
Question 494
Wenotethatsome ofthelegislation critical tothedevelopment ofLithuania 'sstandards regime
isstillunder preparation. Please update thestatus ofpending legislation andtheestablishment
ofLithuania 'senquiry point.
Reply
AccordingtoadecisionoftheMinistryofPublicAdministrationReformsandLocalAuthorities,
anInformation Centre hasbeensetupatLithuanian Standardization Board. Eventually, itwillfunction
astheWTO Enquiry Point under theTBTAgreement. Asecond function oftheInformation Centre
istoprovide notifications according to83/189/EEC Directive.
Regarding other legislation onthedevelopment ofLithuania ’sstandards regime, theLawon
Metrology wasadopted on9July1996 (ithasbeendeposited withWTO Secretariat forreview by
WTO members). AdraftLawonConformity Assessment Procedures andadraftLawonStandardization
areunder preparation. They mustbepresented totheSeimas forapproval by31December 1997. (For
more details seethereply toQuestion 495).
Question 495
Please provide asummary fortheWorking Party oftheprovisions oftheLawonMetrology,
LawonStandardization, andLawonConformity Assessment Procedures. Ifavailable, please
provide copies ofthislegislation.
Reply
TheLawonMetrology wasadopted on9July1996. Acopyhasbeendeposited withtheWTO
Secretariat forreview byWTO members. Themain provisions oftheLawareasfollows:
1. Implementation ofInternational System ofUnits (SI),removing technical barriers totrade.
2. Coordination ofcreation, acquisition andmaintenance ofstatestandards.
3. Regulation oftheissues related toproduction, import, verification andrepairs ofmeasurement
instruments;
- statemetrological inspection ofmeasurement instruments;
- statemetrological inspection ofmeasurements;
- statemetrological inspection ofthequantity ofgoods.
4. Toharmonize organizational structure ofLithuanian metrology system withthatofWestern
European countries.WT/ACC/LTU/12
Page20
ThedraftLawonConformityAssessmentwillapplytobothmandatoryandvoluntaryprocedures.
TheLawdefines thestructure oftheconformity assessment system, andtheobjectives, procedures,
functionsandresponsibilitiesoftheparticipantsinthesystem.Itcoversaccreditation,testing,certification
andinspection, andsuppliers declarations.
ThedraftLawonStandardization defines theorganizational framework forstandardization,
thebasic principles andrequirements ofitsfunctioning, anditsmain resources.
1. TheLithuanian Standardization Board isanational organization ofstandardization representing
Lithuania ininternational andEuropean organizations forstandardization.
2. TheLithuanian Standardization Board isoperating following itsstatute. Among thebasic
objectives isimplementation ofinternational andEuropean standards inLithuanian standards.
Original Lithuanian standards canbedrafted onlyinthecases when relevant international or
European standards ordraftstandards donotexists.
3. Lithuanian standards arebeing drafted intechnical committees setuponavoluntary basiswith
participation ofallinterested parties, suchasproducers, consumers, andtheGovernment.
4. Application ofLithuanian standards isvoluntary except ininstances when itismade mandatory
bylegislation. Only Lithuanian standards canbeoffered inlegislation.
5. Theofficial bulletin oftheLithuanian Standardization Board willpublish standards inforce
inLithuania, information ondraftstandards andonstandardization policy matters.
Question 496
Paragraph 55oftheFactual Summary refers to"aprocess intransition". Isatransitional period
requested? IfsoLithuania should specify forwhich areas oftheTBT Agreement theyneedthe
transition.
Reply
Whether Lithuania willneedatransitional period forestablishment ofTBTrequirements will
depend onthedateofaccession ofLithuania totheWTO. Lithuania isworking ashardaspossible
toputthenecessary structures andlegislation inplace andwillupdate WTO members asitcontinues
progress inthisarea.
Asoneexample, although Lithuania hassetupanInformation Centre, thiswillnotbeable
toactasanEnquiry Point under theTBTAgreement untilaninfrastructure forexchange ofinformation
hasbeencreated between ministries drafting technical regulations andtheEnquiry Point; theprocedures
fortechnical workofEnquiry Point havebeencreated; andtheEnquiry Point hasbeenproperly equipped
anditsstafftrained.
Question 497
Please submit afulllistwithHSnumbers offoodstuffs subject toquality control.
Reply
Thefollowing listoffoodstuffs issubject toquality control forthereason ofsafety andhealth
inLithuania:
0201-0307 Meat products
0401-0406 Milk anddairy products;
0407-0408.99 Eggproducts;WT/ACC/LTU/12
Page21
0409 Honey
0504 Other animal products;
0701.10-0714.90.90 Vegetables andtheirproducts;
0901-1302 Coffee, tea,spices, grain, seeds andmiscellaneous products;
1501-1507 Fatsandoils;
1601-1905 Meat, fish,sugar, chocolate andconfectionery products;
2001-2106 Vegetables, nuts, mushrooms, fruitproducts, souses, soups
andmiscellaneous products;
2201-2209 Water, beverages, vinegar;
2501.00.91.0 Saltforhuman nutrition;
3302.10 Food flavouring materials;
3501.10.90-3503 Casein, albumin, gelatin.
Alldomestic andimported foodstuffs areregulated byofficial foodcontrol authorities -National
Nutrition Centre andState Veterinary Agency. Foodstuffs tobeimported intoLithuania must be
accompanied byahealth certificates andaveterinary certificate forallfoodstuffs ofanimal origin,
oraphytosanitary certificate forallunprocessed foodstuffs ofplant origin.
Trade-Related Investment Measures
Question 498
WenoteLithuania 'sstatement thatitmaintains noTRIMs andwilling tofullyimplement
theprovisions oftheWTO TRIMs Agreement upon thedateofaccession, without exceptions or
transition periods. Weseekacommitment tothiseffect beincluded intheprotocol package.
Reply
Lithuania commits tofullyimplement theprovisions oftheWTO TRIMs Agreement upon
thedateofaccession without exceptions ortransition periods.
State Trading Entities
Question 499
Inthereply toQuestion 353,Lithuania refers toaState Tobacco andAlcohol Control Agency
which istobeestablished toadminister public tender procedures forgranting licenses. Hasthis
agency beenestablished? Please provide adescription ofthefullactivities ofthisnewentity. We
notethattheState Stock Company "Lietuviskas Midus", withitsstate-granted monopoly onthe
production ofhighalcohol-content beverages, isastate trading enterprise under Article XVII.
Reply
According totheLawonHealth System andtheLawonAlcohol Control, on12July1996
theGovernment established theState Tobacco andAlcohol Control Agency.
TheAgency 'smain objectives andfunctions areasfollows:
- toformulate andimplement statetobacco andalcohol policy incooperation withministries
andother Governmental institutions;
- todiscourage smoking andalcohol consumption inLithuania andtoensure thattobacco and
alcohol harm thepopulation aslittleaspossible.
Implementing theabove objectives, theAgency performs thefollowing functions:WT/ACC/LTU/12
Page22
- monitors hownatural andlegalpersons follow thelaws, resolutions andother legalactson
tobacco andalcohol control issues;
- coordinates theactivities ofministries andother Governmental institutions related to
implementation ofalcohol andtobacco control policy;
- issues andcancels, under theprocedures established bytheGovernment, permits forcompanies
toproduce alcohol products, tobacco andtobacco products; toimport these products; andto
wholesale alcohol products;
- controls localgovernments ’adherence toprocedures forissuing permits forretailtradealcohol
beverages andtobacco products;
- inco-operation withotherinstitutions, controls howcompanies adhere toestablished procedures
forthemanufacture, trade, import andexport oftobacco, itsproducts, andalcohol products;
- controls howlegalandnatural persons follow therequirements provided bythelawsandother
actsrelated toprohibition ofalcohol andtobacco advertising;
- controls howlegalandnatural persons follow therequirements provided bythelawsandother
legalactsrelated torestriction ofsalesofalcohol beverages andtobacco products;
- drafts legalactsonissues within itscompetence andsubmits themforapproval under established
procedures;
- arranges anddrafts statetobacco andalcohol control programs andcontrols theimplementation
ofthese programs;
- advises theexecutive bodies ofself-government onhowtodevelop andimplement thealcohol
and/ortobacco control programs ofmunicipalities;
- monitors theconsumption ofalcohol beverages andtobacco products;
- gathers, analyses andgeneralizes information ontheprices andprice fluctuations ofalcohol
beveragesandtobaccoproductsworldwide,ontheirtaxation,production/import/tradeindicators
inbothforeign countries andLithuania, andfurnishes thisinformation totheGovernment,
concerned ministries, other Governmental institutions;
- establishes theharm alcohol beverages andtobacco products inflict tohuman beings 'health;
- accumulates andsystematizes scientific, technical andlegalinformation onalcohol andtobacco
control issues;
- elaborates andsubmits proposals totheSeimas (Parliament) andother public institutions on
alcohol andtobacco control policy formation andimplementation;
- providesinformationtoministriesandotherpublicandexecutivebodiesoflocalself-government
ontobacco andalcohol control organizational issues;
- performs examinations ofdraftlegalactsandprogrammes within itscompetence;
- maintains contact withappropriate foreign institutions andinternational organizations;
- establishes procedures foradditional marking ofimported alcohol beverages (except beer)with
special symbols ofanenterprise entitled towholesale alcoholic beverages;
- analyses applications, proposals, personal complaints oflegalandnatural persons within its
competence;
- performs other functions provided bylegalacts;
- provides information onitsactivities tothepublic.
TheCorporation "Lietuviskas Midus" Ltd.isacooperative consumers 'enterprise producing
patented alcoholic beverages according toancient Lithuanian methods ofproduction andrecipes. As
thisenterprise hasancient traditions ofproduction, andcurrently itstheonlyoneinLithuania toproduce
national beverages since 1959, ithasbeenentitled toengage intheproduction ofhighalcohol content
(over 22percent) beverages. However, ithasnoobligations tothestate, andthestatedoesnotprovide
itwithprivileges orsubsidies.WT/ACC/LTU/12
Page23
Question 500
Regarding Lithuania 'ssugar industry, wenotethattheGovernment iscurrently supporting the
domestic sugar production andprocessing industry through tariff ratequotas onrawsugar, and
hasexempted theindustry from itsrestrictions under theLawonCompetition (atleastuntil a
sugar manufacturers 'association isestablished). Thereply toQuestion 349indicates thatfour
sugar refineries benefit from thetariff ratequota forimported rawsugar andagree "byconsensus"
howtodistribute thequota. How arerefineries selected aseligible fortheduty-free sugar under
thetariff ratequota? Access tothetariff ratequota forthese fourfirms, andtheexemption granted
these manufacturers 'from Lithuania 'sstatute governing dominant firms (Law onCompetition)
would appear tobeaspecial right under themeaning ofArticle XVII.
Reply
Supplement tothereply toQuestion 220(WT/ACC/LTU/7).
Thegeneral tariff ratequotas referred tointhequestion relating toLithuania ’ssugar regime
arenottariff ratequotas inthesense ofthose negotiated during theUruguay Round andapplied by
some WTO members. Rather, asexplained inthereply toQuestion 201(WT/ACC/LTU/7), theyare
imports under zerotariffs andatafixed quantity thattheLithuanians Government opens temporarily
when theimport ofsugar under theregular MFN ratesisnotenough tosatisfy domestic demand. The
reply toQuestion 464provides information onhowthefoursugar refineries areselected aseligible
forduty-free sugar under fixed quantities. Thesugar refineries arenotexempt from application of
theLawonCompetition. ThatLawwould exempt themembers ofasugar manufacturers ’association
butupthistime, nosuchassociation hasbeenestablished. Also, theGovernment didnotapprove
anyspecial rightforthesugar refineries.
Question 501
Asnoted earlier, webelieve thatLithuania 'smethod ofusing licensing toallow commerce toa
certain point andunder certain circumstances forsome products infactconstitutes State control
oftrade insome cases. Inthose areas where business licenses arerationed arbitrarily ortoact
asaquantitative restrictions, webelieve thatthefirms should bereported under Article XVII.
Reply
Seethereply toQuestion 470.
FreeZones, Special Economic Areas
Question 502
Does Lithuania require thatanyoutput from suchzones soldintherestofLithuania bearthe
normal tariff andtaxes thatareapplied toallother importers? Ifnot,whynot?
Reply
According totheLawontheFundamentals ofFreeEconomic Zones (28June1995), when
goods arebrought intothecustoms territory ofLithuania from azone, Lithuania willapply alllaws
andother legal actswhich regulate theimportation ofgoods from abroad, aswellasimport duties
andtaxesleviedonthegoodsandotherprohibitionsandrestrictionsofaneconomiccharacter.Currently,
Lithuania hasplans forsuchfreetrade zones although noneisyetoperational.WT/ACC/LTU/12
Page24
Government Procurement
Question 503
Lithuania hasstated ithasdrafted aWTO-consistent Law onGovernment Procurement and
submitted totheSeimas forapproval. Please provide anupdate onthestatus ofthislegislation.
Reply
Seethereply toQuestion 504.
Question 504
Does national treatment apply inthefieldofpublic procurement? HastheLawonGovernment
Procurement been adopted andputintoforce? Ifso,please provide details ofitscontents and
information about thedateforitsentry intoforce.
Reply
ALawonPublic Procurement wasadopted on13August 996.TheLawcame intoforce on
1January 1997, andacopyhasbeendeposited withtheWTO Secretariat forreview byWTO and
hopes tocomplete thislegislation byspring 1997.
TheLawallows suppliers (contractors) from Lithuania andforeign states toparticipate in
procurementprocedures.TheLawalsoforeseessomepreferencestonationalproducersofgoods.Article
1part4oftheLaw indicates thattheGovernment mayforeconomic orsocial reasons decide togive
preference forprocurement ofgoods, works andservices thatareproduced, executed orprovided
byenterprises which areregistered inLithuania. Suchdecisions mustbepassed incompliance with
theobligations established byinternational agreements ofLithuania.
Agricultural Policies
Question 505
Inthereply toQuestion 329,Lithuania notes thatduring thetransformation oftheagricultural
sector, subsidies arepaidtoproducers toguarantee aminimum levelofincome. Arethese subsidies
decoupled from production levels ?Does Lithuania intend forthesubsidies tobeatransitional
measure tobephased outovertime? Ifso,howlongdoesLithuania think itwillneedfortransition?
Reply
Thesubsidiesthatareaddedtominimumpurchasepricearepartlydecoupledfromtheproduction
levelbecause onlydefined amount (purchasing quota) ofhighquality produce -nottheentire production
-iseligible forthesubsidies.
TheGovernment intends torevise itsexisting agricultural andtrade policy inthenearfuture.
Thiswillinclude anewsystem fordomestic support foragricultural products. Thenewagricultural
policy aswellasthenewsupport system should bedeveloped byJuly1997. After thedevelopment
ofanewsupport system Lithuania willbeabletoprovide more information onwhatkindofsubsidy
Lithuania isgoing toapply andwhatcharacter thesubsidies willpossess.
Question 506
Regarding minimum prices forimports, inthereply toQuestion 328Lithuania notes thatitwill
onlyimpose additional minimum prices in"extreme situations" andthattheGovernment is
preparinganewresolutionwhichwillstatetheexplicitcriteriafordetermining"extremesituations".
What isthestatus ofthisnewresolution? Under what actual conditions would Lithuania expect
tousesuchmeasures?WT/ACC/LTU/12
Page25
Reply
Thereply toQuestion 328(WT/ACC/LTU/10) (anditsclarification inthereply toQuestion
188(WT/ACC/LTU/7)) covered theminimum (recommended) purchasing prices foragricultural
products, notminimum (reference) prices forimports. There isnodefinition ofcriteria fordetermining
an“extreme situation ”.
Regarding minimum prices forimports seethereply toQuestion 485.
Question 507
Inthereplies toQuestions 331and332,Lithuania states thattheResolution and theLawon
Sugar provide forintroducing reference prices, butLithuania doesnotintend tointroduce such
measures inthefuture. Lithuania states inWTO/ACC/LTU/10 thatitdoesnotintend touse
reference prices inthefuture. Weseekacommitment from Lithuania initsaccession protocol
either toeliminate these provisions ortostate clearly thatnotwithstanding anyprovision ofits
law,Lithuania willobserve theprovisions oftheAgreement onAgriculture prohibiting theuse
ofreference prices onagricultural imports.
Reply
Lithuania willcommit initsaccession protocol nottoapply reference prices. Atthemoment,
theprovisions(thresholdprices)oftheLawonSugarandLawonStateRegulationofEconomicRelations
forAgriculture arenotapplied. Lithuania intends torevise thislegislation andtoeliminate thepossibility
tousereference price forcustom valuation.
Currently import reference prices areapplied onlyfortheimport ofoilproducts (seethereply
toQuestion 485).
Question 508
Regarding Lithuania ’ssubmission inthereply toWT/ACC/4 found inWT/ACC/SPEC/LTU/2,
wenotethatLithuania doesnotuseanaverage three yearbaseperiod. Webelieve thatsome,
ifnotmany, ofthepolicies listed fortheyear1995 were probably alsoinexistence in1994. We
alsobelieve thatusing datafor1996 mayoverstate thelevelofsupport because thisrepresents
atarget andnotanactual expenditure. What isthebasis fordetermining thistarget level for
1996? What hastheactual expenditure been forthefirst3quarters ofcalendar year1996?
Reply
WT/ACC/SPEC/LTU/2 wasintended toprovide background information onsubsidies in
agriculture areafor1995-1996. Itwasnotanegotiating document. Lithuania isatwork onadraft
commitments document.
Question 509
Inthereplies toQuestions 374and375,Lithuania states thatsupport andsubsidy programs were
approved in1993, butnotimplemented until1995, i.e.thedomestic support andexport subsidy
programs noted inWT/ACC/LTU/10 were notimplemented until after Lithuania hadapplied
forWTO membership. Wewould appreciate Lithuania ’sexplanation ofwhyitimplemented
programs atoddswithWTO provisions after deciding tojointheorganization andhowitintends
toaddress thisinconsistency.
Reply
TheLithuanian economy hasbeenintransition fromacentrally planned economy toamarket
economy sinceLithuania re-established itsindependence in1990. During theearlyperiod oftransition,
theGovernment decided toprovide some subsidies toitsagriculture sector which faced particularly
difficult adjustment. Asquickly aspossible, Lithuania alsobegan itsintegration intoworld economicWT/ACC/LTU/12
Page26
institutions, including WTO accession negotiations. Other members oftheWTO maynothavefaced
thissituation ofnegotiating membership atthesame timethattheireconomy isevolving.
Question 510
Inthereply toQuestion 379,Lithuania explains thattheprice level(including subsidies) setfor
mostagricultural products islower thantheworld price level. InQuestion 329,Lithuania clarifies
thatthesubsidy ispaidtotheproducer tooffset thecostoftheinput. Please explain whyLithuania
would want topaythese, since itappears thatfarmers arecompetitive without these payments.
Please explain.
Reply
Thesubsidy thatisadded totheminimum (recommended) purchase price (andischannelled
totheproducers through processors) canbeviewed associal assistance toprimary producers aswell
astoconsumers ofagricultural produce. Ontheonehand, more than1/3ofpopulation livesinthe
country andfaces unemployment problems. During thetransitional period while small-scale business
andother non-traditional activities intherural areas arenotdeveloped enough, itisnecessary to
guarantee occupation andaminimum levelofincomes fortheruralresidents. Thepaidsubsidy offsets
thecosts ofproducer ’sinputs, since theprices formost inputs areontheworld level, while prices
forfinalagricultural produce arelessthanworld price because ofthelowpurchasing power of
consumers. Thesubsidies paidtofarmers reduce thelevelofretail prices andalsocanbeviewed as
partial subsidy toconsumers. Thesupport ofprimary production increases theconsumption ofdomestic
foodproducts which dropped considerably during thetransitional period.
Question 511
Inthereply toQuestion 380,Lithuania states thatexport subsidies were usedin1995 forbeef,
pork, butter, cheese, andcondensed milkandwillbeapplied fordairy products andporkin1996.
Additionally, Lithuania states thatitintends touseexport subsidies inthefuture, especially in
extreme market situations. Export subsidies arethemost trade distorting forms ofagricultural
support. WTO Members arecommitted totheir gradual elimination. Lithuania should bindits
export subsidies atzeroanduseother, lessdistorting, forms ofsupport foritsagricultural sector.
Reply
Lithuania ’sagriculture regime isstillinaperiod oftransition. Lithuania isprepared todiscuss
thespecifics ofthetransition, aswellasthecommitments Lithuania could undertake regarding export
andother agricultural subsidies.
Question 512
Inthereply toQuestion 381,Lithuania states thatitdoesnotbelieve thesubsidies forstorage
andmarketing arecovered byArticle 9.1(d)oftheAgriculture Agreement. Please explain why
youdonotbelieve thesubsidies forstorage andmarketing arecovered byArticle 9.1(d)ofthe
Agriculture Agreement.
Reply
Thereply toQuestion 381stressed that:“Lithuania doesconsider these subsidies thatare
mentioned inthereplies toQuestions 256-257 (WT/ACC/LTU/7), asexport subsidies inthesense
ofArticle 9.1(d)oftheAgreement onAgriculture ”.WT/ACC/LTU/12
Page27
Trade-Related Intellectual Property Régime
Question 513
Lithuania notes thatsome legislation related toitsintellectual property rights regime isstillunder
development, e.g.layout designs forintegrated circuits, geographical indications, amendments
toitsCivil Code toprovide rental rights, andthatitsregime isnotpresently consistent withthe
WTO TRIPs rules. Lithuania should accelerate itslegislative process inorder toensure full
implementation oftheTRIPs agreement atthetimeofWTO accession.
Reply
TheLithuanianministriesandinstitutionsinvolvedwithTRIPs-relatedlegislationareaccelerating
theirwork andpresentation ofnecessary additions andchanges totheLithuanian Parliament. For
example, on17September 1996, theLawonProtection ofPlant Varieties andSeedGrowing was
adopted.
Policies Affecting Trade inServices
Question 514
Indocument WT/ACC/LTU/5, dated November 1995, Lithuania stated thatitisstillintheprocess
ofdrafting lawsandregulations togovern trade inservices. Please provide anupdate onthat
process. What steps inyour government taking toensure thatthese laws andregulations are
consistent withGATS principles?
Reply
After thepreparation ofdocument WT/ACC/LTU/5, theParliament andtheGovernment of
Lithuania approved anumber ofsignificant lawsandregulations togovern trade inservices.
Regarding transport services, anewCivilAviation Code (2May1996), anewInland Transport
Code (24September 1996) andanewRoad Transport Code (19November 1996) werepassed. Anew
Railway Transport Code (4June1996) replaced thetemporary Statute oftheLithuanian Railways.
AnewLawonConstruction (19March 1996) regulates allprocedures foraconstruction,
building, design, andrelated services inLithuania. AlsothisLawcovers some professional services
asengineering andarchitectural.
AnewLawonInsurance waspassed onJuly10,1996. Itestablishes stricter supervision of
insurance companies thanpreviously, introduces reinsurance (thiswasnotincluded intheprevious
law),andintroduces lifeandnon-life insurance asseparate kinds ofinsurance. Bygiving someprivileges
intaxsystem newlawinduce people tousemore ofthistypeofservice.
Aswasmentioned inthereply toQuestion 406(WTO/ACC/LTU/10), amendments and
supplementstotheLawonCommercialBankswereapprovedbytheSeimas(Parliament)on4June1996.
They areaimed atcreating more favourable conditions fortheestablishment andoperations ofthe
branches andsubsidiaries offoreign banks.
TheLawonPublic Trading ofSecurities passed on16January 1996 regulates theactivity of
financial intermediaries inthesecurities market.
AnewLawonMassMedia(2July1996)providesproceduresforgathering,obtaining,preparing
anddistributing mass media, anddescribes therights andresponsibilities ofjournalists, distributors
andowners ofmass media.WT/ACC/LTU/12
Page28
GovernmentResolutionNo.1550(8December1995)providesregulations“OnGrantingLicenses
toProvide Tourism Services ”.
GovernmentResolutionNo.94(17January1996)providesregulationsforresearch,conservation
andreservation oftheimmovable cultural values, alsoconditions oftheseworks, preparation ofprojects,
granting licences onreservation andrestoration ofmovable cultural values.
TheGovernment isworking withresponsible Ministries, organizations andParliament toensure
thattherequirements oftheWTO arereflected inthenewlawsandregulations. Lithuania ’sservices
regime doesnotdiscriminate among services orservice supplier countries (Article II)except asprovided
ineconomic integration agreements which meetthestandards ofArticle V.TheGovernment provides
fullinformation about lawsandregulations intheOfficial Gazette asrequired under Article III.Itis
drafting itsqualification requirements, technical standards andlicensing requirements inaccordance
withtherequirements ofArticle VI.
Trade Agreements
Question 515
Inthereply toQuestion 334,Lithuania notes thattheTrilateral Agreement onAgricultural Trade
wassigned inJune1996 andwillbeenforced after adoption bytherespective Parliaments ofthe
Baltic countries. When doestheTrilateral Agreement come intoforce? Please supply acopy of
theAgreement, including thespecific market access provisions fortheremoval ofbarriers among
thethree countries.
Reply
AFreeTrade Agreement between Lithuania, Estonia andLatvia covering industrial products
came intoforceon1April 1994. AFreeTrade Agreement fortheBaltic countries covering agricultural
products came intoforce on1January 1997. Lithuania hasprovided copies ofbothAgreements to
theWTO Secretariat. BothAgreements provide forfreetrade (nointerim measures) atzerotariffs
among thethree countries.WT/ACC/LTU/12
Page29ANNEX I
1996 1206
Updated listofgoods andservices stillsubject toprice control:
Code according Items subject toprice control Institution
applying controlReasons andperspectives forcontrol
HS NACE
1 2 3 4 5
- - Price oflandsoldbytheState, price oflandfor
computing oflandtaxandlandlease taxGovernment Regulation oflandprice isrelated tothe
restitution oftherights toprivate land
ownership. Having implemented landreform and
having restored property ownership, the
regulation ofprices forlandwillbeabolished.
- - Taxtariffs forlease oftheState-owned landandthe
State-owned water reservoirsGovernment Regulation isrelated totheState ownership for
these items.
4010 Electricity production andtransmission Government Controlled because ofabsence ofsufficient
competition inthemarket.
4020 Distribution ofgasfuel(including onlythedistribution of
natural gas)Government Controlled because ofabsence ofsufficient
competition inthemarket.
4030 Supply ofheatandhotwater Government Astheprices forheating provided forresidents
arepartly subsidised from theState Budget, State
price control willremain inthenearest future
during the1996-1997 heating season. Itis
planned todecentralise theheating economy by
transferring ittolocalgovernments.
Prices andtariffs forgoods andservices ofeconomic
entities having adominant position inthemarket:
2412 -mineral fertilizers; State Competition Controlled because ofadominant position inthe
2694 -cement; andConsumer market.
1410 -limestone; Protection Office Having adopted thenewLawonCompetition,
1410 -limestone-powder. thisprice control willbeabolished.
4100 Extraction, distribution andcleaning ofwater Local
governmentsControlled because ofamonopoly position ofthe
enterprises.
6010 Transportation ofpassengers bylocalrailway routes Ministry of
TransportControlled because ofamonopoly position ofthe
stock company "Lithuanian railways".WT/ACC/LTU/12
Page30Code according Items subject toprice control Institution
applying controlReasons andperspectives forcontrol
HS NACE
1 2 3 4 5
6021 Transportation ofpassengers byother typeofland
transport (passenger buses oflocalandlongdistance
routes)Ministry of
Transport and
Local
governmentsSubsidised service, itisplanned toliberalise
these prices.
6022 Passenger transportation bytaxi Local
governmentsControlled because ofspecific character ofthis
service inorder toavoid ataxidrivers abuse of
unreasonably highprices.
6120 Transportation ofpassengers bylocalshiproutes Ministry of
TransportItisplanned toliberalise prices forthese
services.
6323 Control activities oftheairport andaeroplanes 'flights,
onlandservices (airnavigation, terminal airnavigation,
landing, guide-vehicle, follow-me, parking, security
(Government Resolution No.866,21061995)Ministry of
TransportControlled because ofamonopoly position ofthe
airports.
6210 Transportation ofpassengers byairtransport Ministry of
TransportRegulated onbasis ofinternational agreements.
6322 Activities ofnavigation, shipruling andanchorage,
raising ofsankships (dues oftheState Klaipëda SeaPort
for:tonnage, canal, lighthouse, pilotage, regulation of
shiptraffic, anchorage, sanitary, people rescuing and
anti-pollution activities, mooring, quay, passenger toll
(Government Resolution No.410,10061993)Ministry of
TransportControlled because ofamonopoly position inthe
market.
6411 Postal services oftheNational postoffice (collection,
transportation anddelivery ofletters, postcards, printed
matter, sekograms, aerograms, small packages; receiving
andpayment ofmoney orders; supply ofpostal cash
(giro) banking operations; delivery (payment) ofpensions
andallowances)Ministry of
Communications
andInformation
TechnologySubsidised services ofsocial importance.
6420 Communication services (transmission byusing
international, intertown, localtelephone lines,;
switchboard services oftelephone andtelex, data
transmission, lineradio broadcasting)Ministry of
Communications
andInformation
TechnologyServices ofsocial importance, controlled because
ofamonopoly position oftheState enterprise
"Lithuanian Telecom".WT/ACC/LTU/12
Page31Code according Items subject toprice control Institution
applying controlReasons andperspectives forcontrol
HS NACE
1 2 3 4 5
70 House rentprices oflocalgovernments 'apartments Local
governmentsControlled inorder toprotect consumers from
unreasonably highprices.
9000 Transportation ofgarbage andliquid sewage, careof
courtyard territoryLocal
governmentsControlled inorder toprotect consumers from
unreasonably highprices
6340,
10Maximum tariffs forservices provided bycustoms
intermediatorsState Competition
andConsumer
Protection OfficeInorder toabolish tariffs control thedraft
Government Resolution isunder preparation
now.
7492 Tariffs forapartment security services (Vilnius,
Klaipëda)Security Police
Divisions under
Chief Police
CommissariatsServices ofspecific character, absence of
sufficient competition.
7422 Tariffs forservices oflegalisation ofpotential dangerous
equipment, produced inLithuania orimported, and
tariffs forother similar servicesTechnical
Supervision
Service under the
Ministry of
Social Security
andLabourServices ofspecific character, absence of
sufficient competition.
-Tariffs forservices onissuing ofanumber ofpublisher
oflocalcredit card, acodeofdrafter oftechnical
documents andofanassortment number ofcanned foodLithuanian
Standards Board
under the
Ministry of
Public
Administration
andLocal
AuthoritiesServices ofspecific character, absence of
sufficient competition.
7422 Tariffs forissuing ofquality certificates State Quality
Inspection under
theState
Competition and
Consumer
Protection OfficeServices ofspecific character, absence of
sufficient competition.WT/ACC/LTU/12
Page32Code according Items subject toprice control Institution
applying controlReasons andperspectives forcontrol
HS NACE
1 2 3 4 5
851 Tariffs ofhealth careservices forpersons, supported by
government orlocalgovernment andprovided by
government orlocalgovernment health careinstitutionsMinistry of
Health CareControlled inorder toprotect consumers from
unreasonably highprices
851 Tariffs forpaid(private) health careservices, provided
bygovernment orlocalgovernment health care
institutionsMinistry of
Health CareControlled inorder toprotect consumers from
unreasonably highprices
30.03;
30.04Maximum trade markups formedicines Ministry of
Health CareControlled inorder toprotect consumers from
unreasonably highprices.
523 Retail prices formedicines andmedical materials of
necessary assortment (about 350items)Ministry of
Health CareControlled inorder toprotect consumers from
unreasonably highprices.
851 Prices forservices provided byprofit seeking
institutions. These prices cannotexceed 60%ofprices
setforservices ofthestateinstitutionsMinistry of
Health CareControlled inorder toprotect consumers from
unreasonably highprices.
- - Minimum prices forstanding (non-cut) timber according
tothekinds ofwood, finished wood andwoodshed
timberMinistry of
ForestryMinimum prices aresetinorder toavoid abuse
ofunreasonably lowprices setbytheState
forestries.
44.03
44.06
44.03
44.03
44.03
44.03
44.03
44.01Minimum prices forround timber, setaccording tokinds
ofassortment:
--cutlogs, including timber;
--logsforrailway sleepers;
--matchwood;
--paperwood;
--logsforpackage production;
--thin-logs;
--wood forslabs;
--fire-wood according tothegroups of
changeabilityMinistry of
ForestryMinimum prices aresetinorder toavoid abuse
ofunreasonably lowprices setbytheState
forestries.
44.03 Fixed prices forveneer rawmaterial Ministry of
ForestryExclusive position inthemarket, absence of
sufficient competition.