Opinion of the European Central Bank of 30 December 2005 at the request of Lietuvos bankas on a draft law amending the Lietuvos bankas Act (CON/2005/60)
Date: 2005-12-30
Institutions: European Central Bank
Subjects: Lithuania, central bank, competence of the institution, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 30 December 2005  

at the request of Lietuvos bankas 

on a draft law amending the Lietuvos bankas Act 

(CON/2005/60) 

1. 

On 9 November 2005 the European Central Bank (ECB) received a request from Lietuvos bankas 

for an opinion on a draft law amending the Lietuvos bankas Act (hereinafter the ‘draft law’).  

2. 

The  ECB’s  competence  to  deliver  an  opinion  is  based  on  the  first,  third  and  fifth  indents  of 

Article 2(1) of Council Decision 98/415/EC of 29 June 1998 on the consultation of the European 
Central Bank by national authorities regarding draft legislative provisions1, as the draft law relates 

to currency matters, Lietuvos bankas and payment and settlement systems. In accordance with the 

first  sentence  of  Article  17.5  of  the  Rules  of  Procedure  of  the  European  Central  Bank,  the 

Governing Council has adopted this opinion. 

3. 

The ECB understands that the main objective of the draft law is to bring the Lietuvos bankas Act 

into  line  with  the  Treaty  establishing  the  European  Community  and  the  Statute  of  the  European 

System  of  Central  Banks  and  of  the  European  Central  Bank.  In  the  ECB’s  Convergence 
Report 20042, the ECB noted that Lithuanian legislation concerning Lietuvos bankas’s operations, 

including  Lithuania’s  Constitution,  the  Lietuvos  bankas  Act,  the  Act  on  money  and  the  Act  on 

credibility of the litas, required adaptation pursuant to Article 109 of the Treaty.  

4. 

The ECB notes that the draft law represents a comprehensive revision of the Lietuvos bankas Act. 

It welcomes the adaptations proposed in the draft law. Once enacted, and subject to the following 

comments, the draft law will contribute to the completion of the legislative adaptations required for 

the abrogation of Lithuania’s derogation. The ECB notes that the draft law is intended to enter into 

force on the day on which Lithuania’s derogation is abrogated pursuant to the procedure provided 

by Article 122(2) of the Treaty.  

5. 

As a general remark, the ECB notes that the grounds for dismissal of the Chairperson of Lietuvos 

bankas’s Board as laid down in Lithuania’s Constitution are not compatible with Article 14.2 of the 

Statute. Articles 75 and 84(13) of the Constitution allow the Chairperson to be dismissed following 

a  vote  of  no  confidence,  which  is  not  a  ground  for  dismissal  under  Article  14.2  of  the  Statute. 

1  
2  

OJ L 189, 3.7.1998, p. 42. 
Convergence Report 2004, pp. 225-226. 

 
 
 
                                                      
Moreover,  Article  125(2)  of  the  Constitution,  which  provides  that  Lietuvos  bankas  has  the 

exclusive  right  to  issue  currency,  still  requires  adaptation  in  order  to  bring  it  into  line  with  the 
Treaty and the Statute3. The ECB also notes that certain of Lietuvos bankas’s functions and duties 

are provided for in other legal acts, such as the Act on money and the Act on credibility of the litas. 

The  ECB  draws  Lietuvos  bankas’s  attention  to  the  fact  that  such  legal  acts  must  be  brought  into 

line with the Treaty and the Statute prior to the abrogation of Lithuania’s derogation.  

6. 

The ECB welcomes the fact that Article 1 of the draft law clarifies that Lietuvos bankas will be an 

integral  part  of  the  European  System  of  Central  Banks  (ESCB)  and  that  it  will  carry  out  the 

ESCB’s  tasks  in  accordance  with  the  guidelines  and  instructions  of  the  ECB,  as  required  by 

Article 14.3 of the Statute. Article 1 of the draft law also states that the assets of Lietuvos bankas 

belong to Lietuvos bankas and that Lietuvos bankas manages, uses and disposes of these assets in 

accordance with the terms prescribed by Community law and the Lietuvos bankas Act. The ECB 

understands  that  this  provision  reinforces  Lietuvos  bankas’s  right  to  manage  its  resources  and 

contributes  to  the  achievement  of  the  ESCB’s  objectives.  This  provision  of  the  draft  law  is 

welcome.  

7. 

The  ECB  also  welcomes  the  provisions  of  Article  2  of  the  draft  law  which  states  that,  in 

accordance with the requirements of the Treaty, Lietuvos bankas has the right to issue banknotes 

and coins.  

8. 

The  reformulated  statutory  objectives  of  Lietuvos  bankas  (Article  3  of  the  draft  law)  are  now 

consistent with Article 105(1) of the Treaty and Article 2 of the Statute. However, Lietuvos bankas 

might  consider  referring  to  the  ‘general  economic  policies  in  the  Community’  instead  of 

‘Community general economic policies’, in order to reflect the wording used in the Treaty.   

9. 

The ECB notes that Article 4 of the draft law makes a distinction between ESCB-related tasks and 

the other tasks of Lietuvos bankas, listing the issuance of banknotes and coins among the former. 

However, the issuance of coins is the prerogative of Member States and not an ESCB task.  

10.  Under  Article 4  of  the  draft  law  Lietuvos  bankas,  as  part  of  its  other  tasks,  would  be  entitled  to 

grant loans to credit institutions, secured by adequate collateral in accordance with the procedure, 

conditions  and  terms  established  by  Lietuvos  bankas.  The  ECB  understands  that  Article  4  of  the 

draft law provides for a mechanism to tackle a financial crisis if Lietuvos bankas deems emergency 

liquidity  assistance  to  be  necessary  and  appropriate  in  particular  exceptional  circumstances.  The 

ECB welcomes the fact that Article 4 of the draft law states that this assistance should be provided 

‘without  prejudice  to  the  requirements  derived  from  [Lietuvos  bankas’s]  participation  in  the 

European  System  of  Central  Banks’,  thus  providing  a  safeguard  to  ensure  compliance  with  the 

prohibition on monetary financing contained in Article 101 of the Treaty.  

3  

See  ECB  Opinion  CON/2005/38  of  26  October  2005  at  the  request  of  Lietuvos  bankas  on  a  draft  law  amending 
Article 125 of the Constitution of the Republic of Lithuania; European Central Bank Convergence Report 2004, pp. 225-
226. 

2 

                                                      
11.  According to Article 4 of the draft law, Lietuvos bankas, acting as an integral part of the ESCB, 

defines monetary policy in conjunction with other members of the ESCB and implements it. Since, 

under Article 12.1 of the Statute, the Community’s monetary policy is exclusively formulated by 

the Governing Council with the result that such monetary policy will extend to Lithuania upon the 

adoption of the euro by Lithuania, the draft law should be amended to state that Lietuvos bankas 

‘implements monetary policy’ without reference to the definition of monetary policy. 

12.  The ECB also notes that under Article 4 of the draft law Lietuvos bankas is to promote the sound 

and  efficient  operation  of  payment  and  securities  settlement  systems.  This  provision  of  the  draft 

law replicates Article 8(1)(8) of the existing Lietuvos bankas Act. For the sake of clarity, Lietuvos 

bankas could consider amending this provision to expressly include clearing systems.   

13.  Article  4  of  the  draft  law  provides  that  Lietuvos  bankas  is  to  collect  from  state  institutions  and 

economic entities the statistical information necessary for the performance of the ESCB’s tasks and 

Lietuvos  bankas’s  tasks.  Under  Article  28  of  the  draft  law,  state  and  municipal  institutions  and 

economic entities are to provide Lietuvos bankas with the information required for the performance 

of its functions. Lietuvos bankas might consider whether Article 4 of the draft law should also refer 

to  the  municipal  institutions  from  which  statistical  information  is  to  be  collected.  In  addition, 

Article  28  of  the  draft  law  states  that  Lietuvos  bankas  may  provide  information  to  the  ECB,  the 

NCBs  of  the  other  Member  States  and  other  institutions,  if  such  information  is  required  for  the 

performance of their functions, provided that Lithuanian laws do not prohibit the provision of such 

information.  For  the  sake  of  clarity,  the  ECB  suggests  that  Article  28  of  the  draft  law  should 

specify that this prohibition does not apply to the provision of statistical information to the ECB, 

which 

is  subject 

to 

the  confidentiality 

regime 

laid  down 

in  Article 8  of  Council 

Regulation (EC) 2533/98 of 23 November 1998 concerning the collection of statistical information 
by the European Central Bank4.   

14.  The draft law also amends the Lietuvos bankas Act in relation to the powers of Lietuvos bankas’s 

Board. In particular, Article 5 of the draft law provides, among other things, that the Board shall 

approve the allocation of the profit for the financial year. The ECB understands that the rules for 

the allocation of profits are laid down in Article 23(3) of the Lietuvos bankas Act. Lietuvos bankas 

should  consider  the  possibility  of  including  a  reference  to  Article  23(3)  in  the  provisions  in  the 

draft law dealing with the powers of the Board.   

15.  Article  6  of  the  draft  law  expressly  states  that  the  Deputy  Chairpersons  and  the  Members  of  the 

Board of Lietuvos bankas have the right to appeal to the Vilnius District Court against any decision 

to  dismiss  them  prior  to  the  expiry  of  their  terms  of  office.  The  ECB  welcomes  this  provision 

which  reinforces  the  personal  independence  required  of  the  members  of  the  decision-making 

bodies  of  NCBs  under  Article  108  of  the  Treaty.  This  provision  of  the  draft  law  must  enter  into 

force immediately, and not await the adoption of the euro in Lithuania.  

4  

OJ L 318, 27.11.1998, p. 8. 

3 

                                                      
16.  Article  7  of  the  draft  law  amends  the  voting  rules  of  Lietuvos  bankas’s  Board.  In  particular,  the 

draft  law  states  that  the  decisions  of  the  Board  shall  be  adopted  with  a  majority  of  at  least  three 

votes.  The  ECB  welcomes  this  provision,  since  it  reinforces  the  principle  of  collegiality  in  the 

decision making of Lietuvos bankas.   

17.  The ECB understands that Article 8(2) of the draft law refers to Lietuvos bankas’s support of the 

participation of its staff members in cultural and sporting events organised by other central banks. 

The ECB notes that this activity is not specifically ESCB-related, and recommends that Lietuvos 

bankas clarifies in the draft law that it may support the participation of its staff members in cultural 

and sporting events organised by foreign central banks or international monetary institutions.    

18.  Article 9 of the draft law repeals the reference to the detailed lists of information which constitutes 

banking secrets and provides a more general definition of banking secrecy. In particular, the ECB 

notes that Article 38 of the Statute requires that any ESCB-related information falling within the 

category  of  non-public  information  should  be  covered  by  the  obligation  of  professional  secrecy. 

The  reformulation  of  the  definition  of  bank  secrecy  in  Article  9  of  the  draft  law  is  therefore 

welcome.  

19.  The ECB notes that the draft law materially amends Chapter 4 of the Lietuvos bankas Act, which 

deals with monetary policy issues. In particular, the draft law contains provisions similar to those 

of  Articles  17  and  18  of  the  Statute.  The  ECB  welcomes  this  amendment,  since  it  reflects  a 

fundamental change in the definition and implementation of monetary policy in Lithuania. As from 

the  day  on  which  Lithuania’s  derogation  is  abrogated,  the  responsibility  for  defining  and 

implementing Lithuania’s monetary policy will be vested in the ESCB. It is suggested that the title 

of Article 25 of the Lietuvos bankas Act should be amended to reflect the content of this article, 

i.e.: ‘Opening of accounts and monetary policy operations’. In addition, the reference to monetary 

policy  being  defined  in  conjunction  with  other  ESCB  members  in  the  proposed  new  wording  of 

Article 25 of the Lietuvos bankas Act should be removed, as monetary policy for the euro area is 

exclusively formulated by the Governing Council.  

20.  The  draft  law  also  amends  Chapter  5  of  the  Lietuvos  bankas  Act  with  a  view  to  providing  that 

Lietuvos  bankas  should  manage  its  foreign  reserves  in  accordance  with  the  requirements  of 

Community  law.  Under  Article  105(2)  of  the  Treaty,  one  of  the  basic  tasks  to  be  carried  out 

through the ESCB is to hold and manage the official foreign reserves of the Member States. The 

ECB notes that the draft law does not amend Article 36 of the Lietuvos bankas Act, which states 

that  Lietuvos  bankas  may,  on  its  own  initiative,  or  in  accordance  with  an  agreement  with  the 

Lithuanian  Government,  enter  into  settlement  agreements  with  foreign  public  and/or  private 

institutions on behalf of the Lithuanian Government. The draft law  should more precisely reflect 

the fact that the Lithuanian Government may not influence the management of the official foreign 

reserves held by Lietuvos bankas. The management of the official foreign reserves will be carried 

4 

out  independently  by  Lietuvos  bankas  as  an  integral  part  of  the  ESCB,  upon  the  adoption  of  the 
euro by Lithuania5.  

21.  Article 29 of the draft law concerns sanctions for non-compliance with statistical obligations and 

confers on Lietuvos bankas a right to impose sanctions with respect to infringements in the field of 

statistics, in so far as non-ESCB tasks are concerned. As certain situations relating to the ESCB’s 

statistics may not be covered by the ECB’s sanctions regime, it is suggested that Article 29 of the 

draft law should state that Lietuvos bankas has a right to impose fines and penalties on economic 

entities for breaches of the requirement to submit statistical information to Lietuvos bankas, in so 

far as such breaches do not fall within the scope of the ECB’s sanctions regime.  

22.  The ECB notes that Article 37 of the Lietuvos bankas Act provides for the prohibition on monetary 

financing without, however, referring to the relevant provisions of Community law. The Lietuvos 

bankas Act should state that the prohibition on monetary financing derives from Article 101 of the 

Treaty and that the definitions for the application of this prohibition are specified by the Council in 
accordance  with  the  Treaty6.  Alternatively,  Article  37  could  simply  be  deleted  since  the  relevant 

provisions of Community law, namely Article 101 of the Treaty and Regulation No 3603/93, are 

directly applicable in the Member States. 

23.  The  ECB  also  notes  that  Lithuanian  law  should  contain  safeguards  against  interference  by 

government institutions in Lietuvos bankas’s activities and, in particular, ESCB-related tasks. The 

ECB  observes  that,  under  the  Act  on  the  State  Audit  Office,  this  Office  is  empowered  to  check 

whether the State’s property is being effectively managed. The ECB emphasises that the activities 

of the State Audit Office should not interfere with the review undertaken by the external auditor of 

Lietuvos  bankas  approved  under  the  procedure  which  would be  applicable  to Lithuania  upon  the 

adoption of the euro by Lithuania, set out in Community law. To this end, the Lietuvos bankas Act 

and  any  other  legal  acts  should  include  sufficient  safeguards  concerning  the  review  of  Lietuvos 
bankas’s activities to ensure the independence of Lietuvos bankas7.  

5  

6  

7  

See ECB Opinion CON/2002/18 of 9 July 2002 at the request of the Belgian Ministry of Finance on a draft for a new 
Article  879  of  the  Companies  Code,  introduced  by  the  Programme  Law,  as  well  as  several  articles  interpreting  and 
amending the Organic Law of the Nationale Bank van België/Banque Nationale de Belgique, introduced by paragraphs 6 
to 10 of Article 141 of the draft law on the prudential supervision of the financial sector and financial services.  
Cf. Article 103(2) of the Treaty and Council Regulation No 3603/93 of 13 December 1993 specifying definitions for the 
application of the prohibitions referred to in Articles 104 and 104b (1) of the Treaty (OJ L 332, 31.12.1993, p. 1). 
Cf.  ECB  Opinion  CON/2002/22  of  2  September  2002  at  the  request  of  the  Swedish  Ministry  of  Finance  on  a  draft 
legislative  proposal  establishing  the  National  Audit,  including  proposed  amendments  to  the  Sveriges  Riksbank  Act 
(1988:1385). 

5 

                                                      
24.  This opinion will be published on the ECB’s website. 

Done at Frankfurt am Main, 30 December 2005. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

6