Opinion of the European Central Bank of 18 May 2010 on the legal status of Lietuvos bankas’s assets, terms of office and remuneration of Board members, immunity of foreign reserves of foreign central banks and annual financial statements of Lietuvos bankas (CON/2010/42)
Date: 2010-05-18
Institutions: European Central Bank
Subjects: Lithuania, central bank, closing of accounts, foreign-exchange reserves, institutional activity, national law, remuneration of work

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 18 May 2010  

on the legal status of Lietuvos bankas’s assets, terms of office and remuneration of Board members, 

immunity of foreign reserves of foreign central banks and annual financial statements of Lietuvos 

bankas 

(CON/2010/42) 

Introduction and legal basis 

On 12 April 2010 the European Central Bank (ECB) received a request from the Lithuanian Ministry of 

Finance for an opinion on a draft law amending and supplementing Articles 1, 10, 17, 35 and 49 of the 

Law on Lietuvos bankas (hereinafter the ‘draft law’). 

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 

Functioning of the European Union and the third indent 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 Lietuvos bankas. 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. 

1. 

Purpose of the draft law 

The aim of the draft law is to: (a) specify the legal status of Lietuvos bankas’s assets; (b) reduce the terms 

of  office  of  the  Board  members  of  Lietuvos  bankas  (with  the  exception  of  the  Chairman  of  the  Board) 

from  nine  to  six  years;  (c)  amend  and  specify  the  remuneration  of  the  Chairman  and  other  Board 

members; (d) provide for not only the Deputy Chairmen but also other Board members to deputise for the 

Chairman of the Board; (e) allow other Board members to participate in the meetings of the Government 

in an advisory capacity; (f) provide explicitly for immunity from appropriation by third parties of foreign 

reserves of foreign central banks held in Lietuvos bankas; and (g) ensure that the use of the term ‘annual 

financial statements’ in the Law on Lietuvos bankas is in line with other national legislation. 

2. 

Legal status of Lietuvos bankas’s assets  

2.1  The ECB is aware of and concerned about the unclear legal status of Lietuvos bankas’s assets. The 

primary  legal  registration  of  Lietuvos  bankas’s  real  property,  after  the  restoration  of  the 

1  

OJ L 189, 3.7.1998, p. 42.  

 
 
 
 
 
                                                 
independence of Lithuania, confirmed Lietuvos bankas’s ownership of its real property2. However, 

the ECB understands that, after a unilateral change of the data in the State Real Property Cadastre 

and  Register,  the  Lithuanian  State  is  currently  considered  to  be  the  legal  owner  of  Lietuvos 

bankas’s real property and that there is a risk that Lietuvos bankas would only be able to dispose of 

its  property  with  the  approval  of  government  authorities.  This  situation  undermines  both  the 

institutional  and  the  financial  independence  of  Lietuvos  bankas.  Instructions  from  the  state 

authorities to Lietuvos bankas or intervention by such authorities with regard to the assets held by 

Lietuvos  bankas  would  be  contrary  to  the  principle  of  Lietuvos  bankas’s  institutional 

independence. Lietuvos bankas’s financial independence would also be undermined, since it would 

no  longer  be  entirely  free  to  decide  on  the  allocation  of  its  resources,  and  it  could  be  unable  to 

secure sufficient means for the performance of its tasks.  

2.2  Under the current legal situation, it is unclear whether Lietuvos bankas could independently sell its 

real property and keep the proceeds from such sale. If Lietuvos bankas could not keep the proceeds, 

this  would  raise  doubts  as  to  whether  the  current  legislation  is  compatible  with  the  monetary 

financing  prohibition  laid  down  in  Article  123(1)  of  the  Treaty  and  supplemented  by  Council 

Regulation (EC) 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 Treaty3.  

2.3  The  ECB  understands  that  this  problem  has  arisen  because  no  national  law  explicitly  specifies 

whether  Lietuvos  bankas  has  the  right  to  own  the  assets,  or  whether  Lietuvos  bankas  can  only 

manage and hold such assets on trust. However, the ECB also understands that Lietuvos bankas has 

historically included these assets in its annual financial statements. 

2.4  Therefore, the ECB welcomes the fact that it is explicitly specified in the Law on Lietuvos bankas 

that  Lietuvos  bankas  legally  owns  the  assets  belonging  to  it,  ensuring  that  the  legal  title  and 

economic control of the assets will rest with the Lietuvos bankas. 

2.5  The  ECB  would  also  welcome  such  specification  of  the  legal  status  of  Lietuvos  bankas’s  assets 

being  applied  by  virtue  of  the  law,  i.e.  without  an  additional  requirement  for  Lietuvos  bankas  to 

apply to administrative authorities with regard to the change in the legal status of its real property, 

as provided for in Article 6 of the draft law. Otherwise, this requirement raises concerns about the 

institutional independence of Lietuvos bankas.  

3. 

Terms of office of Board members  

3.1  As noted in the ECB’s Convergence Report of May 20084, when statutes of a national central bank 

(NCB) are amended, the amending law should safeguard the security of tenure of the Governor and 

of  other  members  of  decision-making  bodies  who  may  have  to  deputise  for  the  Governor.  The 

Treaty and the Statute of the European System of Central Banks and of the European Central Bank 

2  
3  
4  

The first paragraph of point 2 of the Explanatory memorandum to the draft law.  
OJ L 332, 31.12.1993, p. 1.  
ECB Convergence Report of May 2008, p. 19. 

2

 
 
                                                 
(hereinafter the ‘Statute of the ESCB’) require such security of tenure. Article 14.2 of the Statute of 

the ESCB does not restrict the security of tenure of office to Governors, while Article 130 of the 

Treaty and Article 7 of the Statute of the ESCB refer to ‘members of the decision-making bodies’ 
of NCBs, rather than to Governors specifically5.   

3.2  The change in the length of the terms of office of Board members should not affect the length of 

the  terms  of  office  of  the  current  members  and  the  new  provisions  should  only  apply  to  future 

terms.  In  order  to  protect  the  personal  independence  of  current  Board  members,  the  draft  law 

should  specifically  provide  that  the  reduction  of  the  term  of  office  only  applies  to  future 

appointments of Board members, and that the current members will carry out their duties until the 

expiry of their full terms of office. 

4. 

Remuneration of Board members  

4.1  As noted in the Convergence Report of May 2008 under the heading ‘Autonomy in staff matters’, 

Member States may not impair an NCB’s ability to employ and retain the qualified staff necessary 

for the NCB to perform independently the tasks conferred on it by the Treaty and the Statute of the 

ESCB. In addition, an NCB may not be put into a position where it has limited or no control over 

its staff, or where the government of a Member State is in a position to influence the NCB’s policy 
on staff matters6. This point, which is derived from the concept of financial independence, has been 
stressed by the ECB in several recent opinions on matters concerning national central bank staff7. In 

its  opinion  on  draft  Italian  legislation  on  the  overall  remuneration  of  NCB  staff,  the  ECB  also 

pointed out ‘that the ECB defines autonomously its staff’s conditions of employment and that this 

autonomy forms part of the ECB’s independence as guaranteed by Article 108 [now Article 130] of 
the Treaty and Article 36 of the Statute [of the ESCB]’8. 

4.2  According  to  the  current  Article  10(7)  of  the  Law  on  Lietuvos  bankas,  the  Board  of  Lietuvos 

bankas  decides  the  salaries  of  the  Deputy  Chairmen  and  Board members,  taking  into  account  the 

salary of the Chairman of the Board. The ECB notes that, according to the proposed amendment, 

the salaries of the Deputy Chairmen and Board members can not exceed 90 percent of the salary of 

the Chairman of the Board. The ECB also notes that the draft law proposes reducing the salary of 

the Chairman of the Board. 

4.3 

In order to protect Lietuvos bankas’s autonomy in staff matters, which is an aspect of the principle 

of  central  bank  independence  under  Article  130  of  the  Treaty,  the  Lithuanian  authorities  have  an 

obligation to ensure that any amendment to the legislative provisions on the determination  of the 

5  
6  
7  

8  

ECB Convergence Report of May 2008, p. 19. 
ECB Convergence Report of May 2008, p. 22.  
See, e.g., paragraph 2.2 of Opinion CON/2009/47,  paragraph 2.2 of Opinion CON/2009/15 and paragraph 2.2 of Opinion 
CON/2008/9.  
See paragraph 3.2.2 of Opinion CON/2008/10. 

3

 
 
                                                 
remuneration  of  Board  members  (including  the  Chairman)  of  Lietuvos  bankas  is  decided  in 
cooperation with Lietuvos bankas, taking due account of the views of Lietuvos bankas9.  

4.4 

In  addition,  any  amendment  to  the  remuneration  of  Board  members  (including  the  Chairman) 

should not affect the terms under which the current Board members (including the Chairman) have 
been appointed and should only apply to future appointments10. 

5. 

Immunity of foreign reserves of foreign central banks 

The  ECB  welcomes  the  draft  law  provisions  which  explicitly  protect  the  foreign  reserves  owned  by 

foreign central banks and held in the accounts opened with Lietuvos bankas from appropriation by third 

parties, both judicial and extra-judicial, thereby ensuring greater legal certainty. 

6. 

Harmonisation of the term ‘annual financial statements’ 

6.1  The  consulting  authority  has  noted11  that  the  amendment  of  Article  49  of  the  Law  on  Lietuvos 

bankas is editorial in nature, and is aimed at ensuring harmonisation of the use of the term ‘annual 

financial statements’ in the Law on Lietuvos bankas with other national legislation. 

6.2  However, in the Law on Lietuvos bankas it should remain clear that the annual financial statements 

of  Lietuvos  bankas  consist  only  of  a  balance-sheet,  a  profit  and  loss  statement  and  explanatory 

notes (as specified in the current version of the Law), and that the proposed new wording should 

leave no room for ambiguity as regards the content of the annual financial statements. 

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

Done at Frankfurt am Main, 18 May 2010. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

9  
10   
11  

Also see paragraph 3 of CON/2009/47. 
See paragraph 3.2.2 of CON/2008/10. 
Fifth paragraph of point 2 of the Explanatory memorandum to the draft law. 

4