Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

LITHUANIA

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
Share
  • ShareShare
Show Summary Details

(Position as of December 31, 2006)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: May 3, 1994.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2006.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)Lithuania notified the IMF that certain exchange restrictions have been imposed in accordance with the relevant UN Security Council resolutions and EU regulations.
Other security restrictionsIn accordance with UN resolutions, sanctions have been imposed against individuals, groups, and organizations associated with terrorism.
References to legal instruments and hyperlinkswww3.lrs.lt/cgi-bin/getfmt?C1=e&C2=21921.
Exchange Arrangement
CurrencyThe currency of Lithuania is the Lithuanian litas.
Exchange rate structureUnitary.
Classification
Currency board arrangementThe litas is pegged to the euro at the rate of LTL 3.4528 per €1 within the context of the ERM II.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketAny natural or juridical person may enter into a forward exchange contract with a bank operating in Lithuania or in a foreign country without limitation.
References to legal instruments and hyperlinkswww3.lrs.lt/cgi-bin/getfmt?C1=e&C2=21921.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangements
Bilateral payments arrangements
OperativeYes.
Regional arrangementsLithuania is a member of the EU.
Administration of controlParliament has legislative authority in foreign exchange and trade matters. A banking law has delegated to the Bank of Lithuania (BOL) the authority to issue regulations governing foreign exchange transactions. All foreign exchange transactions involving domestic currency must be effected through authorized credit institutions licensed by the BOL. Authorized banks are allowed to transact among themselves, as well as with residents and nonresidents; the BOL may limit on a case-by-case basis the types of transactions that may be conducted as a part of enforcement measures applied by the Law on Banks, Article 72.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesImports or exports of domestic or foreign cash from or to countries outside the EU, exceeding LTL 10,000 or its equivalent must be declared in writing to customs by presenting a traveler’s declaration. Transactions exceeding the equivalent of LTL 50,000 are reported to the Financial Crime Investigation Service.
On exportsYes.
On importsYes.
References to legal instruments and hyperlinkswww3.lrs.lt/cgi-bin/getfmt?C1=e&C2=260890; www3.lrs.lt/cgi-bin/getfmt?C1=e&C2=262724.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadNatural and juridical persons must report the opening and closing of these accounts to the tax authorities.
Accounts in domestic currency held abroadn.r.
Accounts in domestic currency convertible into foreign currencyn.r.
References to legal instruments and hyperlinksn.a.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Approval requiredApproval is necessary if required by legislation of the other country.
Domestic currency accountsYes.
Convertible into foreign currencyThere is no distinction between resident and nonresident accounts in this regard.
Blocked accountsCertain accounts are blocked by government resolutions in accordance with UN Security Council resolutions.
References to legal instruments and hyperlinksn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measuresThere are no quantitative restrictions or licensing requirements on imports, except for health and national security reasons and as noted below. Certain food products, such as semiprocessed meat products, poultry, and fish, are subject to licensing.
Other nontariff measuresCertain agricultural goods and alcoholic beverages are subject to duties, and certain quantitative restrictions are used to protect Lithuania’s cultural heritage. Alcoholic beverages and tobacco may be imported only by traders registered with the government, but import quantities are unrestricted. There are licensing requirements governing trade in strategic goods and technology and certain oil products.
Import taxes and/or tariffsThe EU Common Customs Tariff applies. A VAT of 18% applies to domestic and imported goods and an excise duty to the following products: ethyl alcohol and alcoholic beverages, manufactured tobacco, energy products, electricity, coal, coke, and lignite.
State import monopolyNo.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesThere are licensing requirements governing trade in strategic goods. There are also licensing requirements governing exports of certain oil products, but without quotas.
Without quotasYes.
With quotasYes.
Export taxesNo.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksn.a.
Controls on capital transactionsYes.
Repatriation requirementsNo.
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investment
Inward direct investmentForeign investments are prohibited in national security and defense, except for investments by foreign entities that meet the criteria for European and transatlantic integration, provided they are approved by the State Defense Council.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsForeign enterprises and individuals are allowed to acquire agricultural and nonagricultural land, subject to provisions in the constitution.
Controls on personal capital transactions
Loans
By residents to nonresidentsLoans granted by legal persons or enterprises to foreign economic entities must be registeredwith the BOL.
To residents from nonresidentsForeign loans without the guarantee of the government of the Republic of Lithuania received by legal persons or enterprises must be registered with the BOL.
References to legal instruments and hyperlinkswww3.lrs.lt/cgi-bin/getfmt?C1=e&C2=21904; www3.lrs.lt/pls/inter2/dokpaieska.showdoc_e?p_id=252663.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Borrowing abroadThese transactions must be registered with the BOL.
Lending to nonresidents (financial or commercial credits)These transactions must be registered with the BOL.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsForeign exchange liabilities are subject to reserve requirements, which must be held in dollars and/or euros in a special account at the BOL. The choice of currency or currencies is left to the bank’s discretion.
Open foreign exchange position limitsBanks’ overall open positions may not exceed 25% of their capital (excluding their euro position), and the open position in individual currencies may not exceed 15% of a bank’s capital (excluding its euro position).
Provisions specific to institutional investors
Insurance companiesThe Insurance Supervisory Commission (ISC) is authorized to supervise insurance activity in Lithuania.
Limits (max.) on investment portfolio held abroadInsurance undertakings may cover technical provisions only by assets localized in Lithuania, an EU member state (this also applies to EEA countries), or an OECD member country. Insurance companies intending to cover technical provisions with assets localized in other countries are required to apply for approval to the ISC indicating their reasons. An ISC approval sets forth the applicable conditions.
Currency-matching regulations on assets/liabilities compositionInsurance technical provision funds must be, with some exceptions, invested in assets expressed in the currency in which the insurance company’s commitments are due, as established in the insurance or reinsurance contracts. If commitments by an insurer are required to be covered with assets expressed in the currency of the EU member state, this requirement is considered satisfied when the assets are expressed in euros.
Pension fundsThe ISC is authorized to supervise pension funds that are managed by life insurance companies. Other pension funds are supervised by the Securities Commission (SC).
Limits (max.) on securities issued by nonresidentsn.a.
Limits (max.) on investment portfolio held abroadn.a.
Limits (min.) on investment portfolio held locallyn.a.
Currency-matching regulations on assets/liabilities compositionn.a.
Investment firms and collective investment fundsThe SC is authorized to supervise investment firms and collective investment funds.
Limits (max.) on securities issued by nonresidentsn.a.
Limits (max.) on investment portfolio held abroadn.a.
Limits (min.) on investment portfolio held locallyn.a.
Currency-matching regulations on assets/liabilities compositionn.a.
References to legal instruments and hyperlinkswww.lb.lt/eng/about/supervision.html; ww.lb.lt/eng/institutions/disclosure1.htm.
Changes during 2006
No significant changes occurred in the exchange and trade system.

    Other Resources Citing This Publication