Negotiation chapter "Freedom to Provide Services"
The chapter of the EU legislation "Freedom to Provide
Services" consists of two sub-chapters: financial services (banking,
insurance, securities and investment services) and non-financial services (data
protection, commercial agents, information society services, freedom of
establishment and freedom to provide services for craftsmen, traders and farmers).
With respect to this chapter, during the negotiations Lithuania has requested
and agreed upon the following transition periods:
1. Full harmonization of the Lithuanian deposit insurance
system with the requirements of Directive 94/19/EC on deposit-guarantee
systems – by 31 December 2007.
2. Implementation of the provisions of Directive 97/9/EC
on investor-compensation schemes – by 31 December 2007.
The main provisions of the sub-chapter "Banking"
The acquis of this sub-chapter consists of the EU
directives regulating the taking up and pursuit of the business of credit
institutions that define the minimum requirements and general standards applied
to credit institutions in order to implement the following main principles of
the development of domestic market: harmonization of the terms of issuing
authorizations and prudential standards, control of the home country and the
mutual recognition of supervision . Most provisions of the directives of the EU
legislation chapter "Freedom to Provide Services" regulating the
taking up and pursuit of the business of and prudential requirements to credit
institutions have already been implemented in the legislative system of
Lithuania. It is planned to implement all requirements of these directives
applied to banks before joining the EU. .
However, along with commercial banks, credit unions also
operate in Lithuania. In the negotiating position Lithuania requested a
derogation to include credit unions in the list of institutions to which banking
directives are not applied. The request is based on the fact that, taking into
account the small share of credit unions in the credit institution market (according
to the data of 1 January 2003, the assets of credit unions comprised LTL 70.1
million, i.e., 0,41 per cent of all assets of the banking system) as well as
special requirements for the credit union membership and a specific nature of
their activity, there is no need for credit unions to fulfill all requirements
of the directives regulating the activities of credit institutions.
With the aim of promoting further development of credit
unions and ensuring the credibility of the credit union system, at the end of
2002 the Central Credit Union began operating . The Central Credit Union is a
credit institution organized on a co-operative basis, established by credit
unions and the Government of the Republic of Lithuania, functioning as a co-operative
society. During the negotiations an agreement was reached that, taking into
account the capabilities of the members of the Central Credit Union to
accumulate the minimum capital, Lithuania shall prescribe the minimum initial
capital requirement for the Central Credit Union amounting to EUR 1 million,
provided for in Article 5(2) of Directive 2000/12/EC. The derogation regarding
the application of the requirements of the directives regulating the activity of
credit institutions will not be applied to the Central Credit Union.
