2014-04-17
The Seimas approved the Law on the Adoption of the Euro in the Republic of Lithuania
On 17 April 2014, the Seimas, in a plenary session, approved the Law on the Adoption of the Euro in the Republic of Lithuania (project No XIIP-1450(2), which provides the guidelines for the preparations to adopt the euro, exchange of litas to euro, conversion of values denominated in litas to values denominated in euro and the withdrawal of litas from circulation. 87 members or the Seimas voted in favour of the legislation, 7 — against and 13 members of parliament abstained.
According to the approved document, the Bank of Lithuania will exchange litas banknotes and litas coins and cents to euro free-of-charge for an unlimited time and without limiting the amounts. On the day of euro adoption, all of the money held in customer accounts will converted to euro free of charge. Commercial banks, at all branches, will exchange litas to euro free-of-charge, in unlimited amounts, for 6 months after the euro adoption date. Later, litas banknotes will be exchanged free-of-charge for another 6 months, but only at certain bank branches, which will be identified ahead of time by the Bank of Lithuania. In accordance to the approved legislation, it was decided to provide banks with the right to establish the requirement that any client who wants to convert more than LTL 15,000 at a time is required to inform the bank ahead of time.
Since the services provided by the Lithuania Post are widely used by the Lithuanian public, particularly those not living in the large cities, it is expected that the Lithuania Post will also be obligated to exchange litas to euro free-of-charge for two months after the euro adoption date, but they will be provided with the opportunity to define the maximum sum of litas that can be converted into litas at a time. This obligation has also been laid down for credit unions.
The law established the general mathematical rounding rule when rounding is to the smaller number if the digit after the decimal point is less than 5 and to the larger number if the digit is 5 or larger. It also aims to protect the interests of employees by recalculating wages to euro — after conversion, if the third digit after the decimal point is greater than 0, the revalued wages in euro will increase by one euro cent. The same rounding principle will be applied for the beneficiaries’ benefit in the conversion of pensions and other social security benefits.
The legislation regulates the denomination of prices and other amounts in euro and litas. Dual pricing will be announced within 30 calendar days after the date the EU Council’s irrevocably fixed euro exchange rate and 6 months after the adoption of the euro. "Based on the practice of other countries, it is expected that the dual pricing will reduce the risk of unjustified price increases. Also, buyers will quickly get used to future payments in euro, even if before the introduction of the euro they will have the opportunity to know the prices of products (services) in this currency, while the listing of prices in litas even after the adoption of the euro will enable buyers to compare whether there is a difference between prices for the same product (service) prior to the introduction of the euro and after the euro adoption day", stated the explanatory notes.
For violation of this Law, individuals will be given a warning; for legal entities or persons authorised by them — a warning or a fine of up to LTL 1,000. For repeated violation of this Law, individuals will be fined up to LTL 5,000; for legal entities or persons authorised by them — a fine from LTL 1,000 to LTL 10,000.
This law shall enter into force on the day of the abrogation of the derogation of the Republic of Lithuania by the Council of the European Union under Article 140(2) of the Treaty on the Functioning of the European Union. As established in this Treaty, on proposal from the European Commission, after consulting with the European Parliament and discussions with the European Council, the EU Economic and Financial Affairs Council will decide whether the country has met the mandatory conditions for the euro adoption.
The Seimas, taking into account the fact that having adopted the Draft Law on the adoption of the European Union’s single currency — the euro — there has been a rise in concern in society for the welfare of the population, it was decided to adopt a protocol decision and authorise the Government, until 1 May 2014, to submit the documents necessary for the Seimas’ Draft Law on pension compensation, as well as to decide on the minimum monthly wages increase until the European Union’s single currency is adopted.