The war in Ukraine has irrevocably altered the face of Europe, and legislative landscapes are no exception. iLaw Lextal Partner Jolanta Liukaityte-Stoniene, Motieka & Audzevicius Partner Rimantas Daujotas, and Fort Legal Partner Ruta Radzeviciute-Meizeraite focus on the legislative updates in Lithuania.
“The term ‘economic sanctions’ has been removed from the law on sanctions, leaving the term ‘sanctions’ to emphasize the multidimensional nature of the sanctions that were, or are, being imposed,” Daujotas begins. “The institution of a provisional administrator has been established; the possibility to realize assets subject to international sanctions, if they meet certain conditions, was established; a new coordination body for the implementation of sanctions was formed; functions regarding the international implementation of sanctions are now distributed according to competences to the relevant institutions; the requirement to record the imposition of international sanctions in public registers or information systems” was also set up, he says.
As he puts it, the legislative change ensures “a more effective distribution of responsibilities between public authorities in the implementation of economic sanctions,” with the Ministry of Foreign Affairs becoming the single coordinating body. “To ensure that sanctioned assets are not left unmanaged and, taking into account the fact that sanctions can also affect the activities of very large companies in the country, it has become possible to appoint a provisional administrator to protect the country’s economy from the negative economic and social consequences,” Daujotas adds.
Furthermore, he explains that there are “many disputes about the extent of sanctions that are applied and the decisions of the authorities responsible for implementation. It is evident that the sanctioning mechanism is incomplete, with most decisions left to the discretion of the authorities, without a single clear regulatory framework,” Daujotas says. “Certain new risks and uncertainties have arisen for businesses, in particular for those that have had or have business partners in Russia or Belarus, or that operate in the territory of the aforementioned countries,” which could lead to an increase in litigation procedures, Daujotas reports.
And Radzeviciute-Meizeraite says that “businesses have started to make significant efforts for extensive identification of the business partners and their beneficiaries while strengthening their internal control procedures concerning the international sanctions policy. The new requirements have also created a solid ground for even more transparent and ethical business,” she explains. Still, there are drawbacks, she concedes: “the requirement to inspect the beneficiaries of business partners might potentially overburden businesses, i.e., businesses need additional resources to ensure compliance with sanctions requirements.”
“In total, 16 Lithuanian companies are in the sanctioned list with frozen bank accounts, shares, or other property,” Liukaityte-Stoniene adds. “Of course, international sanctions on big companies with many employees in Lithuania raised concerns of possible negative social, economic, and other impacts in Lithuania, but the temporary administrator position helped ease those worries.”
Even with the sanctions negatively affecting the Lithuanian economy, Radzeviciute-Meizeraite reports that all is not bleak. “Despite the negative consequences, we see that businesses have significantly increased their involvement in implementing international sanctions: from self-education on what international sanctions are to wider implementation of internal policies (most local companies did not have such policies at all) aimed at the proper execution of sanctions requirements,” she explains.
Immigration and Jobs
According to Daujotas, citizens of Ukraine and stateless persons who have fled from Ukraine to Lithuania “who do not have a valid travel document may be issued with a foreigner’s registration certificate; war refugees are also not required to present a travel document, health insurance, and other documents that give them the right to enter and stay in Lithuania; refugees from Ukraine now have access to emergency medical care and other essential personal health services.” Additionally, “Ukrainians who have fled the war enjoy simplified conditions for employment in Lithuania,” he says. These amendments aim to allow those fleeing war quicker access to healthcare systems. “They also enable integration into the labor market, by removing some of the usual requirements, e.g., no longer having to obtain a work permit. In addition, Ukrainians are not charged any state fees for all these services,” he explains.
“The Republic of Lithuania has demonstrated that it is fulfilling its international obligations, supporting Ukraine and, at the same time, is capable of hosting large numbers of people fleeing the war. Simultaneously, it is an excellent human rights precedent where regulations are quickly and effectively lifted to protect people who are in a difficult situation,” Daujotas highlights.
“To attract more highly skilled professionals – for example, Lithuania has welcomed some IT companies from Belarus – some of the bureaucratical procedures were lifted,” Radzeviciute-Meizeraite adds. “Foreigners will be able to work under a temporary employment agreement, which was not the case before the amendments. Also, the employers must provide the Migration Department with less information on the qualifications of the prospective foreign employee,” she reports.
“The amendments have improved the process of integration of Ukrainian citizens and other foreigners into the Lithuanian labor market,” Radzeviciute-Meizeraite continues. “According to the data of the Ministry of Social Security and Labour of Lithuania, more than 17,400 Ukrainians have been employed in Lithuania since the start of the war in Ukraine.” However, even with the many upgrades, “this is not enough to solve the shortage of workers,” she says.
“Once the first war refugees started to come to Lithuania from Ukraine, our government started to look for means of easing the way for Ukrainians to start work, get shelter, etc.,” Liukaityte-Stoniene says. “As a result, the legal acts regulating foreigners’ employment procedures were changed, allowing Ukrainians to be employed much easier than other foreigners from outside the EU.” Furthermore, she reports that “compensations for Lithuanians who gave shelter to war refugees in their homes were introduced, to help accommodate all Ukrainians who came to our country.” Additional measures were introduced, like zero VAT for food, medicine, and the like, that is intended “for people who suffered from the invasion. Education system changes were also introduced, thus easing the way for war refugees coming with families or alone to start life in Lithuania,” she notes.
“On June 17, 2022, Lithuania restricted the transit of EU-sanctioned goods by rail to Kaliningrad,” Radzeviciute-Meizeraite reports. “After that, Russia announced a statement claiming the restrictions violated Lithuania’s international obligations” and also threatened “to take various retaliatory measures.”
Subsequently, to ease the “rising conflict between Lithuania and Russia,” Radzeviciute-Meizeraite says that the EU has published guidelines stating that “Lithuania should allow Russian goods to pass [to and from Kaliningrad], if they are transported by rail, are permitted material goods,” and are not used for military purposes. “Quotas were introduced to limit rail transit volumes to those of the last three years,” she reports. Sanctioned goods remain “prohibited from being transferred,” she says.
The dispute “is much more than just a conflict between Lithuania and Russia,” Radzeviciute-Meizeraite explains. “Lithuania’s approach had a direct link to the EU sanction packages. The Kaliningrad transit situation showed how seriously Lithuanians are willing to implement sanctions against Russia, even though EU sanctions negatively impact the country’s economic growth,” she concludes.
Lastly, another decision deserves a mention, according to Daujotas – the Seimas’ Resolution on the recognition of the actions of the Russian Federation in Ukraine as genocide and the establishment of a Special International Criminal Tribunal to investigate the crime of Russian aggression. It establishes Lithuania’s official position that “the Russian Federation is a state sponsor of terrorism,” he says. “The resolution defined Lithuania’s position in the international arena to fully support Ukraine and condemn the actions of the Russian Federation,” he concludes.