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July-August
2008
Estonia, Latvia, Lithuania, Finland, Sweden |
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RoschierRaidla News
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Inside this Issue:
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Estonia |
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Latvia |
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Lithuania |
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Estonia
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Commercial Code Brought in Line with Capital
Requirements Directive |
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On 20 March 2008, the Estonian Parliament (Riigikogu) passed
the Act Amending the Commercial Code and the Council Regulation (EC)
No 2157/2001 on the Statute for a European company (SE)
Implementation Act. The aim of the act is to bring Estonian law into
compliance with the provisions of the current EU capital
requirements directive. The main changes pertain to provisions
regulating the use of securities as items of non-monetary
contribution. Under the new regulation companies may forgo a
mandatory audit of certain items of non-monetary contribution.
Namely, an auditor need not audit the valuation of a non-monetary
contribution of securities if they have been valued on the basis of
their weighted average price, which has been used in trading the
securities on one or several regulated securities markets during the
last three months. The company must meet additional disclosure
requirements in this case, by publishing a relevant notice in the
State Gazette and forwarding it to the commercial register within
one month. The amendments also bring the Commercial Code provisions
applying to the acquisition and transfer of shares and the
acquisition of assets from a shareholder in line with the capital
requirements directive. Provisions concerning prohibited loans are
also amended to make clear that companies are not under any
circumstances allowed to grant or guarantee loans for acquisition of
their own shares or the shares of their parent companies. Further,
the period for which the general meeting may grant permission to
acquire own shares is extended from one year to five years. The
amendments entered into force on 14 April 2008.
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Commercial Code Supplemented and Renewed |
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On 4 June 2008, the Riigikogu passed the Commercial Code,
Non-Profit Associations Act and Associated Acts Amendment Act. The
amendment allows, when a company is founded by electronic means or
via a notary, to pay in capital immediately to the start-up account
of the legal person being founded, doing so either through the
Company Registration Portal of the commercial register or through a
notary. Previously, capital could be paid in only via a court
deposit account or personally in a bank. Under the new procedure the
representatives of a company only have to turn up in a bank when
they wish to dispose of the funds in the start-up account. To do so,
they have to conclude a settlement contract with the bank. To manage
the potential risks that may accompany the simplified procedure of
opening a bank account a provision is added to the Money Laundering
and Terrorist Financing Prevention Act, listing the conditions that
have to be met in order to open a start-up account through the
Company Registration Portal of the commercial register or through a
notary and make a capital contribution to this account. These
conditions are: 1) only the founder may pay share capital to the
account; 2) the account from which the contribution comes must be in
the same bank where the start-up account of the company to be
founded is opened; 3) no funds may be taken from the account until
the company has been entered in the commercial register and a
settlement contract has been concluded in the bank office. As
another innovation, annual reports will have to be submitted
electronically to the court maintaining the register. The new
obligation shall first apply to annual reports prepared for the
period commencing on 1 January 2009. Until then annual reports may
be filed both on paper and electronically. Going electronic speeds
up the disclosure of annual reports. These amendments also make
annual reports of non-profit associations public. All information
concerning the registration of sole proprietors will start to be
kept in the commercial register as a result of the changes. Most of
the amendments shall enter into force on 1 January, 2009. Some will
enter into force on 1 January 2010.
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Other Recent Legislative Developments |
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Recognition of Foreign Professional Qualifications Act
On 19 June 2008, the Riigikogu adopted the Recognition of
Foreign Professional Qualifications Act. The act establishes the
bases, conditions and procedure for recognition of foreign
professional qualifications. The law eliminates obstacles that did
not allow free movement of persons and grants persons who have
acquired a professional qualification abroad the right to work in
regulated professions and pursue regulated professional activities
in Estonia. Recognition of an applicant’s professional qualification
allows the person to work in regulated professions in Estonia. The
scope of the new act is wider than the prior act, allowing temporary
employment in Estonia without having to undergo a procedure for
gaining recognition of foreign professional qualifications. The act
entered into force on 1 July 2008.
Packaging Act Specified
On 24 April 2008, the Riigikogu adopted the Packaging Act and
Packaging Excise Duty Act Amendment Act. The amendments specify the
definition of packaging and the requirements for packaging and bring
Estonian law into compliance with the provisions of EU directives.
Two new terms are introduced: "placing packaged goods on the market"
and "recovery organization". Obligations of packaging undertakings
upon collection and recovery of packaging are specified as well.
Other amendments relate to recovery targets and the tasks of
recovery organizations. The requirements applicable to the density
of packaging collection points, as well as to the obligation to
accept back packages and packaging waste are specified. The scope of
the Package Excise Duty Act is extended, resulting in corresponding
amendments in the conditions of charging packaging excise duty, the
period of taxation, reporting requirements etc. The amendments
entered into force on 31 May 2008 and the new requirements to
collection points of packaging waste will be in force on 1 January
2009.
Land Tax Act Amended
On 12 March 2008, the Riigikogu passed the Land Tax Act
Amendment Act. The provisions relating to charging land tax on
protected areas are amended. According to the amendment land tax
shall not be charged on land where economic activity is forbidden,
on land of strict nature reserves and in special management zones of
protected areas and land of special management zones of species
protection sites. Pursuant to the amendment the reduced land tax
rate will be 50 % of the land tax rate in all cases. Under the
current provisions tax rates varied and had to be established every
time individually by government regulation. The amendments shall
enter into force on 1 January 2009.
Plant Protection Act Supplemented
On 21 May 2008, the Riigikogu adopted the Plant Protection Act
and Associated Acts Amendment Act. The amendments resolve certain
issues that had arisen with respect to the implementation of the
act, and harmonize the act with EU law. The amendments change the
system of compensating costs incurred as a result of the application
of control measures against harmful organisms. Compensation shall be
paid from the state budget and shall include up to 100 % of the cost
of plants and plant products destroyed and income forgone from
destroyed crops. Compensation of these costs to the producer is
aimed at ensuring more effective application of the control measures
provided by the Plant Protection Act. Other amendments include more
detailed provisions regulating the conveyance of goods from third
countries to Estonia and the conditions and procedure for
certification of the conformity of the goods, requirements addressed
to persons using highly toxic plant protection products and for the
use of such products. Other minor changes are made as well. The
amendments entered into force on 1 July 2008.
Land Improvement Act Amended
On 19 March 2008, the Riigikogu adopted the Land Improvement
Act and Associated Acts Amendment Act. The amendment in the Planning
Act introduces the obligation to include land improvement systems in
comprehensive plans. The data to be included in the building permit
and the terminology (land improvement system, drainage system, and
irrigation system) used in the Land Improvement Act are also
specified. Another amendment is aimed at specifying the provisions
concerning land improvement associations: their foundation,
contributions into the association etc. The following new
requirement is introduced: if a land improvement system is located
on land subject to planning, the comprehensive plan and detailed
plan must be approved by the relevant state authority (land
improvement bureau) before the plan can be accepted. The amendments
entered into force on 21 April 2008.
Acts Regulating Safety of Equipment Specified
On 15 May 2008, the Riigikogu passed the Act Amending the
Pressure Equipment Safety Act, Gaseous Fuel Safety Act, Machinery
Safety Act, Lifts and Cableway Installations Safety Act and the
Electrical Safety Act. These amendments eliminate problems that had
emerged in the course of implementing the acts. The amendments
specify the conditions for recognizing in Estonia the competence of
supervisors of the use of the equipment and of persons in charge of
the work, acquired or hired abroad. Undertakings coming from other
EU member states may provide services in regulated fields in Estonia
on a temporary basis without the need to hire a person in charge of
the work from Estonia. Registration in the register of economic
activities, however, is required. The procedure for assessment and
attestation of the conformity of supervisors of the use of the
equipment and of persons in charge of the work is changed as well.
The amendments entered into force on 20 June 2008.
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| For further information please contact
Raino Paron,
Partner at Raidla Lejins &
Norcous in Tallinn. |
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Latvia
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Saeima Removes the Cap of the Social
Insurance Payments |
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On 19 June 2008, the Latvian
Parliament (Saeima) amended
the Law on State Social Insurance,
making a number of important changes
in the regime of social insurance in
Latvia, including temporary removal
of the limitation on the maximum
amount of taxable income subject to
social security payments and changes
in the social security payment
deductions. The amendments as a
whole came into force on 23 July
2008, however, a number of
provisions affecting the tax burden
of the social security payments
obligors will come info effect only
as of 1 January 2009.
The most important amendment to the
Law on State Social Insurance is the
temporary removal of the limitation
of the maximum income subject to
state insurance payments. The
limitation was introduced in 1997
and since then its amount for each
subsequent tax year was determined
by the Cabinet of Ministers. In the
tax year 2008 the maximum amount
of the annual income subject to the
state social insurance payments was LVL 29 600 (approx. EUR 42 000).
Thus, it meant that the annual
taxable income exceeding LVL 29 600
was not subject to social insurance
payments. This allowed reduce the
tax of the medium to high-salaried
employees. According to the new
amendments, the cap on the maximum
amount of income subject to state
social insurance payments will not
be applied in the period from 1
January 2009 until 31 December 2013.
The current rate of social insurance
contributions ranges from 28.02% to
33.09% of the taxable income
depending on the legal status of the
taxpayer. The tax burden is split
between the employee and the
employer so that the employee has to
pay 9% of the social security
payments, while the employer pays the
rest. According to the Law on the
State Social Insurance, the income
subject to social security payments
includes all employment related
income before income tax and any tax
deductions. As such, the social
security payments tax base includes
not only the salary but also the
fringe benefits, work-related travel
costs in excess of the rates
approved by the Cabinet of Ministers
of Latvia, income from personnel
shares, stock-options and other
similar items.
The social security payments are
payable in Latvia both by the
Latvian residents and the foreign
expatriates employed in Latvia,
including the foreign nationals
serving as the members of the Boards
or Directors (Management Boards) or
Supervisory Councils of the
companies registered in Latvia, and
other persons having procuration
rights (registered signature rights)
in companies registered in Latvia,
except if these persons are covered
by the Regulation (EEC) No 1408/71
of the Council of 14 June 1971 on
the application of social security
schemes to employed persons and
their families moving within the
Community and by virtue thereof are
subject to social security regime of
another EU Member State.
Among the other changes made to the
Law on State Social Insurance,
Saeima has doubled the
percentage of the non-taxable
contributions to the licensed
pension funds and accrual life
insurance schemes than can be
deducted from the social security
payments tax base before the tax.
Thus, as of 1 January 2009
contributions made by the employer
for the benefit of employee to
licensed pension plans and insurance
premiums paid by the employer in
respect of an employee to accrual
life insurance schemes will be
deductible from the tax base of the
social security payments subject to
maximum amount of the deduction not
exceeding 20% of the employee’s
gross taxable income in the current
tax year.
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New Anti-money Laundering Law Adopted |
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On 17 July 2008 Saeima passed a new Law On Prevention of Laundering of
Illegally Acquired Funds and Financing of Terrorism (hereinafter – “New Money
Laundering Prevention Law”), implementing the European Parliament and Council’s
Directive 2005/60/EK on the prevention of the use of the financial system for
the purpose of money laundering and terrorist financing and the Commission
Directive 2006/70/EK was adopted laying down implementing measures for Directive
2005/60/EC of the European Parliament and of the Council as regards the
definition of politically exposed person and the technical criteria for
simplified customer due diligence procedures and for exemption on grounds of a
financial activity conducted on an occasional or very limited basis. The new
Money Laundering Prevention Law entered in force on 13 August 2008 and will
substitute the previous Law on Prevention of Laundering of Illegally Acquired
Funds, adopted on 18 December 1997.
As compared to the previous law, the New Money Laundering Prevention Law has
considerably changed the scope of the person which are subject to the law. Thus,
it has included in the scope of the persons subject to the law also the persons
engaged in provision of services of establishment of legal formations and
maintenance of their operations, persons providing cash-collection services,
external accountants, all legal service providers irrespectively of the form of
operation. The New Money Laundering Prevention Law has also made it clear that
not only the persons incorporated in Latvia or operating there via a local
branch, but also all those entities which are providing financial services in
Latvia on a cross-border basis will be subject to the law. At the same time, the
New Money Laundering Prevention Law will not apply to postal service providers
(unless they are engaged in banking or financial services like money
transmission, opening and maintenance of cash accounts, etc.), savings and loan
associations, and, in respect of insurance businesses, the application of the
law has been limited to insurance companies and insurance companies engaged in
the underwriting and distribution of life insurance products only, thus
excluding its application non-life insurance businesses.
The New Money Laundering Prevention Law will continue to apply to electronic
money institutions, although they will be subject to less stringent legal
regulation. The electronic money institutions will be exempt from the customer
due diligence obligations under the New Money Laundering Prevention Law if the
electronic money devices issued by them cannot be recharged and the maximum
amount of money stored in the device is limited to EUR 150 or its equivalent,
or, if the device is rechargeable – if the maximum transaction amount per year
carried out with the device does not exceed the equivalent of EUR 2500. In
addition, while this has not been clearly defined in the law, it is likely that
the electronic money institutions will be allowed not to undertake the customer
identification in respect of one-off issuances of electronic money devices.
Subject to certain exceptions, all entities subject to the New Money Laundering
Prevention Law will have three broad sets of obligations – creation and
maintenance of an internal control system to prevent money laundering and
terrorism financing, including mandatory training of the employees, the customer
identification obligation and the customer due diligence obligation.
According to the New Money Laundering Prevention Law, all credit institutions
and all financial institutions (except for the ones whose activities are limited
to sale and purchase of foreign currencies only) are required to appoint one of
their Board members to be in charge of the money laundering and terrorism
financing prevention matters in the institution. In addition, all legal entities
subject to the law are required to appoint a structural unit or one or more
employees which are authorized to take decisions on the matters concerning the
law and which are directly responsible for the compliance with the law. The
names of these persons have to be notified to the Control Service within 30 days
from the date the legal entity became subject to the law.
As far as client identification is concerned, complete client identification
procedures in accordance with the requirements of the New Money Laundering Law
must be accomplished by 1 July 2009, unless already performed. In cases when
that is not possible, the persons subject to the law must terminate the business
relationship with that customer by 1 July 2009.
A new “risk based approach” is introduced by the Money Laundering Prevention Law
providing that the subjects to the Law shall carry out evaluation of risks of
money laundering and terrorism financing and determine the scope of client
research within the internal control system, based on the mentioned evaluation
(the greater the risk is, the closer attention should be brought to the client).
The new Money Laundering Prevention Law, unlike the previous law “On Prevention
of Laundering of Illegally Acquired Funds”, allows the subjects to the Law to
apply a risk based approach by drawing more attention to clients with a higher
money laundering or terrorism financing risk, but less attention in low risk
cases. The Money Laundering Prevention Law defines the basic requirements for
creation of internal control system, as well as specifies measures for
identification and client research.
In order to ensure fulfillment of obligations of supervision and control
authorities defined by the law, including exploration and registration of
subjects to the Law being under supervision, the State Revenue Service will
supplement the Tax Data System with a new field – features indicating that the
person is under the supervision of the State Revenue Service.
The Cabinet of Ministers regulations approved pursuant to the previous Law on
Prevention of Laundering of Illegally Acquired Funds, adopted on 18 December
1997, including the regulations approving the list of unusual financial
transactions and regulations on reporting procedures, will continue to be
applicable until replaced by new regulations or until 1 January 2009, whichever
is later.
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| For further information please contact
Dace Silava-Tomsone
(CV),
Partner at Raidla Lejins
& Norcous in Riga. |
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Lithuania
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Amendments to the Law on Bankruptcy |
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On 7 June 2008, the Law on Bankruptcy
amended by the Lithuanian Parliament (Seimas)
on 22 May 2008, came into force. The
main purpose of the modifications
adopted was to accelerate the procedures
of a bankruptcy of the companies. It is
also aimed to secure the interests of
the creditors of the companies, i.e. to
carry out the control of the possession
of the assets of the company bankrupted
to the administrator as quickly as
possible in order to restrain unfair
directors or owners of the companies
from the sale or hiding the assets of
the company bankrupted, as well as to
establish higher standards of
responsibility for the persons executing
the procedures of the bankruptcies.
Implicating that, the minimal term of 3
months, which must be passed, in order
for the creditors to apply to a court
with a claim of entering a case of
bankruptcy for an insolvent company, is
eliminated from the law. In addition,
the procedure of bankruptcy cases is
simplified, as the court may convene
only one preliminary sitting of the
case. Moreover, the responsibility for
persons, delaying the investigation of
the case, is tightened. The law
establishes fines reaching LTL 10 000
for such persons. The analogue fines are
provided for the bailiff, who fails to
transfer the receiving orders for the
court, analyzing the bankruptcy case.
Providing to the new regulation of the
law, it is considered that the
administrator got acquainted with the
transactions, concluded before the
bankruptcy of the company, after the
receiving of documents proving the
conclusion of those transactions. The
law also revises the procedure of the
sale of the assets of the company
bankrupted. Moreover, the law
establishes the mandatory insurance of
the liability of administrators in an
amount of at least LTL 200 000. Lastly,
the provisions of the law reconsider the
procedure of payments to the
administrators when the bankrupted
company is insolvent and does not have
enough assets to pay for the
administration services. The law
establishes the obligation for the
Government of the Republic of Lithuania
to define the procedure for such cases.
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Law on the Participation of the Employees
at the Company after the Cross-Border Merger of the Limited
Liability Company Adopted |
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On 17 June 2008, the
Seimas legislated a new
Law on the Participation of
the Employees at the Company
after the Cross-Border
Merger of the Limited
Liability Company which is
in force from 5 July 2008.
This law was adopted
implementing the
requirements of the
Directive of the European
Parliament and the Council
of 26 October 2005 on
Cross-Border Mergers of
Limited Liability Companies.
The aim of the adoption of
the law is to set the legal
frame for the employee
participation at the
companies after cross border
mergers. The law also
establishes the procedure of
the convocation of the
negotiation committee, the
composition of this
committee, the procedure of
the negotiations, the
content of the agreement,
the application terms for
the participation rights,
the procedure of the
appointing employees to the
administrative and
supervisory bodies of the
companies. Lastly, without
the adoption of this law,
the applications of the Law
on Cross Border Mergers of
Limited Liability Companies
would be hardly imagined.
The adoption of this law
stimulated the amendments to
the Administrative Code of
the Republic of Lithuania,
as there was a necessity to
establish the liability for
the violations of the
regulation, established in
the law.
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Rules on the Assurance of Confidentiality
and the Procedure for the Disclosure of Inside Information |
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On 17 July 2008, the
Lithuanian Securities
Commission approved the
Rules on the Assurance of
Confidentiality and the
Procedure for the Disclosure
of Inside Information. Upon
the coming into effect of
the Rules on 1 September
2008, the currently
effective Rules on the
Disclosure of the Material
Events of Issuers shall be
repealed. The approved Rules
have been drawn up having
regard to the Guidelines of
the Committee of European
Securities Regulators of
July 2007 on the application
of Directive 2003/6/EC of
the European Parliament and
of the Council of 28 January
2003 on insider dealing and
market manipulation (market
abuse). The Rules provides
for a definition of inside
information; the model lists
of inside information,
directly or indirectly
related to the issuer or
the financial instruments
issued thereby, provides for
the procedure for the
disclosure of the inside
information; identifies
the persons entitled to
access the inside
information, and the data to
be provided by such persons,
as well as the procedure for
the submission of such
information to the
Securities Commission. With
a view to ensuring the
unanimous interpretation and
the application of the
relevant legal acts and
having considered the
comments and the inquiries
in respect of the draft
Rules on the Assurance of
Confidentiality and the
Procedure for the Disclosure
of Inside Information the
Securities Commission in its
meeting approved the
Guidelines on the
implementation of the Rules
containing exhaustive
explanations of the
principal provisions of the
Rules.
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Amendments and Supplements to the Law on
Audit |
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On 3 July 2008, the
Seimas amended and
supplemented the Law on
Audit. The law will come
into force on 1 September
2008. The modifications were
stimulated by the necessity
to implicate the Directive
2006/43/EC of the European
Parliament and of the
Council of 17 May 2006 on
statutory audits of annual
accounts and consolidated
accounts, amending Council
Directives 78/660/EEC and
83/349/EEC and repealing
Council Directive
84/253/EEC. The law
establishes a new
supervisory institution and
creates a new system of
public supervision, which
must constitute high
standards of the quality of
annual reports audit. The
point of the public
supervisory system is the
institution consisting of
the independent persons,
having enough knowledge on
audit. However, these persons
could not have been members
of the audit institution at
least for previous three
years. The newly adopted law
details the functions and
guidelines of the activity
of the newly established
Audit and Accounting
Service. As there were too
many provisions, regulating
the procedure of practice to
the assistants of the
auditors, the newly approved
law abolishes the regulation
of these matters and
delegates the functions to
set the requirements for the
assistants of auditors to
the Lithuanian Chamber of
Auditors. The amendments to
the Law on Audit also
include special provisions
for the statutory audits of
public interest entities.
Lastly, under the amended
final provisions of the Law
on Audit, while performing
the audit, international
audit standards and
Professional Accountants’
Ethics Code will be applied
from the beginning of
January 2009.
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Amendments and Supplements to the Law on
Annual Accounts and the Law on Consolidated Accounts |
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On 26 June 2008, the
Seimas amended and
supplemented the law on
Annual Reports and the law
on Consolidated Reports. The
amendments were adopted in
order to implement the
provisions of the Directive
2006/46/EC of the European
Parliament and of the
Council of 14 June 2006
amending Council Directives
78/660/EEC on the annual
accounts of certain types of
companies, 83/349/EEC on
consolidated accounts,
86/635/EEC on the annual
accounts and consolidated
accounts of banks and other
financial institutions and
91/674/EEC on the annual
accounts and consolidated
accounts of insurance
undertakings. The amendments
change the provision
concerning the liability for
the preparation of the
annual and consolidated
reports. The amendments also
replace some terms used
before with newer ones.
Moreover, the law specifies
several general principles
applied by the law. Lastly,
the amendments of the law
specify the provisions of
the law concerning the
environmental information,
information about major
events and the means of
insurance, and other
information submitted at the
annual or consolidated
reports. The law also is
supplemented with
provisions concerning the
information, which must be
submitted by the companies
whose securities are traded
at the regulated market.
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Amendments to the Law on Commercial
Arbitrage and the Adoption of the Law on Conciliatory Mediation in
Civil Disputes |
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On 15 July 2008, the
Seimas amended the law
on Commercial Arbitrage and
adopted the law on
Conciliatory Mediation in
Civil Disputes. Both legal
acts came into force on 31
July 2008. The amendments to
the law on Commercial
Arbitrage abolishes Chapter
IX of the law, as now sides
of the conflict, willing to
adjust a conflict without
the intervene of the court
or an arbitrage, may use the
procedure of conciliatory
mediation in civil disputes.
The legal frame of this
procedure is created
adopting the law on
Conciliatory Mediation in
Civil Disputes. In order to
stimulate the development of
mediation and not to damage
the effectiveness of
mediation procedures, the
law is created under the
tender method of legal
regulation. The procedures
of mediation are not
regulated in details, though
the questions concerning
the popularity, quality and
effectiveness of mediation
are solved in respect with
the effective legislation.
Moreover, the law defines
the terms of mediation,
determines the scope and
guarantees of
confidentiality principle,
and establishes mediation
as one of the official
manners to solve the
disputes. Lastly, the law
includes the regulation of
the most important questions
of mediation concerning the
placement of arbiters, the
qualification of the
arbiters and liability. It
needs to be mentioned that
the legal regulation of
mediation is limited by
implicating major terms and
conditions, established at
and admitted by the theory
of modern mediation.
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further information please contact
Irmantas Norkus, (CV),
Managing Partner at
Raidla Lejins & Norcous in Vilnius. |
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Finland
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Shareholders’ Rights Directive
and Implementation in Finland |
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Directive 2007/36/EC of the European Parliament and of the Council on the
exercise of certain rights of shareholders in listed companies shall be
implemented by the EU Member States by 3 August 2009. Minimum standards are set
out in the directive to ensure rights of shareholders of companies which have
their registered office in an EU Member State and whose shares are admitted to
trading on a regulated market situated or operating within a Member State.
The directive focuses on participation in general meetings and includes detailed
regulation on e.g. a minimum notice period; the content of the convocation;
shareholders’ right to timely access of relevant information; abolition of
obstacles to electronic participation and participation by proxy; abolition of
share blocking; shareholders’ right to ask questions, receive answers and to put
items on the agenda as well as disclosure of voting results. The directive
strives to ensure participation and voting in general meetings particularly when
the shareholder cannot attend the meeting in person, especially in cross-border
situations where the shareholder is located in another Member State.
Measures for the implementation of the directive have already been initiated in
Finland by assessing amendments required to be made into the Finnish
legislation. The conclusion is that the minimum requirements set out in the
directive seem to be broadly included in the current Finnish legislation. The
implementation of the directive will, however, require some amendments to the
existing legislation, mainly in the Companies Act.
Even if there is no need to make major amendments to the Finnish legislation,
there are several interesting details in the directive that are under
discussion. Examples of such details are proxy voting, voting by correspondence
and the number of proxy holders one shareholder may appoint.
In Finland the practice regarding proxies issued by nominee registered
shareholders has developed so that it is not necessary to present a proxy in
writing through the chain of intermediaries, but a proxy in writing including
certain representations issued by the nominee account holder is regarded
sufficient. The directive is somewhat ambiguous in this respect and it could be
interpreted to require that a written proxy from the beneficial owner would have
to be presented at a general meeting. However, this interpretation would in
practice make it more difficult for foreign shareholders to vote at the general
meetings of Finnish companies and would therefore be both counterproductive and
against the purpose of the directive.
As regards voting by correspondence endorsed in the directive, a question to be
addressed is how votes casted by mail shall be taken into account if the general
meeting amends the original proposal by the board. If the original proposal is
amended, the votes casted by mail have been casted for or against a proposal
that has ceased to exist.
In addition, the directive stipulates that a Member State may not limit the
number of proxy holders appointed by a shareholder if the shareholder holds
shares of a company in several securities accounts. Currently a shareholder may
appoint only one proxy holder and split voting is not considered to be allowed.
The implementation of the directive will thus require amendments as to the
number of proxy holders that may be appointed. Allowing of split voting has also
been discussed as the possibility to appoint several proxy holders makes it
difficult to monitor how votes are casted.
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For further information please contact
Dimitrios Himonas
(CV),
Partner at Roschier in Helsinki. |
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Sweden
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New Swedish
Competition Act |
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On 1 November
2008, a new
Swedish
Competition Act
(the “Act”) will
enter into
force. The Act
aims to make the
procedures
thereunder more
efficient and to
further
harmonize
Swedish
competition
rules with EC
competition
rules. Below
follows a survey
of the most
important
changes
introduced by
the Act.
Merger
Control
Notification
thresholds. The
Act introduces
new notification
thresholds that
solely relate to
turnover
achieved in
Sweden.
Concentrations
will have to be
notified to the
Swedish
Competition
Authority (the “SCA”)
under the Act if
in the previous
financial year
the parties’
combined annual
turnover in
Sweden exceeded
SEK 1 billion
(approx. EUR 108
million); and
each of at least
two of the
parties’ annual
turnover in
Sweden exceeded
SEK 200 million
(approx. EUR 22
million). If
particular
reasons exist,
the SCA may also
order a party to
a concentration
that meets the
first threshold
but not the
second threshold
to submit a
notification.
The Act
explicitly
provides that a
concentration
shall be
notified to the
SCA before any
measures to
implement it are
taken. As of
January 2008,
the SCA has been
accepting
notifications
based on a “good
faith” intention
to conclude an
agreement. The
Act codifies
this practice.
Substantive
test. The Act
replaces the
current
“dominance test”
with the
“SIEC-test” that
corresponds to
the substantive
test under the
current EC
merger
regulation.
Hence, under the
new substantive
test a
concentration
shall be
prohibited if
the
concentration
significantly
impedes
effective
competition or
the development
of effective
competition in
Sweden or a
substantial part
thereof, in
particular due
to the creation
or strengthening
of a dominant
position. This
test is
generally
referred to as
the “SIEC-test”.
Ancillary
restraints. The
Act removes the
possibility to
request the SCA
to assess
restrictions
that are
directly related
and necessary to
the
concentration,
i.e. ancillary
restraints. The
parties
themselves have
to assess
whether their
restrictions are
permissible or
not according to
the competition
law.
Review period.
In line with the
EC rules, the
SCA may in cases
where
commitments are
submitted extend
the initial
(phase I) review
period from 25
to 35 working
days.
Procedure
Several changes
have been made
in the Act in
order to promote
efficient
application of
the competition
rules and faster
handling of
competition
cases.
Leave to appeal.
In order to
shorten the
total handling
time of
competition
cases, leave to
appeal to the
Market Court
(i.e. the last
resort) will be
required when
appealing
judgments and
decisions issued
by the Stockholm
District Court.
Settlement
procedure. The
Act allows the
SCA to issue
fines in
uncontested
cases concerning
agreements and
other collusive
behavior between
undertakings
that restrict
competition, and
in cases
concerning abuse
of dominant
position. Thus
the Act
introduces a
settlement
procedure in
infringement
cases if the
undertaking
accepts the
fines.
Settlements will
generally be
allowed in all
kinds of cases
where the
factual
circumstances
are clear.
Limitation
periods. The
limitation
periods for
issuing fines
for
infringements of
the competition
law are
increased. A
fine may only be
issued if an
undertaking has
been served with
an application
for summons
within five
years from the
day on which the
infringement
ceased. However,
if the
undertaking
receives a
decision
regarding an
inspection of
its premises or
gets the
opportunity to
comment on the
SCA’s draft of
an application
for summons, the
limitation
period starts
from that day.
The absolute
limitation
period will be
ten years.
Fines and
sanctions
The rules for
setting fines
are clarified in
the Act in order
to facilitate
classification
of
infringements.
This will allow
concerned
parties and the
court to easier
identify
infringements
that are
particularly
harmful to
competition and
thus mandate
higher fines.
Fines. Fines
under the Act
may not exceed
10% of the total
turnover in the
previous
financial year
of the
undertaking
participating in
the
infringement.
The previous
specific amount
ranges are thus
removed. It
should be noted
that the fines
only relate to
the infringing
undertaking and
not the whole
group which the
undertaking
belongs to.
Ban on carrying
on business. The
Act introduces a
completely new
sanction, a ban
on carrying on
business for
infringements
relating to
horizontal price
fixing, market
sharing and
limiting or
controlling
production. The
ban may be
issued upon one
or several
persons that
control an
undertaking,
such as a
managing
director or a
board member. A
ban to carry on
business may be
issued for a
time of three to
ten years.
Leniency. The
Act clarifies
the rules on
leniency and
explicitly
provides that
leniency may
only be granted
in cases
regarding
infringements
that involve
agreements and
other collusive
behavior between
undertakings
that restrict
competition. In
comparison to
the current
system, under
which more than
one undertaking
could
theoretically
get full
immunity from
fines, the new
system only
allows one
undertaking to
get full
immunity.
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| For further information please contact
Axel Calissendorff
(CV),
Partner at Roschier
in Stockholm. |
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| This Newsletter is a
periodic publication of RoschierRaidla and
should not be construed as legal advice or legal opinion on any specific
facts or circumstances. We have used reasonable efforts in collecting,
preparing and providing the information in this newsletter, but we do
not warrant or guarantee the accuracy, completeness, adequacy or
currency of the information contained herein. The contents are for
general informational purposes only, and you are urged to consult a
lawyer concerning your situation and any specific legal questions you
might have. |
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