On 30 May 2006 the Government of the Republic of Lithuania presented the Parliament of the Republic of Lithuania with the draft Law on Amending and Supplementing Articles 4, 7, 9, 10, 11, 13, 16, 17, 19, 20, 21 and 22 of the Law of the Republic of Lithuania on Privatisation of State-owned and

      Municipal Property (hereinafter referred to as the "Draft Law") for consideration.

      The draft law is aimed at harmonising the provisions of the Law of the Republic of Lithuania on Privatisation of Stateowned and Municipal Property with the Civil Code and other laws and regulations of the Republic of Lithuania, to increase the transparency and efficiency of privatisation of stateowned

      and municipal property. The Draft Law proposes to amend paragraph 1 of Article 16 of the Law and to include

      important provisions regarding the public tender performance process. First of all, the Draft Law proposes to impose a duty on the State Property Fund to place an offer to improve their tender offers with all potential buyers the tender offers of which differ from the best tender offer by no more than 15 percent. It is also proposed to entitle the Government to fix the time limit within which potential buyers should submit their improved tender offers.

      In the Draft Law it is also suggested to refuse a provision establishing a possibility for potential buyers to submit tender offers of initiative character.

      The effective provisions of the Law establish that state-owned or municipal buildings or premises into which, with the lessor's consent, private capital of the value in excess of 1/2 of the market value of the leased buildings or premises was invested can be privatised by way of direct bargaining or hire purchase. The Draft Law proposes that in cases where the investment has been already compensated for or the portion of the investment not yet compensated for does not exceed ½ of the market value of the buildings or premises or pursuant

      to the law the investment is not subject to compensation, such buildings or premises should be privatised not by way of direct bargaining or hire purchase but by way of a public auction. Only buildings or premises the value of noncompensated private capital invested into which is over ½ of the value of such leased buildings or premises and the parcels of land allotted to them, could be privatised by way of direct bargaining or hire purchase.

      Also, taking into account provisions of the Civil Code, it is suggested to amend the procedure of payment for an object under privatisation. Lithuanian and foreign entities will pay for objects of privatisation to be acquired by them in cash in the currency specified in the privatisation program which is deemed to be a legal means of payment according to the effective laws and regulations of the Republic of Lithuania or the state in which the payment is to be effected.

      The Draft Law proposes that the time limit for final settlement of accounts for an object under privatisation is to be fixed by the manager of the property. The time limit cannot be longer than the maximum set in the Law. This amendment is aimed at preventing conflicts between privatisation authorities and managers of objects under privatisation.