Declaration on the First Year of Business

In autumn 2011, the vast majority of business supervisory institutions signed the Declaration on the First Year of Business.  By means of this document, the institutions obligated themselves to offer advice and assistance to companies during their first year of operations, with the aim of helping abide by acts of law rather than rushing to hand down fines.

In implementing the declaration and in seeking to spread the word among the business community as widely as possible, it is recommended that business supervisory institutions inform the public about their ratification of this declaration on their web sites.  Institution leaders are also encouraged to organize meetings and seminars with regional division leaders regarding proper implementation of the declaration.

It is recommended that, prior to starting inspections of new businesses, business supervisory institutions present them with the declaration and an informational sheet containing contact details that business owners can use for questions related to the institution’s field of supervision.  In this way, it is hoped that businesses in their first year of operations will have an opportunity to become familiar with their rights.

In the declaration, which was initiated by the Ministry of Economy and Innovations, the institutions obligate themselves to refrain from issuing fines or limiting the operations of any business that is beginning operations.  Upon the determination of a violation, a deadline for compliance will be set, with an extension possible if circumstances warrant.

Fines and operations limitations will be applied only in exceptional cases, as a last resort, after assessing whether compliance with acts of law can be ensured by other means.  The declaration has been signed in seeking to improve the business environment, encourage job creation and retention, and decrease the administrative burden on businesses and residents.

 

The full text of the declaration can be found below:

DECLARATION on the first year of business, 14 September 2011, Vilnius

We, the undersigned business supervisory institutions (hereinafter referred to as supervisory institutions), represented by the supervisory institution heads, in seeking to increase the state’s competitiveness, improve the business environment and business supervision functions, encourage job creation and retention, and decrease the administrative burden on businesses and residents, having determined that businesses starting operations need methodological assistance and consultation and that supervisory institutions are competent to provide such assistance, in seeking to help new businesses operate successfully in a competitive environment, noting that the most important supervisory task is ensuring adherence to acts of law and that fines and other sanctions are only one means toward this end, rather than an end in itself, recognizing that fines are not the most suitable means to apply to new businesses, especially small ones,

obligate ourselves:

  • to refrain from applying punitive measures (fines, restrictions on activity, and so forth) during the first year of a business (no less than twelve months from the moment when the business—natural person, legal entity, or other organisation or a subsidiary of a legal entity or other organisation undertaking legally regulated economic activity within the territory of the Republic of Lithuania—or its activity came under the supervision of a supervisory institution) and, upon identifying a violation, to first determine an appropriate deadline for correcting the violation, a deadline which can be extended in the event of objective circumstances;

  • to devote resources for consultation and providing methodological assistance to businesses during their first year of operations (for example, contacting a new business and offering consultations services, preparing consultative seminars, answering businesses’ inquiries and requests, etc.).

    Appreciating that acts of law grant supervisory institutions the right to apply punitive measures and without restricting the discretion of supervisory institutions to apply them through this declaration, we jointly obligate ourselves to apply punitive measures to businesses during their first year of operations only in exceptional cases, as a last resort, after first evaluating whether adherence to acts of law cannot be ensured by other means (for example, by issuing an order or by consulting), and only when they are necessary and unavoidable in seeking to prevent harm to society, the interests of other persons, or the environment when such harm or danger is of great significance.

     

Last updated: 09-09-2020