IN THE BALTICS

FOREIGN INVESTMENT TO INDUCE MEDIA CONCENTRATION IN THE BALTICS

Media concentration and globalisation are phenomena gaining strength in North American and West European countries. Currently, it is gaining momentum in East European countries.

Lithuania, Estonia and Latvia are no exceptions in this respect. The collapse of the Soviet Union brought about the privatisation of state-party owned press, which, in turn, gave an impetus to active processes of media de-concentration. Furthermore, new newspaper and magazine offices were set up; the first private radio and shortly afterwards TV stations appeared.

The above mentioned de-concentration processes in Lithuania, Estonia and Latvia were followed by radically different processes - those of media concentration and globalisation.

Out of the three Baltic countries, it was in Estonia that Scandinavian mass media companies managed to secure their position within the shortest time possible.

The peculiar demographic situation of Latvia greatly influenced the structure of the country's media. There 44 percent of the population are Russian-speaking, which in turn caused the division of Latvia's media into two sectors - Latvian and Russian. Consequently, this sector of the Latvian media is devoid of any transparency. Russia's capital is actively involved in Latvia's media market, which is a distinct peculiarity of the country.

All daily press in Estonia is concentrated in the hands of two media magnates, whose market shares are more or less equal.

The Norwegian media company "Schibsted" has 54 percent of dailies subscribers, whereas the remaining 46 percent are taken by the Swedish concern "Bonnier Group".

In 1998, even prior to foreign investment stepping into Estonia, its press market was dominated by two major companies, which published the most influential newspapers and journals in the country. One company, uniting 14 newspapers and journals, was initiated by the most popular Estonian daily "Postimees", and the other was set up by the most popular weekly "Eesti Ekspress", the amalgamation of 13 publications.

"Postimees" was the first private national daily within the disintegrating Soviet Union to have been privatised by Heldur Tonisson, a Swiss of Estonian descent. Some time later, the Norwegian information company "Schibsted ASA", which had run the second channel of Estonian television, became a co-owner of the daily.

Within as short a time as one week, "Postimees'" competitors from "Eesti Group" were acquired by "Bonnier Group", the largest Scandinavian press company from Sweden that had already established business dailies in all Baltic countries. "Bonnier Group" was also the owner of the largest Latvian daily "Diena".

After the ownership of Estonia's national dailies was passed to Scandinavian investors, more than a single war was launched with regard to press prices. In an attempt to oust competitors from the market, newspapers were sold at a mere trifle. Such a dumping of prices is sufficient proof that Estonia's media market is reasonably dynamic and not yet finally shaped.

Latvia's four biggest national dailies are also controlled by only two financial groups - Swedish media company "Bonnier Group" and Latvian oil company "Ventspils Nafta".

"Bonnier Group" manages the biggest daily in Latvia - "Diena" (40-60 thousand copies), whereas "Ventspils Nafta" controls the dailies "Rigas Bals" (25-45 thousand copies), "Nietkriga rita avize" (30 thousand copies) and "Jauna avize" (20 thousand copies).

The leading Russian daily in Latvia is a radical pro-Moscow daily "Panorama Latvii" with a circulation of 30 thousand. Though the Latvian society at large has no information who real owners of this daily are, there is no doubt that the funding sources for the publication of the daily can be traced back to Russia.

There are no specific rules or laws regulating the processes of media concentration in the Baltics - be it Lithuania, Estonia or Latvia. However, such a situation should not be regarded as an exception. On the contrary, it is common practice prevailing in many European countries. A media market is a sufficiently lively system not only in the post-Soviet countries of Eastern Europe, but also in Western countries, abounding in deep-rooted traditions of democracy and freedom of press. It is therefore not surprising that different countries are known to have adopted different rules of media concentration. The absence of such rules whatsoever is not surprising too. The same applies to such processes of media globalisation, when media concerns of economically more advanced countries have gained access to the markets of other countries, including Lithuania, Estonia and Latvia.

LITHUANIA

LITHUANIAN MASS MEDIA LAW IS UNDER THREAT

More than once, the Law on the Provision of Information to the Public of the Republic of Lithuania has been exposed to revision. It is only due to the efforts and resistance of the media society, first and foremost of journalists and publishers, that such projects have never been implemented. Nonetheless, the determination of those advocating the revision of the said law has not been undermined.

A year ago, a special Commission was set up at the Seimas, its function was to amend the existing legislation. The proposed amendments would allegedly enable to control whether and to what extent mass media comply with the provisions of the Constitution and the legislation, protecting society from publications, cinema and video films of violent and pornographic nature. Shortly afterwards, the Chairman of the Commission (Mr. A. Raskinis, a Christian Democrat) had the draft Law on the Amendments to the Law on the Provision of Information to the Public registered. The aim advocated was to promote moral and spiritual values of children and youth. However, the proposed amendments made the journalists and the general public alert and vigilant.

The said Commission proposes to amend the Law on the Provision of Information by introducing 35 provisions. Furthermore, it suggests that two more public authorities should be set up - the State Safety Commission for the Provision of Information to the Public and the State Safety Inspectorate for the Provision of Information to the Public. Both institutions shall be empowered with high level of authority - the resolutions by the institutions shall be binding to all enterprises, offices, organizations and mass media. Non-observance of or failure to comply with the said regulations shall invoke the set liability.

The above mentioned institutions shall also be responsible for monitoring mass media in respect of the laws, which protect personal health, honour, dignity, privacy and morals, of the Constitution, and of the provisions prohibiting national, racial and religious enmity, violence, discrimination, slander, etc.

All those functions, which are about to be handed to the new Safety Commission and Inspectorate, have so far been vested in the courts of the Republic of Lithuania, the Ethics Commission of Publishers and Journalists, and the Inspector of Journalist Ethics.

Due to the fact that the presentation of violence and erotica in mass media is sufficiently regulated by the already existing legal acts, the society at large, professionals and journalists think that there was hardly any need to draft new legislation to impose further restrictions on violence and eroticism in mass media. However, the debate on the drafts aimed at amending the Law on the Provision of Information to the Public has already been initiated.

The proposed amendments are submitted for your attention.

DOCUMENT

REPUBLIC OF LITHUANIA
Law on Amendments to Chapter 4 and Articles 151 and 152 of the Law on the Provision of Information to the Public

Chapter 4. Basic Principles of the Provision of Information to the Public

1. While pursuing their activities, producers and disseminators of public information shall be governed by the Constitution and laws of the Republic of Lithuania, shall adhere to the principles of humanity, equality, tolerance, respect for an individual, shall respect the freedom of speech, creativity and conscience, and diversity of opinions, observe the norms of journalists' professional ethics, help promote democracy, openness of society, encourage public civic awareness and state progress, strengthen independence and nurture the national culture and morality.

2. Public information must be presented correctly, accurately and without bias. It must not harm the physical, mental and moral development of children.

3. A public information producer, disseminator, the owner thereof, or journalist shall not be prosecuted for published information, however, for the violations of this law they shall be liable according to the procedure established by the laws. The exertion of influence on the public information producer, disseminator, the owner thereof or journalist, forcing them to reflect events and facts falsely, shall be prohibited. Support for a public information producer, disseminator, the owner thereof and journalist may be provided only pursuant to the Law on Charity and Sponsorship as well as other laws of the Republic of Lithuania.

4. Relations between a public information producer, disseminator and the owner thereof shall be regulated by this and other laws, normative acts and agreements between the parties.

5. Producers, disseminators and journalists shall use journalistic, scientific, literary and other works as provided in the laws of the Republic of Lithuania.

Article 151. The Safety Commission for the Provision of Information to the Public

1. The Safety Commission for the Provision of Information to the Public shall be the institution accountable to the Seimas of the Republic of Lithuania. The Commission shall monitor, analyze and assess the implementation of principles of providing information to the public set forth in this Law. It shall act as an official expert to the Seimas, the President, the Government and Courts on issues of statutory supervision of the provision of information to the public and protection of personal information.

2. The Safety Commission for the Provision of Information to the Public shall be a legal entity and pursue its activities according to regulations approved by the Seimas. The procedure of the Commission's operations shall be defined by work regulations, approved by the Commission.

3. The Safety Commission for the Provision of Information to the Public shall perform the following functions:

monitor, analyse and assess how the goals and principles of providing information to the public set forth in the Law on the Provision of Information to the Public and other legislative acts are being complied with when providing information to the public. The Commission shall submit proposals to the President, the Seimas, the Government and other state institutions concerning improvements in the implementation thereof;

set criteria, according to which press publications, cinema and video films, radio and television programmes, as well as other types of public information can be classified as erotic, violent, pornographic or other legally prohibited or restricted public information;

by co-operating with the Ethics Commission of Publishers and Journalists, define the classification and marking system, as well as the procedure of distributing press publications, cinema and video films, radio and television programmes and other public information, classified as erotic or violent, and other restricted public information;

submit proposals on drafting or improving the Laws regulating the provision of information to the public and other legal acts;

co-ordinate the activities of the Safety Inspectorate for the Provision of Information to the Public;

initiate surveys on topical issues of the provision of information to the public and scientific research to determine the impact of public information on personal development;

initiate state programmes for the provision of information to the public and projects aimed at purposeful personal development;

implement state safety programmes on the provision of information to the public and programmes for personal development; manage and utilise allocations from the state budget and other funds appropriated for the implementation of these programmes;

co-operate with other organisations, which deal with the problems of interaction between personality and public information (human rights organisations and organisations of the rights of the child, children, youth, pedagogical and educational organisations, Ministry of Education and Science, departments of education in county administrations and municipalities) on issues of children and youth protection.

4. The Safety Commission for the Provision of Information to the Public shall consist of 11 members. The Commission members shall be appointed by competent authorities (public institutions and non-governmental organisations), whereby outstanding persons, professionals and active members of non-governmental organisations shall be selected in order to implement the main goals and objectives of the Commission.

5. The Commission members shall be appointed as follows:

The President shall appoint 1 member;

The Chairman of the Seimas shall appoint 2 members upon the recommendation of the Seimas Committee on Education, Science and Culture. One appointee shall represent the field of culture, and the other shall be an expert in pedagogical issues or children and youth mental health;

The Government shall appoint 2 members. One member of the Commission shall represent the Lithuanian Bar Association or a research or educational institute of law, and the other shall be a representative of a Lithuanian educational or pedagogical institution or organisation;

The Lithuanian division of UNICEF, the Lithuanian Family Centre, the Lithuanian Academy of Catholic Science and the Citizen's Charter shall appoint one member each in order to safeguard children's rights and to nurture family, Christian and civic values;

The Lithuanian State Language Commission shall appoint one member;

The Lithuanian Radio and Television Commission shall appoint one expert on the provision of information to the public.

6. The competent authority shall notify the public of its intended appointees. Interested individuals and non-governmental institutions may submit proposals to the competent authority concerning the candidate members of the Commission. The competent authority shall select a member (members) from the list of potential candidates on the basis of his/her/their suitability to reach the goals and objectives set by the Commission.

7. The term of office for a member of the Commission shall be 4 years. The institution which has appointed its member may recall him/her prior to the expiration of the term of office by its own reasonable decision taking into account a reasonable proposal by the Commission (on the ground of the violation of the Commission's regulations as well as the violation of legal or ethical norms) or by satisfying the respective request by the member himself/herself. Information about the membership of the Commission and its changes shall be published in Valstybes Zinios. A new member shall be appointed instead of the recalled member for a period ending at the term of office of the former member.

8. The Chairman of the Commission shall be appointed from among the members of the Safety Commission for the Provision of Information to the Public for his/her term of office by the Prime Minister upon the recommendation of the Commission.

9. The Safety Commission for the Provision of Information to the Public shall be funded from the State Budget. The tasks and instructions of the Commission and its Chairman shall be exercised by the Commission Secretariat. The list of the Secretariat staff positions and their remuneration, not exceeding the upper limit of salaries set by the Government, shall be established by the Commission. The Safety Inspectorate for the Provision of Information to the Public shall operate within the Safety Commission for the Provision of Information to the Public as provided in the Regulations approved by the Safety Commission for the Provision of Information to the Public.

10. Resolutions of the Safety Commission for the Provision of Information to the Public, within the scope of its competence, shall be obligatory to all enterprises, institutions, organisations, and mass media, as well as to individuals. Non-compliance with the said resolutions shall invoke liability in the manner prescribed by the Law.

11. The Commission shall report to the Seimas at least once a year, and the Commission members shall report to those who appointed them..

Article 152. The Safety Inspectorate for the Provision of Information to the Public

1. The Safety Inspectorate for the Provision of Information to the Public shall perform the following functions:

monitor whether the disseminated public information does not violate law provisions intended at protecting an individual's health, honour and dignity, private life and morals and at safeguarding the constitutional order;

monitor whether the disseminated public information does not violate law provisions prohibiting criminal activity, such as incitement of national, racial, religious or social discord or enmity, hatred, violence and discrimination, slander and false information;

monitor how public information producers and disseminators comply with the requirements established by the laws and other legal acts in classifying press publications, cinema and video films, radio and television programmes as public information of pornographic, erotic or violent content and the procedure of dissemination thereof;

analyse individuals' complaints concerning false information and information degrading their honour and dignity published in the mass media according to the procedure established by the Safety Commission for the Provision of Information to the Public;

apply sanctions on public information producers, disseminators and other persons for violations in the area of providing public information in the cases provided for in the laws and pursuant to the procedure established by laws; perform supervisory functions assigned to it by this and other Laws, Government resolutions and resolutions of the Safety Commission for the Provision of Information to the Public.

2. The activities of the Safety Inspectorate for the Provision of Information to the Public shall be funded from the State Budget.

3. The Safety Inspectorate for the Provision of Information to the Public shall be headed by the Head of the Inspectorate appointed upon the decision of the Safety Commission for the Provision of Information to the Public.

4. Resolutions of the Safety Inspectorate for the Provision of Information to the Public concerning fines and other sanctions may be appealed against in court.

PARLIAMENT TO INTRODUCE UNLIMITED FINES

The Seimas of the Republic of Lithuania has approved the Amendments to the Law on the Provision of Information to the Public, whereby the fine margin of LTL 10000, imposed for degrading personal honour and dignity, shall be lifted. Should the Seimas vote and the President sign the above mentioned amendments, the country's media will face hard times. Unlimited fines can be imposed provided the court rules a newspaper, or a TV or radio station guilty.

The legislators also propose to revise the Law on the Bar and to lift the prohibition to reach an agreement on the earnings of a lawyer to be directly related to the outcome of a case. The Association of Lithuanian Radio and Television and the Association of Periodical Press Publishers are of the opinion that, should such amendments be adopted, they would create a possibility for anybody to make a claim against a publication, a radio or TV programme, not quite to his/her liking, and take no risk; to initiate litigation on every single phrase and make claims for fines amounting to millions of litas; and once a favourable court ruling has been reached, share the damages awarded with the lawyer, and quite possibly not just him.

Furthermore, the legislators propose to amend the provision set out in the Law on the Provision of Information to the Public to the effect that honour and dignity are attributable to people, and certainly not to enterprises and organisations. Provided this provision is repealed, many evils and wrongs shown by mass media, such as abuse, swindle, corruption, disorder, red-tape, neglect of consumers' interests, etc. would most often be found as degrading honour and dignity. Consequently, endless litigation in court would ensue.

The Association of Lithuanian Radio and Television and the Association of Periodical Press Publishers are for the following provision: in the case where the public information producer has published information that bears no correspondence to the truth and belittles the person's honour and dignity, it shall compensate for the moral damage inflicted upon the person, but the compensation for moral damage shall not exceed LTL 10.000, unless the person about whom false information degrading his/her honour and dignity was published proves that this has been done intentionally. In the latter case, this amount may be increased upon the court ruling, but not more than twofold. The Associations' recommendations also suggest no amendments to the provision of the Law on the Provision of Information to the Public stipulating that economic entities have no honour or dignity, and may have goodwill and prestige instead. Members of the said Associations believe that the size of the compensation for moral damage caused by false information should be established by the court on the grounds of the losses incurred by the economic entity because of the false information.

Lithuanian journalists have never contested their responsibility for what they say to the public. The Law on the Provision of Information to the Public, which has been in effect since 1996, as well as other legislative documents stipulate liability for providing false information and for belittling a person's honour and dignity. Moreover, much emphasis has been lately put on improving the mechanism of self-regulation of the press. For that to be possible, the Code of Ethics of Journalists and Publishers has been adopted, the Ethics Commission of Journalists and Publishers has been active, the position of the Inspector of Ethics has been created. Nonetheless, the above enumerated circumstances have not reduced politicians' ambitions to regulate journalists' activities. Time will show whether the current Law on the Provision of Information to the Public will survive.

ADVERTISING AND MEDIA

NEW LAW ON ADVERTISING WILL RESTRICT FINANCIAL INDEPENDENCE OF THE MASS MEDIA

The new Republic of Lithuania Draft Law on Advertising has enjoyed equal attention and criticism. Quite a few actors on the advertising market expressed their doubt as to the necessity of this Law. In their opinion, such a Law would violate the traditional principles of self-regulation, employed by advertising entities. Moreover, the latter claim that the Law on Advertising, drafted by the Ministry of Economy of the Republic of Lithuania, can be hardly harmonised with the provisions of European Union legislation. Sharper criticism is sometimes heard regarding the Draft Law on Advertising when it is seen as an attempt to impose restrictions on the provision of information. Kestutis Makaitis, President of the Lithuanian Branch of the International Advertising Association and its Board member, shareholder of Baltijos Televizija, firmly believes that no restrictions can be imposed on an individual's freedom of choice. Likewise, nobody has the right to impose restrictions on the freedom of advertising. The above mentioned Law on Advertising does not comply with the effective Law on the Provision of Information to the Public and the new Draft Amendments to the Law on the Provision of Information to the Public.

We present the most important extracts from the Draft Law on Advertising below.

DOCUMENT

LAW ON ADVERTISING

CHAPTER 1

GENERAL PROVISIONS

Article 1. Purpose and application of the Law

1. This Law is aimed at improvement of consumer's information about goods and services, protection of their interests and protection of freedom of fair competition.

2. This Law shall govern relations of legal and natural persons, as well as enterprises without rights of legal persons, arising from usage of advertisements in all markets of goods (including real estate) and services of the Republic of Lithuania, establish requirements set for advertising, liability of subjects of advertising activity, as well as

legal grounds for control of usage of advertisement in the Republic of Lithuania.

3. If other laws of the Republic of Lithuania set forth additional requirements or prohibitions for usage of advertisement, the provisions of such laws shall be applied.

4. If ratified international agreements of the Republic of Lithuania prescribe other requirements for usage of advertisement, the provisions of such agreements shall be applied.

5. This Law shall not govern usage of political and social advertisement, as well as announcements of natural persons, which are not related to commercial-economic, financial and professional activity.

CHAPTER 2

ADVERTISING PRINCIPLES AND GENERAL REQUIREMENTS

Article 3. Advertising principles

Any advertisement shall conform to the following principles:

1) advertisement should be decent and fair;

2) advertisement should be clearly recognisable;

3) advertisement should not foster behaviour, which might endanger health of people, their safety and surroundings;

4) advertisement must not abuse people's confidence, lack of their experience.

Article 4. Decency of Advertising

In an advertisement it shall be prohibited to:

1) violate principles of public morals;

2) discriminate any race, nationality, sex;

3) encourage compulsion, aggression, raise panic;

4) humiliate person's honour and dignity, his/her religious or political beliefs;

5) without consent of a natural person mention his/her name, surname, submit his/her opinion, information about his/her private or public life, property, use image in video, film or photo material.

Article 5. Misleading Advertising

1. It shall be prohibited to use misleading advertisement:

2. When recognising an advertisement as misleading it shall be deemed that:

1) information announced in an advertisement is wrong if an advertisement giver may not prove accuracy of such information during its announcement. Sufficiency of evidence proving accuracy of information depends on circumstances of each case. Certificates and recommendations of persons whose professional experience and competence are not related to the announced information shall not be acknowledged as proof of accuracy of information;

2) information announced in an advertisement is incomplete if a certain part of information the announcement of which, in consideration of another information announced in this advertisement, is necessarily obligatory in order to avoid misleading of advertisement users, is missing;

3) way and form of submission of an advertisement is not proper if advertisement users may conceive an implied misleading statement incorporated in an advertisement;

4) advertisement users make opinion about accuracy, fullness (omission of information) of the announced information, as well as way or form of presentation of advertisement, and adopt such decisions which may be expected from an ordinary advertisement user under such circumstances.

Article 6. Advertising for Children

It shall be prohibited in an advertisement to:

1) discredit authority of parents, guardians or teachers, raise disbelief in them;

2) invite children directly to make influence on parents or other persons in order they bought the advertised goods (services);

3) form the opinion of children that usage of certain goods (services) will grant them physical, psychological or social superiority before their peers;

4) show children in situations, which threaten their health or life.

Article 7. Recognizability of Advertising

1. An advertisement should be clearly recognised according to form of its presentation. If there is any possibility that advertisement users cannot recognise the advertisement announced in mass media because of form of its presentation, such advertisement must be marked by the word "advertisement".

2. An advertisement in television or radio programs may not be presented using technologies, which affect sub-consciousness.

3. Latent advertisement shall be prohibited.

Article 8. Comparative Advertising

1. Only such comparative advertisement shall be permitted in which goods or services of a competitor are compared and it meets all the following conditions:

1) it is not misleading;

2) it contains comparison of goods or services which satisfy the same needs or are meant for the same purposes;

3) it contains objective comparison of one ore more essential, verifiable and peculiar characteristics of goods or services, as well as possible comparison of price;

4) it causes no intricacy in the market between an advertisement giver and a competitor, as well as goods and services of an advertisement giver and a competitor, their trade marks, firm names, other marks;

5) it does not discredit or slander the competitor's goods, services, his trade marks, firm name, other marks, activity, his legal, financial or another status;

6) goods with the origin mark are compared only with goods having the same origin mark;

7) no attempt is made to use unfairly the competitor's trade mark, firm name, goodwill of origin of goods or other marks;

8) fail to present imitations or copies of goods or services, which have protection of trade mark or firm name.

2. If a specific proposal is made in comparative advertisement, an expiration date of validity of the proposal should be explicitly stated, and, if necessary, it should be specified that such proposal is subject to the amount of goods held or possibilities of rendering of services. If during announcement of such advertisement the proposal has not come into effect yet, it is necessary to specify its enforcement date.

Article 9. Advertising of activity and goods (services) prohibited by law

The following advertisement shall be prohibited:

1) of activity prohibited by law;

2) of goods (services), the production, sale (supply) of which is prohibited by law.

CHAPTER 3

REQUIREMENTS FOR MEANS OF ADVERTISEMENT PRESENTATION

Article 10. Advertising in TV programs

1. Advertising in TV programs must be broadcast only in commercials or TV shop windows. Commercials and TV shop windows should be clearly separated from other parts of the program by optical or acoustic means and marked.

2. In telecasts consisting of independent parts, as well as during broadcasts of cultural and sports events, an advertisement may be inserted only between these parts or in intervals (pauses). In other programs commercials must be separated from each other by the interval of no less than 20 minutes.

3. While broadcasting feature and television films (except serial films, serials and documentaries), the duration of which is longer than 45 minutes, an advertisement may be inserted once per 45 minutes. An advertisement may be inserted additionally if the duration of a film exceeds two or more 45-minutes-period.

4. An advertisement may not interrupt broadcasting of church service. An advertisement may not be inserted in information programs, programs of religious contents, children's programs, as well as documentary films if the duration of such programs is less than 30 minutes.

5. The total duration of commercials, including separately submitted TV shop announcements, may not exceed 20 percent of the total time of day program and may not exceed 12 minutes per one astronomic hour. Commercials in which TV shop announcements are not submitted, may not exceed more than 15 percent of the total time of the day. Limitations on time of advertisement determined in this part shall not be applied to TV shop window and to information of the television station (broadcaster) about its programs, including extracts from programs, announcements of public institutions and charity announcements broadcast free of charge.

6. During the whole day program time no more than 8 TV shop windows may be broadcast, and their total duration may not exceed more then 3 hours.

7. In supported programs it shall be prohibited to propose to sell, buy or lease goods of supporters or another person, use services rendered by them.

8. Requirements of this Article shall not be applied to programs in which only advertisement is broadcast.

CHAPTER 5

ADVERTISING CONTROL

Article 17. Advertising control institutions

1. Enforcement of prohibitions and requirements set by this Law for usage of an advertisement shall be controlled by the state institution authorised by the Government which is obligated to perform supervision of the Law of the Republic of Lithuania on Consumer Rights Protection (hereinafter, Consumer Rights Protection Institution), Competition Council of the Republic of Lithuania and municipal executive institutions.

2. The Competition Council of the Republic of Lithuania shall control misleading advertisement, municipal executive institutions - usage of external advertisement, and the Consumer Rights Protection Institution - enforcement of other prohibitions and the requirements set by this Law.

3. Control of advertisement shall be performed in accordance with this Law and other laws of the Republic of Lithuania.

4. Organisations representing subjects of advertising activity shall be entitled to voluntarily regulate and control advertisement used by its members, setting forth rules in line with valid legal acts.

Article 18. Powers of the Consumer Rights Protection Institution while performing advertisement control

The Consumer Rights Protection Institution, while performing the advertisement control, shall be entitled to:

1) obtain from state government and municipal executive institutions, other legal and natural persons the information and documents necessary for investigation of violation of the Law on Advertising;

2) obtain from subjects of advertising activity the information and documents, and in case of necessity samples of advertised goods as well, necessary for investigation of violation of the Law on Advertising;

3) require that managers of subjects of advertising activity and other persons in charge of usage of an advertisement come and submit oral or written explanations;

4) obligate subjects of advertising activity to terminate usage of an advertisement, which is not in line with requirements set by this Law;

5) impose monetary penalties in cases prescribed by laws.

2. It shall be prohibited for the Consumer Rights Protection Institution and its employees to disclose the commercial secret entrusted in them by subjects of advertising activity.

Article 19. Powers of the Competition Council of the Republic of Lithuania while performing control of misleading advertisement

1. Rights and duties of the Competition Council of the Republic of Lithuania while performing the control of misleading advertisement, procedure for investigation and examination of cases regarding usage of misleading advertisement shall be determined by this Law and the Competition Law of the Republic of Lithuania.

2. The Competition Council of the Republic of Lithuania, apart from the rights established in the Competition Law of the Republic of Lithuania, shall also be entitled:

1) to recognise a misleading advertisement as such;

2) in order to avoid essential and irreparable harm on interests of economic entities or public interests, temporarily, until final decision of the Competition Council of the Republic of Lithuania to prohibit announcement of an advertisement if there are enough data that the announced or to be announced advertisement may be recognised as misleading.

3) to obligate to terminate usage of misleading advertisement;

4) to obligate guilty persons to deny misleading advertisement and set the procedure for its denial;

5) to impose monetary penalties in cases established by this Law and the Competition Law of the Republic of Lithuania.

CHAPTER 6

PROCEDURE FOR APPLICATION OF LIABILITY FOR VIOLATIONS OF THE LAW ON ADVERTISING

Article 20. Liability for violations of the Law on Advertising

1.Subjects of advertising activity and their managers or other persons responsible for usage of advertisement, in case of violation of requirements of the Law on Advertising shall be liable in the procedure prescribed by this Law and other laws.

2. Responsibility for advertisement on an imported commodity, its package as well as on the label and description of a commodity, and other documents accompanying a commodity, shall lie with the importer of such commodity.

Article 21. Peculiarities of liability for usage of misleading advertisement

1. An advertisement giver shall be liable for usage of misleading advertisement if he does not prove that the Law on Advertising has been violated through no fault of his.

2. An advertisement producer or disseminator shall be liable for usage of misleading advertisement only in case that he knew or should have known that the used misleading advertisement or misleading occurred due to his actions when producing or announcing an advertisement, or an advertisement producer or disseminator may not submit evidence allowing to identify an advertisement giver (producer).

Article 22. Violations of the Law on Advertising and monetary penalties imposed for them

1. Usage of misleading information shall incur on subjects of advertising activity the penalty in the amount from one thousand Litas to fifty thousand Litas.

2. Usage of misleading advertisement after obligation of the Competition Council of the Republic of Lithuania to terminate its usage shall incur on subjects of advertising activity the penalty in the amount from ten thousand Litas to one hundred thousand Litas.

3. Failure to observe temporary prohibition of the Competition Council of the Republic of Lithuania to announce advertisement or non-fulfilment or improper fulfilment of obligation to deny misleading advertisement shall incur on subjects of advertising activity the penalty in the amount of twenty thousand Litas.

4. Non-fulfilment or delayed fulfilment of the requirement of the Consumer Rights Protection Institution to submit information and documents, and in case of necessity samples of advertised goods as well, necessary for investigation of violation of the Law on Advertising shall incur on subjects of advertising activity the penalty of ten thousand Litas.

5. Usage of advertisement prohibited in Article 9 of this Law shall incur on subjects of advertising activity the penalty of ten thousand Litas.

6. Non-observance of requirements for usage of advertisement set forth in Article 6, parts 2 and 3 of Article 7, Articles 10, 11, 13, 14, 15 and 16, after obligation to terminate usage of an advertisement which fails to meet the requirements of the Law shall incur on subjects of advertising activity the penalty of twenty thousand Litas.

7. Monetary penalties for violations of the Law stipulated in part 6 of this Article shall be imposed only in cases that violation of the same Article of the Law on Advertising is made within three years after the date of adoption of the resolution obligating to terminate usage of an advertisement which fails to meet the requirements of the Law.

8. The amount of the monetary penalty provided in parts 1 and 2 of this Article shall be subject to nature of violation of the Law, circumstances alleviating and aggravating liability.

9. Circumstances alleviating liability shall be deemed the situation when the subject of advertising activity voluntarily terminated usage of misleading advertisement and announced denial of such misleading advertisement. The Competition Council of the Republic of Lithuania, when solving the question regarding the amount of penalty may also acknowledge other circumstances as alleviating.

10. Circumstances aggravating liability shall be deemed the situation when advertisement users or other persons suffered loss or if after punishment for usage of misleading advertisement such misleading advertisement was repeatedly used within one year.

11. Monetary penalty may be imposed not later than within one year from the last day of announcement of the advertisement.

Article 23. Procedure for consideration of violations of the Law on Advertising

1. Violations stipulated in parts 1, 2 and 3 of Article 22 of this Law shall be examined and considered by the Competition Council of the Republic of Lithuania. Procedure for examination and consideration of violations and procedure for enforcement of and appealing against decisions of the Competition Council of the Republic of Lithuania shall be determined by the Law on Competition of the Republic of Lithuania.

2. Violations provided in parts 4, 5 and 6 of Article 22 of this Law shall be considered by the Consumer Rights Protection Institution in the procedure prescribed by this Article.

3. The right to consider violations of the Law on Advertising on behalf of the Consumer Rights Protection Institution and to impose monetary penalties shall be vested in the head of the institution or his deputies.

4. Authorised officials of the Consumer Rights Protection Institution in the event of violation of the Law on Advertising shall execute the protocol which shall, not later than within 3 days, be filed with the head of the institution or his deputy.

5. The head of the Consumer Rights Protection Institution or his deputy shall examine the violation within no more than 30 days from the day of receipt of the protocol or another material necessary for consideration of the violation. Examination of the violation may be attended by a representative of the violator who shall have the right to get acquainted with the collected material, submit explanations, file applications. Failure by the representative to attend, if he has been notified about place and time of examination of violation, shall not impede examination of violation.

6. After examination of violation of the Law on Advertising by the Consumer Rights Protection Institution, a resolution shall be adopted specifying the name of the institution which adopted the resolution, date and place of examination of violation, data about the violator, circumstances of violation, the article of the Law on Advertising stipulating liability for violation of the Law, decision taken.

Article 24. Recovery of monetary penalties

1. The monetary penalty imposed by the Consumer Rights Protection Institution shall be paid to the state budget no later than within one month from the day when the violator of this Law received the decision on imposition of the penalty.

2. The non-paid monetary penalty shall be recovered in the procedure prescribed by the Code of Civil Procedure of the Republic of Lithuania.

Article 25. Appealing against decisions of the Consumer Rights Protection Institution

1. Subjects of advertising activity may, within one month from the day of receipt of the decision of the Consumer Rights Protection Institution which prohibited to use an advertisement or imposed a monetary penalty, apply to court for cancellation or amendment of the decision.

2. Application to court shall not suspend enforcement of the decision unless the court establishes otherwise. The court may suspend enforcement of the decision of the Consumer Rights Protection Institution if it calls in doubt the lawfulness and validity of the decision taken.

Article 26. Protection of rights and compensation of loss

1. Legal and natural persons as well as enterprises without rights of legal entities, the lawful interests of which are violated while using an advertisement prohibited by this Law, shall be entitled to apply in the procedure prescribed by laws to court with the suit regarding:

1) interruption of usage of an advertisement;

2) compensation of property and moral (non-property) loss incurred. The amount of moral (non-property) loss expressed in money shall be determined by court taking into consideration the guilt of the person who caused loss, his property status and other circumstances significant to the case.

3) obligation to make one or several statements of specific contents and form, which deny the misleading advertisement. If the court decision obligating to deny the misleading information is not enforced, the court by its ruling may recover from the defendant the penalty for each day of delay to enforce the court decision. The amount of the penalty shall be imposed by court and shall be recovered for the benefit of the plaintiff.

4) confiscation and destruction of goods or other means directly related to usage of misleading advertisement unless the violation may be eliminated otherwise.

2. The rights mentioned in items 1 and 3 of part one of this Article shall also be vested in organisations representing interests of economic entities or consumers.

3. The loss of subjects of advertising activity incurred due to unlawful decisions of advertising activity control institutions, in violation of requirements of this Law, shall be compensated in the procedure prescribed by laws.

TELEVISION

LITHUANIAN NATIONAL RADIO AND TELEVISION FAVOURS CLOSER TIES WITH THE GOVERNMENT

The Lithuanian National Radio and Television is in a state of crisis: no restructuring has taken place, nothing has been done for the more effective utilisation of budget allocations - as a result, its rating down, the most qualified and best employees leaving. This is the reality that the Lithuanian National Radio and Television has to face.

Under the circumstances, the Council and the Management of the Lithuanian National Radio and Television have found the only possible solution - the introduction of a subscription fee. Please find below some Amendments to the Law on the Provision of Information to the Public, which, in the opinion of the Conservative Party - the Seimas majority party, should mitigate the situation and help the Lithuanian National Radio and Television (LNRTV) find a way out of the financial crisis.

The Draft Law on the Amendments to Article 29 of the Law on the Provision of Information to the Public, pertaining to the funding of the Lithuanian National Radio and Television (the amendment under consideration should help deal with the financial problems of the LNRTV and secure steady and stable funding of the LNRTV - edit.)

The Lithuanian National Radio and Television shall be funded by:

State Budget allocations, which shall amount to at least 0.6 percent of the annual State Budget expenditure;

commercial advertising, the duration of which on a radio or television channel shall not exceed 10 per cent of the daily transmission time and shall not exceed 12 per cent of the time in a radio or television programme per hour;

income earned from publishing activities and sales of the radio or television programmes and broadcasts created by the National Radio and Television;

sponsorship and charitable contributions.

Funds for the maintenance of radio and television transmitters and connecting lines for the transmission of the Lithuanian Radio and Television programmes shall be allocated directly from the State Budget to the Radio and Television Centre.

The Draft Law on the Amendments to Article 29 of the Law on the Provision of Information to the Public specifying the composition of the Council of the Lithuanian National Radio and Television (this amendment abolishes the independence of the Council of the Lithuanian National Radio and Television of the Seimas and the President. The currently effective Law on the Provision of Information provides for the nomination of Council members by non-governmental organizations, while the approval stays with the Seimas. The Seimas does not have the authority to turn down a nominated candidate - ed.)

The Supreme Governing Body of the Lithuanian National Radio and Television shall be the Council of the Lithuanian National Radio and Television. It shall consist of 15 (fifteen) members for the term of office in the respective institutions which appointed them. The formation of the Council of the Lithuanian National Radio and Television shall be the responsibility of the Seimas Committee on Education, Science and Culture. 5 (five) members of the Council shall be appointed by the President of the Republic of Lithuania upon the recommendation of non-governmental organisations, 10 (ten) Council members shall be appointed by the Seimas in proportion to the Seimas majority and minority, upon the declaration of Seimas fraction members and Seimas members not belonging to any fraction about their affiliation to the majority or minority of the Seimas. The representatives of non-governmental organisations appointed to the Council of the Lithuanian National Radio and Television by the Seimas majority and minority shall be approved by the Seimas upon the vote for the whole list submitted by the Seimas Committee on Education, Science and Culture. The Council shall elect the Chairman of the Council from among its members by a simple majority vote. Should a Council member resign or be recalled by the institution which appointed him/her, the mandate of such a Council member shall terminate.

The Council shall approve the scope and structure of the Lithuanian National Radio and Television programmes; shall monitor the compliance of the Lithuanian National Radio and Television programmes with the requirements for public broadcasters stipulated in Lithuanian national legal acts and international legislation; shall appoint, by way of public tender, the General Director of the Lithuanian National Radio and Television for the term of four years, and shall dismiss him/her; shall appoint and dismiss his/her deputies upon the General Director's recommendation; shall approve the structure of the Lithuanian National Radio and Television and the estimate of planned costs and expenditure for the coming year.

VIEWPOINT

What follows below is the conclusion by the experts on EU legal matters about the conformity of the Draft Law on the Amendments to Article 29 of the Law on the Provision of Information to the Public to EU legislation.

Having analysed the Draft Law on the Amendments to Article 29 of the Law on the Provision of Information to the Public, we note that the provisions of the Draft do not contradict the requirements set forth in Council Directive 89/552/EEC regulating the activities of television broadcasters and the provisions of Council Directive 97/36/EC replacing the above mentioned Directive. Besides, the said Directives do not deal with the funding and managing of a national radio and television. Since Article 29.2.2 sets the maximum permissible time for commercial advertising on the Lithuanian National Radio and Television, we have to point out that Article 18(1) of Directive 97/36/EC stipulates that the total amount of time available for advertisement, teleshopping and other forms of advertising on a television channel shall not exceed 20 per cent of its daily transmission time. The duration of advertising alone shall not exceed 15 per cent of the daily transmission time. Article 29.2 provides that advertising and teleshopping within a one-hour transmission period shall not exceed 20 per cent of transmission time. The duration of advertising was proposed by the Seimas Education, Science and Culture Committee when the Committee submitted its version of the Draft Law on the Amendments to Article 29 of the Law on the Provision of Information to the Public No P-1953. In addition to that, the version of 6 October 1999 of Article 10.1 of the Draft Law on the Amendments to the Law on Advertising No D8-08-6735 submitted by the Ministry of Economy runs "The total duration of advertising intervals, teleshopping spots included, shall not exceed 20 per cent of the total daily programme time and shall not exceed 15 minutes per hour". For the reasons stated above we suggest that the provisions of the Drafts should be co-ordinated and the same time duration for advertising should be set.

LATVIA

LATVIAN NATIONAL TELEVISION CONSIDERS THE INTRODUCTION OF SUBSCRIPTION FEE

The Latvian State Television experiences difficulties too. The Latvian Television reduced its broadcast production by 30 per cent and its staff by 200 at the beginning of the year. Previously the Latvian State Television employed 1000 people. Now the annual allocation from the State Budget is 3.9 million lats (about 26 million litas). Advertising earns 1.5 million lats. The management of the Latvian Television claims that its normal functioning requires 9 million lats. Therefore Latvia as well as Lithuania is discussing the introduction of a subscription fee. A Latvian family might have to pay about 1.6 lats per month (approx. 12 litas).

The Latvian television market may be affected by the way the financial problems of the Latvian State Television are resolved. The results of the negotiations between the owners of Television Company LNT and Swedish Concern "Titings AB Marieberg" concerning the potential sales of the block of shares may also impact the market. Television channel TV Riga is looking for a strategic investor.