In, 2009 several legislative and economical measures have been taken in Lithuania which had considerable negative effects on the functioning of notary system. 

Following the last year’s law amendments, the value added tax (VAT) was increased from 18 percent to 19 percent starting with January 1, 2009. Trying to cope with the consequences of economic crisis, the Government introduced another VAT law amendment, and following parliamentary approval, the VAT was again increased up to 21 percent starting with September 1, 2009. This had a negative effect to the notaries’ income, keeping in mind that according to the regulations by the State Tax Inspectorate, the VAT has to be included into the notary fee, but not added to it. 

According to the statistics available at the Lithuanian Chamber of Notaries, the number of notarised deeds in the first semester of 2009 was 658 thousand. This was 50 percent decrease in comparison to the first semester of 2008, when more than one million deeds were notarized. The average notary income in the first semester of 2009 was 30 percent less than in the same period of 2008, and 50 percent less than in 2007. The notaries’ income degression was largely influenced by the shrinking real estate market. 

According to Ernst&Young Baltics report, commissioned by the Lithuanian Chamber of Notaries, the notarized real estate transactions amount only to 7 percent of all notarised deeds, but bring up to 60 percent of income. 

Legislature initiatives 

Parliamentary approved 

The Lithuanian Parliament (Seimas) had adopted several law amendments paving the way for reducing the role of notaries in registering of legal persons and entities. The move was introduced by the Ministry of Economy as means to improve the business environment in Lithuania and streamline the companies’ establishment process. During the hearings at the Parliamentary Committees on Legal Affairs and Economics the Lithuanian Chamber of Notaries drew the attention to the threat of non-transparency and possibility of legal and financial violations as well as to long-term negative legal consequences that the new order would bring to the process of registering of legal persons. Unfortunately, this notion was dismissed. The adopted amendments will allow the Government to introduce the typical by-laws which could be registered online avoiding the notarial phase. 

Pending parliamentary approval 

The Ministry of Justice has introduced to the Seimas the package of law amendments regarding the mortgage system reform. According to the draft law, as of January 1, 2010 the current practice of double legal inquiry, carried out both hypothec judges and notaries, should be abolished. As part of implementation the “single counter” principle, the notaries would be enabled to register mortgages at the mortgage register by electronic means. As another part of the draft proposals, the notaries replace the function of judges issuing the executive clauses. Also it was proposed to abolish the notarization of movable property pawning. 

The Ministry of Justice has introduced to the Seimas the package of Civil Code and other law amendments regarding civil status registration reform. According to the draft amendments, the notaries will be empowered to confirm the divorces without matters in dispute. The Lithuanian Catholic Church expressed its dissatisfaction upon the draft, asserting that the suggested order would compromise the family policy. 

Pending Government’s approval 

The Ministry of Foreign Affairs currently is the only authority certifying the documents with Apostille. Draft amendment proposes empowering the notaries to certify the documents with Apostille. 

Pending Minister of Justice’s approval 

The Ministry of Justice has prepared and introduced for deliberation the new, outlay-based system of notarial fees. The draft was heavily criticized by the Lithuanian Chamber of Notaries as endangering the whole system of Civil Law Notary in Lithuania and wrongly applying the free market model to the country’s legal system. The Chamber drew the draft to the attention of Seimas’ Committee on Legal Affairs. The MPs have criticized the Minister of Justice and obliged him to co-ordinate the proposal on notarial fees with the Chamber of Notaries. 

Already introduced 

As of July 1, 2009, the Centre of Registers has introduced the Public Electronic Service of the Real Estate Transactions (NETSVEP) at the most of notary offices. Due to faulty design of the NETSVEP system only small part of real estate transactions are being notarized through NETSVEP. Under pressure of Ministry of Justice and Chamber of Notaries, the Centre of Registers and its contractors undertook the effort to improve the electronic system.