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Published: 11/14/2017. Updated: 4/3/2020

Regulations of the National Energy Regulatory Council


Approved
by Government Resolution No 1747 of 7 November 2002
(1 July 2019 Recast)

CHAPTER I

GENERAL PROVISIONS

1. National Energy Regulatory Council (hereinafter referred to as the Council) shall be an independent state institution that regulates the activities of entities operating in the fields of energy, drinking water supply and wastewater management and performs state supervision and control of energy industry.
2. The Council shall act in accordance with the Constitution of the Republic of Lithuania, international agreements of the Republic of Lithuania, the European Union legislation, Law on Energy of the Republic of Lithuania, Law on Electricity of the Republic of Lithuania, Law on Natural Gas of the Republic of Lithuania, Law on the Liquefied Natural Gas Terminal of  the Republic of Lithuania, Law on Heat Sector of the Republic of Lithuania, Law on Renewable Energy of the Republic of Lithuania, Law on Energy Resources Market of the Republic of Lithuania, Law on Drinking Water Supply and Waste Water Management of the Republic of Lithuania, Law on Energy Efficiency of the Republic of Lithuania, Law on Construction of the Republic of Lithuania, Law on Consumer Protection of the Republic of Lithuania, Law on Cash Social Assistance for Low-Income Families (Single Residents) of the Republic of Lithuania, Law on State Stocks of Petroleum Products and Oil of the Republic of Lithuania, the Republic of Lithuania Law on the Integration of the Energy System into the European Energy Systems, the Railway Transport Code of the Republic of Lithuania, the Inland Waterways Transport Code of the Republic of Lithuania, Law on Budgetary Institutions of the Republic of Lithuania, Law on Public Administration of the Republic of Lithuania, other laws and legal acts adopted by the Seimas of the Republic of Lithuania, Presidential Decrees of the Republic of Lithuania, Resolutions of the Government of the Republic of Lithuania, the Regulations of the National Energy Regulatory Council (hereinafter
referred to as the Regulations) and other legal acts regulating the activities of the Council, energy and drinking water supply and/or waste water management, surface waste water management. The Council, in exercising its regulatory, supervisory and control functions in the field of energy, also comply with all the legally binding decisions of the Agency for the Cooperation of Energy Regulators (ACER) acting under the Regulation of the European Parliament and the Council (EC) No 713/2009 (OJ 2009 L 211, p. 1) of 13 July 2009 establishing an Agency for the Cooperation of Energy Regulators and the European Commission, and shall implement such decisions.
3. The Council is a budgetary institution accountable to the Seimas, financed under the terms and conditions established by the Law on Energy and the Law on Drinking Water Supply and Waste Water Management.
4. The Council is a limited civil liability public legal entity with its own bank account, a seal with the Coat of Arms of the Republic of Lithuania and the name of the institution.
5. The Council shall be owned by the State. The rights and duties of the owner of the Council shall be exercised by the Government.
6. Public announcements of the Council shall be published on the website of the Council (www.vert.lt ) and, in cases established by laws and other legal acts – in the other media.

CHAPTER II

OPERATIONAL OBJECTIVES AND FUNCTIONS OF THE COUNCIL

7. Operational objectives of the Council– within its competence to perform state regulatory functions in the sectors of heat, natural gas, oil, centrally supplied liquefied petroleum gas, electricity, renewable energy and drinking water supply and waste water management, to ensure the supervision and control of the operation of the regulated heat, natural gas, centrally supplied liquefied petroleum gas, electricity, renewable energy and drinking water and waste water management activities, and the proper implementation of the rights and duties of energy and drinking water and waste water management undertakings and consumers' freedom of fair competition in the sectors of energy, drinking water and waste water management, as well as to perform the state control of energy objects and facilities throughout the territory of the Republic of Lithuania, irrespective of their form of ownership management.
8. The Council shall carry out the following functions in pursuit of the operational objectives specified in Article 7 of the Regulations:
8.1. approve methodologies for state regulated pricing;
8.2. approve the requirements and/or method and/or model of the regulatory accounting system, oblige energy and drinking water supply and/or wastewater management, surface wastewater management undertakings to carry out the verification of the regulatory activity reports and the re-verification of those reports;
8.3. approve the technical tasks, according to which verification of regulatory activity reports and/or the regulatory accounting system is carried-on;
8.4. set state regulated prices and price and/or revenue caps;
8.5. when setting state regulated prices, assesses the cost of the services provided considering a return on investment corresponding to the criterion of reasonableness;
8.6. control the application of state or municipal regulated prices and tariffs;
8.7. unilaterally set state and municipal regulated prices, if energy, drinking water supply and/or waste water management undertakings fail to comply with these requirements for pricing;
8.8. coordinate the prices of drinking water and waste water services provided by drinking water suppliers and waste water managers, and supervise their application;
8.9. coordinate the highest tariffs for ferrying passengers and vehicles by ferries across the Curonian Lagoon (Klaipėda State Seaport Area) to/from the Curonian Spit and passenger transportation by local rail routes;
8.10. approve the tariffs for the connection of energy objects (networks, systems, equipment) to the objects (networks, systems, equipment) of the operating energy undertakings, their pricing methodology, in which also are established the conditions for the calculation of tariffs in accordance with the general pricing criteria established by the laws governing the legal bases of individual energy sectors;
8.11. issue licenses and permits for energy activities, drinking water supply and/or waste water management, energy sources exchange operator, change them, suspend the validity of licenses and permits, cancel the suspension of the validity, revoke the validity of licenses and permits, supervise and control the licensed activities of energy, drinking water supply and/or waste water management undertakings, as well as information on permits and licenses, which is non-confidential publishes on the website of the Council;
8.12. issue certificates for the installation and operation of energy facilities, suspend their validity, cancel the suspension of validity, revoke the validity of the certificates, change the certificates;
8.13. control the installation and operation of energy facilities and supervise the compliance with legal requirements;
8.14. submit conclusions to authorised state institutions regarding the issuance of certificates for design and installation of   exceptional engineering structures (energy-related equipment);
8.15. maintain a register of certificates issued by the Council for the installation and operation of energy-related equipment;
8.16. submit proposals to the Government, the Ministry of Energy and municipalities regarding the licensed activities of energy undertakings;
8.17. establish the requirements of reliability and service quality in energy transmission and control the compliance with them;
8.18. control the compliance with the established energy and energy sources quality requirements;
8.19. establish technological, financial and managerial capacities of electricity, drinking water supply and waste water management undertakings and the procedure for their assessment;
8.20. establish the methodology for calculating the connection fee for new subscribers, except consumers, for connecting to the public drinking water supply and waste water management infrastructure;
8.21. establish and supervise the application of pricing methodology for the temporary disconnection from (connection to) drinking water supply networks;
8.22. approve a Description of the Procedures and Conditions for the Operation of the Guaranteed Supply of Drinking Water and/or Waste Water Treatment;
8.23. supervise the level of the market opening and the efficiency of competition in the wholesale and retail trade (including the Electricity and/or Natural Gas Exchange), the prices applied to household consumers (including pre-payment systems), the percentage of consumers who have changed the supplier, the percentage of consumers disconnected from the electricity or gas supply networks, the fees charged for maintenance services and the supply of these services, within its competence – the cases of distortion of competition and constraining the activity in the energy sector;
8.24. control the effective unbundling of the activities in the energy sector, ensuring the independence of energy transmission and distribution activities from the commercial interests of energy activities and the avoidance of cross-subsidisation;
8.25. approve market research rules and conduct market research aimed at ensuring effective competition in the energy sector and preventing individuals with significant market power from abusing this power;
8.26. supervise and report to the Competition Council on restrictive contractual practices in the energy sector, including exclusivity clauses, which may prevent or restrict the possibility of concurrent contracts with more than one supplier for large non-household consumers;
8.27. draw up and approve rules for the supervision of the Energy Resources Market;
8.28. publish and submit recommendations to the Competition Council regarding the compliance of the prices of services in the energy sector with the requirements of transparency, non-discrimination and other legal requirements at least once in 5 years;
8.29. approve the Description of the Procedure for the Energy Market Surveillance;
8.30. approve the Methodology for Calculating Prices for the Use of Interconnectors Services, the management of transmission networks and interconnectors, their capacity determination, allocation and congestion management regulating rules laid down by the transmission system operator, and control the compliance with them;
8.31. coordinate the procedures for the use of electricity networks and sets the price for the services of the use of the interconnectors;
8.32. designate the electricity transmission system operator and supervise and control how the designated transmission system operator ensures independence and unbundling requirements in the course of its activities;
8.33. approve the standard requirements for the preparation of the compliance programmes of the natural gas distribution system operator and the storage system operator;
8.34. designate the operators of transmission, distribution, storage, liquefied natural gas systems and exchange, control and supervise their activities;
8.35. exercise the supervision and the monitoring of the regional market area in accordance with its responsibilities, in cooperation with the national regulatory authorities of the Member States concerned;
8.36. draw up an annual report on the monitoring of the electricity market and the natural gas market and submit it to the European Commission;
8.37. within its competence, perform the supervision and monitoring of the trading in the energy sources exchange and the activities of the operator of the energy sources exchange;
8.38. coordinate, on the proposal of the energy sources exchange operator, the enforcement measures for the performance of the obligations on the trading in the energy sources exchange applicable to the participants of the energy sources exchange;
8.39. approve the Regulations of the Energy Sources Exchange upon the proposal of the energy sources exchange operator;
8.40. upon the proposal of the energy sources exchange operator shall coordinate the rates set for the services provided by the energy sources exchange operator to the participants in the energy sources exchange;
8.41. upon the proposal of the energy sources exchange operator, shall coordinate the forms of the quarterly and annual reports of the energy sources exchange operator approved by the energy sources exchange operator, as well as the forms of the report of the energy sources exchange, submit proposals and instructions regarding the adjustment or submission of additional data;
8.42. coordinate standard terms of balancing power purchase-sale contracts with balancing electricity suppliers;
8.43. oblige energy undertakings to enter into contracts for the energy transmission, distribution or supply in the event of unjustified refusal by energy undertakings to provide services to third parties or to supply energy to consumers;
8.44. supervise the administration of funds for services of public interest;
8.45. coordinate the projected investments and investment plans of the energy undertakings engaged in the activities subject to price regulation, the drinking water suppliers and waste water managers;
.46. establish rates of depreciation (amortisation) of fixed assets used by the energy undertakings engaged in activities and the prices of which are state-regulated;
8.47. approve the costs of optimisation, development and reconstruction of energy networks and additional costs of the energy network operator related to the development of renewable energy sources;
8.48. draft and approve the auction provisions for the allocation of promotion quotas;
8.49. announce and organise the auctions of the allocation of promotion quotas for renewable energy sources;
8.50. approve the description of the procedure and conditions of heat production and/or purchase and standard terms of heat purchase-sale contracts compulsory to heat suppliers and independent heat producers, including persons intending to develop the production of heat and to connect to heat transmission networks;
8.51. approve the Heat Auction Regulation;
8.52. approve and coordinate the methods of heat allocation (distribution) that are recommended to be applied in the building;
8.53. approve the Clause Book for the Use of Heat Transmission Networks;
8.54. approve energy consumption and fuel consumption rates to heat one square meter of useful floor area, for the heating of one cubic meter of water and for maintaining water temperature (circulation);
8.55. within its competence, performs the state supervision of the protection of the rights and legitimate interests of energy consumers;
8.56. provide information to the consumers of electricity and natural gas on their rights, current legislation and the dispute resolution mechanisms available to them;
8.57. ensure that each consumer has access to his/her energy consumption data, including the provision of aggregated energy consumption data, without any indication of consumers' personal data, at the national level in an easily understandable form established by the Council and allowing all the consumers to use this aggregated data;
8.58. within the scope of its competence has the right to inspect the information provided by the energy undertakings to state institutions and/or consumers, to assess its reliability, without violating the requirements of the protection of information considered to be commercial (industrial) or professional secret;
8.59. control the technical safety, operation of the energy objects and energy equipment, the  reliability of production, transmission, distribution, and supply of energy and energy sources, and consumption efficiency in accordance with the established procedure;
8.60. verify the conformity of the requirements of construction (energy installation) projects specified in points (1) to (3) of Article 24(1) of the Law on Construction of the Republic of Lithuania;
8.61. participate in the work of the Commissions for completion of the construction of energy facilities set up by other state institutions;
8.62. organise the certification of energy employees referred to in Article 28 of the Law on Energy;
8.63. coordinate training programmes for energy workers;
8.64. provide conclusions on the prepared report on the safety of a dangerous energy object, verify that dangerous energy objects are safely used, participate in the work of the accident investigation commission of a dangerous energy object, investigate the accidents of energy objects and energy equipment, participate in investigating accidents in the workplace, household related to energy consumption;
8.65. control state and reserve energy sources and their management;
8.66. exercise the control of the amount of electricity consumed by the persons who have electricity generation permits, whose electrical equipment is connected to the transmission or distribution networks and who use and/or operate electricity generation equipment, energy equipment for their own economic needs in their internal networks;
8.67. control statutory measures to limit and suspend energy sources and energy supply and use in the event of an energy emergency in the country;
8.68. exercise the monitoring of the implementation of the measures indicated in the Law on Energy applicable at the state level after the declaration of the emergency situation in the energy sector, as well as interruption and restriction of electricity supply, within its competence cooperate in implementing these measures and make recommendations regarding their compliance;
8.69. organise the inspection of the heating systems with boilers and the air-conditioning systems for their compliance with the established efficiency requirements;
8.70. control the compliance with the special requirements for the installation and reconstruction of energy equipment, as well as the compliance of the energy equipment with the established requirements and the suitability for use;
8.71. perform the inspections of energy, drinking water supply and/or waste water management, surface waste water management undertakings;
8.72. verify that the energy objects, energy installations, consumer energy installations, and the procedure for supervision of the use of energy facilities' structures containing energy installations comply with the requirements of legal acts;
8.73. verify the conformity of the being installed and reconstructed energy equipment to the projects, whether the decisions of the structure design are properly executed, which determine the conformity of the structure to the essential requirements, and that the requirements for the safety and purpose of the structures established by legal acts (normative documents) are met;
8.74. approve the rules of the imposition of the sanctions for energy, drinking water and waste water treatment undertakings for breaches in performing regulatory activities;
8.75. impose sanctions for infringements of exercising regulated activities  and non-compliance with energy efficiency improvement requirements;
8.76. examine cases of administrative offence regarding administrative offences specified in the Code of Administrative Offenses of the Republic of Lithuania;
8.77. in an out-of-court order examine disputes between consumers and energy undertakings regarding the use of energy facilities, equipment and metering devices, interruption, suspension or limitation of energy supply, provision of energy saving services, operation or inaction of energy undertakings in supply, distribution, transmission, storage, connection, payment for consumed energy or services, application of state regulated prices and/or tariffs, balancing of energy and energy supply flows, as well as other disputes between consumers and energy undertakings in the field of energy and disputes arising from contractual relations between the consumer or subscriber and the drinking water supplier and waste water manager regarding the prices of drinking water supply and waste water management services, the prices of surface waste water management services, the prices of waste water transportation services, the prices of the temporary disconnection from the (connection to) drinking water supply network services and their application;
8.78. in an out-of-court order examine disputes between energy undertakings regarding the activities or inactions of energy undertakings in supplying, distributing, transmitting, storing energy, denying access to networks and systems to energy undertakings, connection, balancing of energy and energy supply flows, pricing and tariffs;
8.79. examine the disputes regarding technical safety of energy objects, installations and accounting instruments, operation, energy quality requirements, also regarding technical conditions for connection to or disconnection from energy objects or installations, energy supply, distribution, transmission, storage or inactivity by energy undertakings, the failure to grant the right to energy undertakings to use networks and/or systems and compliance with other regulatory requirements on regulated energy activities;
8.80. draft and approve consultation rules regulating consultation cases, procedures, and conditions;
8.81. provide consultations and other methodological assistance to economic entities in accordance with the procedure established by the Law on Public Administration, as well as provide information to individuals on issues within the competence of the Council;
8.82. perform works and provide administrative services corresponding to the nature of the main activities of the Council according to the rates approved by the Council;
8.83. perform other functions set by legal acts.

CHAPTER III

RIGHTS OF THE COUNCIL

9. To attain its operational objectives and perform the functions attributed to its competence, the Council shall have the statutory rights to:
9.1. by supervising the activities of persons in the sectors of electricity, natural gas, liquefied petroleum gas, heat, oil, renewable energy and drinking water supply and waste water management, to make decisions that are binding on individuals in accordance with the procedure and conditions established by legal acts;
9.2. obtain all information available from state institutions, including European Union institutions and other Member States as well as information available from municipal institutions and agencies, the undertakings the prices and tariffs of which are established (coordinated) by the Council, necessary to perform its statutory duties;
9.3. provide proposals regarding the regulated activities of energy undertakings to the Government, the Ministry of Energy and municipalities;
9.4. to apply to the Agency for the Cooperation of Energy Regulators (ACER) with a request to deliver an opinion on whether the decisions made by the Council comply with requirements of the legal acts of the European Union and/or guidelines approved by the European Commission;
9.5. provide certain part of the information of the transactions received from energy undertakings to market participants, provided that information about individual market participants or individual transactions considered as a commercial (industrial) or professional secret is not disclosed;
9.6. enter in cooperation agreements with state and municipal institutions and agencies of the Republic of Lithuania and regulatory authorities of other Member States, as well as with undertakings, agencies and/or organisations;
9.7. exercise the rights referred to in Article 241 (1) of the Law on Energy and in Article 341 (1) of the Law on Drinking Water Supply and/ or Waste Water Management undertakings when conducting inspections of the activities of energy, drinking water supply and/or waste water management undertakings;
9.8. submit an application for a permission to perform actions or interim measures to the Vilnius Regional Administrative Court  to perform the actions indicated in points (d), (f) and (g) of Article(13)(2) of the Regulation (EU) No 1227/2011 by the European Parliament and the Council of 25 October 2011 on wholesale energy market integrity and transparency (OL 2011 L 326, p. 1);
9.10. enter into contracts, to assume obligations, to have other civil rights and duties, provided that this is not contrary to the laws of the Republic of Lithuania.
10. The Council also has other statutory rights.

CHAPTER IV

ORGANISATION OF COUNCIL ACTIVITIES

11. The Council shall consist of five members. On the proposal of the President of the Republic, the Chair and four members shall be appointed and dismissed by the Seimas for the term of five years.
12. The Chair of the
Council shall appoint two Deputy Chairs from the appointed members of the Council. In the absence of the Chair of the Council, one of the Deputy Chairs of the Council shall be appointed to replace him/her by the order of the Chair of the Council, and in the case of the absence of the Chair and the Deputy Chairs of the Council, he/she shall be replaced by one of the members of the Council in the order laid down by the order of the Chair of the Council.
13. The Chair of the Council and/or members of the Council, whose term of office has expired, if they agree, shall remain in office until the appointment of the new Chair and/or members of the Council, but not longer than one year from the end of the term.
14. Only citizens of the Republic of Lithuania of good repute and with a university degree (at least a Master’s Degree or a degree equivalent to it) may be members of the Council. A member of the Council shall be prohibited from performing the activities incompatible with the civil service. A member of the Council may not be considered to be of good repute if he or she does not meet the criteria of good repute as established for civil servants by the Law on Civil Service of the Republic of Lithuania. No person who served on the management bodies of undertakings governed by the Council less than one year before the date of appointment to the office of the Chair or member of the Council shall not be eligible for appointment as the Chair or member of the Council.
15. The Chair of the Council and its members shall be
dismissed on the grounds provided for in Article 8 (7) of the Law on Energy.
16. Dismissal of a member of the Council before the expiry of the term of office shall be proposed to the Seimas by the President of the Republic. The Seimas shall appoint other persons to the office of the members of the Council dismissed before the expiry of the term of office on the proposal of the President of the Republic for a period of five years.
17. The activities of the Council shall be organized in accordance with the strategic action plan approved by the Council, which shall be prepared in accordance with the procedure established by legal acts. The strategic plan of the Council is published on the Council’s website.
18. The Council’s rules of procedure shall be adopted by the Council.
19. The Council shall be responsible for the validity and legitimacy of its resolutions.  The resolutions of the Council shall be adopted by roll-call voting. A meeting of the Council shall be valid if at least four members of the Council, including its Chair, are present. Decisions shall be taken by a majority vote of the members of the Council participating in the meeting. In the event of a tie, the Chair of the Council shall have the casting vote.
20. In performing its functions, the Council shall be independent and act impartially and transparently in the exercise of its powers. For this purpose:
20.1. The Council shall be legally separate and functionally independent of any other public or private person;
20.2. The Chair of the Council, members thereof, civil servants and employees of the administration of the Council shall act independently of all market interests and, in performing their duties, shall not seek, nor execute, any direct instructions of the Government or any other public or private person; this requirement shall not affect implementation of the national strategy and national policy specified by the Seimas and the Government, also close cooperation with other state institutions;
20.3. The Council shall adopt autonomous decisions, independently of any state or municipal institution, undertaking, agency or organisation, have separate annual budget appropriations and use them to independently implement the specified budget and dispose of the human and financial resources corresponding to its duties;
20.4. The Council consults and cooperates closely with the Ministry of Energy, the Competition Council, the State Consumer Rights Protection Authority, other state and/or municipal institutions, undertakings, agencies and organisations, the Agency for the Cooperation of Energy Regulators (ACER), as well as with regulatory authorities of other Member States and the European Commission in accordance with the procedures established by the legislation and cooperation agreements.
21. At the end of the calendar year, the Council shall, within four months, prepare a report on its activities of the previous year, including the results of the implementation of the strategic action plan, and publish it on its website and submit it to the President of the Republic, the Seimas and the Government.
22. The Council has the right to delegate, in whole or in part, its functions related to the issue of certificates for the installation and operation of energy equipment, change, suspension of validity of certificates, cancellation of suspension of validity, revocation of validity of certificates, control of the installation and operation of energy equipment, handling of cases of administrative offences for administrative offences referred to in the Code of Administrative Offenses, to be executed by the Chair of the Council.
23. The Chair of the Council shall:
23.1. direct the work of the Council;
23.2. organise and chair the meetings of the Council, public hearings in accordance with the rules of procedure of the Council;
23.3. sign the resolutions adopted by the Council;
23.4. decide on the opt-out of a member of the Council when considering relevant issues at the meeting of the Council;
23.5. adopt the annual estimates of the revenue and expenditure of the Council after the approval by the Council;
23.6. represent and/or authorise the members of the Council, public servants and employees working under an employment contract to represent the Council in the Republic of Lithuania and abroad;
23.7. determine the internal administrative procedures of the Council;
23.8. approve the structure of the Council administration, the regulations of the administrative divisions, the job list and job descriptions;
23.9. enter into contracts for matters falling within the competence of the Council or authorise the Director of Administration of the Council to do so;
23.10. issue orders, control their implementation in matters within its competence;
23.11. recruit and dismiss public servants and employees of the Council in accordance with the procedure established by the Law on the Civil Service, the Labour Code of the Republic of Lithuania and other legal acts regulating the legal status of civil servants and employees working under employment contracts;
23.12. perform other functions required by legal acts.
24. The procedure for remuneration of the Chair of the Council and its members is laid down in the Law on Energy. The Labour Code applies to the Chair of the Council and its members to the extent that their status is not regulated by the Law on Energy.
25. The Council’s activities are ensured by the Administration of the Council, which shall be organised by the Director of the Council Administration in accordance with the Council’s internal administrative procedures.
26. The maximum permissible number of civil servants and employees working under employment contracts for the administration of the Council shall be set by the Board of the Seimas.
27. The Administration of the Council shall:
27.1. prepare proposals to the Council on matters within its competence;
27.2. control the implementation of decisions taken by the Council;
27.3. prepare draft resolutions of the Council;
27.4. perform other functions as laid down in the regulations of the structural units of the Administration of the Council.
28. The procedure for the recruitment of the Council civil servants and employees working under employment contracts, the liability, the payment of salaries, the granting of social and other guarantees and other provisions shall be established by the Law on the Civil Service, the Labour Code, the Law on Remuneration of Employees of State and Municipal Institutions of the Republic of Lithuania and other legal acts regulating the legal status of civil servants and employees working under employment contracts.

CHAPTER V

INTERNAL ADMINISTRATIVE CONTROL OF THE COUNCIL

29. The financial and performance audit of the Council shall be carried out by the National Audit Office of the Republic of Lithuania. The internal audit of the Council shall be conducted by the Council’s Internal Audit Service in accordance with the procedures established by legal acts.
30. The financial control of the Council shall be exercised by public servants or employees appointed by the Chair of the Council.
31. The Chair of the Council shall control the implementation of the strategic plan of the Council.

CHAPTER VI

FINAL PROVISIONS

32. The Council may be reorganised or liquidated in accordance with the procedure established by the Law on Energy, the Civil Code of the Republic of Lithuania, the Law on Budgetary Institutions and other legal acts.