Government Watch. On Draft Amendments to the Law on Local Self-Government

The Lithuanian Free Market Institute has examined draft amendments to Article 9 and Article 9(1) of the Law on Local Self-Government and submitted its comments and proposals to relevant authorities. The draft law is aimed at removing the regulatory safeguards effective as of 1 July 2017 whereby municipality-owned enterprises may engage in new economic activity only upon the consent of the Competition Council.

First, it should be noted that the draft law provides a definition of non-economic activity under which municipalities will be able to engage in virtually any activity which may be seen as “complementing” a public service. Second, the draft law removes the requirement for municipalities to obtain the consent of the Competition Council prior to engaging in a new economic activity, stipulating a voluntary non-binding consultation. If implemented, these measures will once again allow municipalities to engage in any economic activity, create a situation when several laws regulate the same issue differently and threaten consumer interests and competition.

Given the tendency for municipalities and municipality-owned enterprises to restrict competition, the Lithuanian Free Market Institute calls for the rejection of the draft law, upholding the current regulation.

The full position paper (in Lithuanian) is available here.