Lithuania

Legal and regulatory shifts in one country are no longer isolated events, they increasingly influence approaches and expectations in neighbouring markets. Baltic law firm COBALT has published its annual Baltic Disputes Market Overview 2025, offering a regional snapshot of the key litigation and regulatory developments shaping Estonia, Latvia and Lithuania. Disputes Shaped by Compliance and Decision-Making Quality A clear theme runs through this year’s overview: courts and authorities are placing greater emphasis on well-substantiated reasoning and procedural quality. Documentation, consistency in internal processes and robust evidentiary standards have become central across multiple areas of law. In employment disputes, expectations around workplace conduct are tightening, and new considerations, including so-called “soft values”, are increasingly reflected in cases. Termination-related disputes remain common, with courts highlighting the importance of proper documentation and consistent workplace practices. In construction disputes, parties continue to rely on negotiated and court-mediated settlements to avoid lengthy litigation. Across the Baltics, disputes centre on two main areas: large-scale infrastructure and residential real estate projects. Major infrastructure developments, particularly Rail Baltica, remain a key source of litigation. Delays, cost overruns and challenges to building permits have brought contract performance and risk allocation into sharp focus, especially between the state, project companies and contractors. Digital and intellectual property matters also remain in focus. In Estonia, data protection enforcement intensified, including the imposition of a record fine and a rise in breach notifications. Several high-profile incidents have demonstrated how quickly inadequate safeguards can escalate into violations, investigations and costly disputes. Regulatory enforcement expands across key sectors Competition law saw notable shifts across the Baltics in 2025. In Estonia, the ECN+ Directive strengthened the Competition Authority’s powers, likely leading to more investigations and higher fines. The new rules have already sparked debate and may result in further disputes. In Latvia, the Supreme Court issued landmark rulings, tightening standards for private damages claims and prohibiting the use of covert criminal surveillance data in competition cases. In Lithuania, courts focused more on fundamental legal questions, including referring a key case to the EU Court of Justice, while also applying stricter scrutiny to certain decisions of the competition authority. White-collar crime saw notable developments across the Baltics in 2025. In Estonia, a new Prosecutor General prioritised efficiency, while debate continued over enforcement focus, particularly in cases involving public officials. Companies are encouraged to conduct internal investigations when facing economic crime allegations. In Latvia, sanctions and tax-related cases remained central. Legislative amendments strengthened penalties for serious sanctions breaches, and the Constitutional Court reinforced fair trial standards in confiscation cases. In Lithuania, liability for certain abuse-of-office offences was eased, while courts continued to impose prison sentences for bribery and addressed high-profile public order cases. Insolvency, corporate and tax disputes reflect structural shifts Insolvency trends eased across the Baltics in 2025. Estonia saw a slight drop in bankruptcies and fewer reorganisation cases, although new restructurings have so far been successful. Latvia also recorded fewer insolvency proceedings, while courts approved more restructuring plans than in the previous year. In Lithuania, bankruptcies declined, but restructuring cases increased sharply, largely due to the AUGA Group case. Corporate disputes remained largely stable across the Baltics in 2025. In Estonia, attention focused on board member liability and shareholder disputes, mainly concerning profit distribution and meeting decisions. In Latvia, dispute patterns remained similar, with the Supreme Court clarifying the effect of interim measures in shareholder cases. In Lithuania, shareholder and management disputes continued to dominate, while upcoming legal amendments may influence future conflicts. Public procurement volumes declined across the Baltics in 2025. Estonia and Latvia saw lower overall contract values, while Lithuania recorded a drop in both value and number of procedures. At the same time, green and quality-based procurement increased, particularly in Estonia and Lithuania. Disputes remain active, and legislative reforms are underway in Estonia and Latvia. Tax disputes in 2025 focused on enforcement and evidentiary standards across the Baltics. In Estonia, courts addressed board members’ tax liability and clarified the burden of proof in tax assessments. Latvia saw fewer audits but maintained a continued focus on VAT and compliance issues, alongside constitutional challenges to new tax rules. In Lithuania, courts dealt with VAT, corporate tax and exemptions, emphasising strict compliance while applying proportionality in penalties. The overview draws on COBALT’s experience, as well as publicly available information and noteworthy disputes handled by other law firms, with the aim of offering a grounded snapshot of where the disputes landscape is heading. We hope this report serves as a useful resource for businesses, legal practitioners and policymakers navigating disputes in the Baltic region. The full Baltic Disputes Market Overview 2025 can be found here: https://www.cobalt.legal/wp-content/uploads/2026/02/Baltic-Disputes-Market-Overview-5.pdf Article by:  Managing Partners Jaanus Mody, Lauris Liepa and Partner Professor Dr Rimantas Simaitis  

Market participants in Lithuania’s aviation sector are currently subject to an excessive legal requirement – the transfer of ownership of an aircraft must be executed in notarised form. AVERUS law firm calls on the relevant institutions to review this outdated practice, which imposes unjustified administrative and financial burdens on the aviation industry. "Aircraft should not automatically be equated with immovable property. The fact that they are high-value assets should not, in itself, dictate the form of the transfer transaction. This requirement is not applied, for instance, to ships – why, then, is a stricter regime applied to aircraft?" notes Laura Čereškaitė-Kinčiuvienė, Managing Partner at AVERUS and Head of the Aviation Practice. She highlights that Lithuania's requirement to notarise aircraft ownership transfer transactions is quite unique, as most other jurisdictions do not impose such a condition. "In commercial and business aviation, most civil aircraft transactions have a cross-border element. The notarisation requirement leads to unnecessarily high costs and time delays for the parties involved, undermining the competitiveness of our jurisdiction. It also creates an unjustified discrepancy between the treatment of aircraft and ships – the latter can now be transferred under a simple written form, since recent legislative changes reclassified ships as movable property,” said the aviation law expert. Notary fees for a single aircraft transfer transaction may reach EUR 5,000, given that commercial and business aviation aircraft typically exceed EUR 1 million in value. Recent Legal Changes Exempt Ships from Notarisation Under the current Civil Code provisions, aircraft and ships are classified as immovable property, requiring notarised transfer agreements. However, despite this formal equivalence, recent legislative changes have established a different practice for ships. Amendments to the Law on Merchant Shipping adopted in 2023 reclassified maritime vessels (excluding the LNG storage vessel Independence) as movable property. As a result, notarisation is no longer required for the transfer of registered maritime vessels in Lithuania. Similar Reforms Needed for Aircraft According to legal experts, the excessive notarisation requirement for aircraft transactions could be eliminated either by changing current administrative practice or by amending the Aviation Law to explicitly state that aircraft are not to be considered immovable property. "The Transport Competence Agency should no longer require notarised transfer documents for aircraft registered in Lithuania. Alternatively, the Aviation Law should be amended to specify that civil aircraft are not considered immovable property, unless otherwise provided by law. This would bring clarity and regulatory parity between aircraft and maritime vessels," adds Laura Čereškaitė-Kinčiuvienė. AVERUS invites relevant institutions and the legal community to engage in a dialogue on the need to modernise the regulatory framework and strengthen Lithuania’s position as a competitive jurisdiction for aviation. About AVERUS AVERUS is a business law firm with offices in Vilnius and Klaipėda. Since 2014, the international legal directory Legal 500 has recognised AVERUS as one of the leading law firms in Lithuania in aviation, shipping and transport, and dispute resolution. Daugiau informacijos Laura Čereškaitė-Kinčiuvienė Vadovaujančioji AVERUS partnerė, advokatė Mob.: +370 684 06452 El. paštas: [email protected]

Until recently only the state had the right to produce and trade Category A weapons. According to Lithuanian legislation, Category A weapons include weapons used for military purposes[1]. Civilian circulation of category A weapons was prohibited. However, increased cooperation between EU countries and arms manufacturers has led to a change in regulation, removing restrictions on the possession of category A weapons by persons other than the state. According to the current wording of the Law on the Control on Weapons and Ammunition, Category A weapons and ammunition for Category A weapons shall be prohibited in civilian circulation, except for the use by: legal entities registered in the Republic of Lithuania, which produce Category A weapons, European natural or European legal persons engaged in the repair or processing of weapons, and other persons who are granted the right to do so in accordance with the provisions of this Law. A business entity has the possibility to check if the product it wants to produce (e.g. a drone) is a weapon. To do this, the manufacturer should submit an application, along with drawings of the product and technical specifications, to the Police Department's Expert Commission. The Expert Commission will decide if the product is a weapon or a part of a weapon. Although there were fears that the licencing procedure itself would be extremely complicated and legally complex, the legislation proves otherwise. The procedure consists of several stages: (i) registration of the business entity for licencing purposes; (ii) issuance of a licence; (iii) issuance of a permit to possess category A weapons. Registration of the business entity for licencing purposes The application to register a business entity for licensing purposes is submitted via the police website (e.policija.lt). Registration is possible through the CEO or an authorised representative (e.g. a lawyer). Registration is completed within 3 working days. Once registration is finished, the licencing enters the second stage. Issuance of a licence The application for a licence is submitted via the police website (e.policija.lt). In addition to the application, the following documents shall be provided: the legal entity's corporate documents and a medical examination certificate confirming that an employee of the legal entity who works in a job directly related to the licensed economic activity does not suffer from a disease that prevents him/her from acquiring or possessing a weapon (F049/a certificate in Lithuania). The application for a licence must indicate the names of the CEO of the legal entity and the controlling person(s)/major shareholders. The police confirmed that information on ultimate beneficial owners is also requested. If these persons include non-citizens of the Republic of Lithuania, the application must include a certificate of conviction/non-conviction of the persons concerned. The License is issued within 30 days following submission of all required documents for licensing. Issuance of a permit to manufacture and store category A weapons Once the licence has been obtained, an application must be made for a permit to store Category A weapons. It is only after obtaining this permit that an economic activity (e.g. the sale or production of Category A weapons) may begin. Failure to apply for this permit within 3 years following the issuance of the licence will result in automatic cancellation of the licence. In order to ensure the protection of weapons and their components against internal threats and their traceability from manufacture to the end user, the manufacture and storage of weapons shall be carried out in accordance with requirements approved by the Commissioner General of the Lithuanian Police. The application for a permit to manufacture and store Category A weapons is also submitted via the police website (e.policija.lt). In addition to the application, the gunsmith(s) or person(s) who will be directly involved in the work related to the licensed activity must be indicated, and their medical certificates must be provided at the time of application. This is the most difficult stage. However, it is not the procedures or the documents to be submitted that make it difficult, but the challenging requirements for the premises where the weapons will be stored/manufactured or traded. In essence, the entire factory must be transformed into a safe. Proponents of such regulation base their position on the safety of citizens, but this is gradually being pushed aside. Initiatives to reduce requirements and facilitate licensing, if not for manufacturing / storing weapons, then at least for manufacturing / storing of their individual components, are already making their way through Parliament. [1] military missiles with explosive charges and their launching devices; automatic firearms; firearms disguised as other items; ammunition with armour-piercing, explosive or incendiary shells and shells for such ammunition and their launching devices; pistol and revolver cartridges with expansive bullets and bullets for such cartridges, except for cases where such cartridges and bullets are used for hunting by persons having the right to do so; automatic firearms that have been converted into semi-automatic firearms; semi-automatic short firearms firing centre-fire cartridges, which can fire more than 21 rounds without reloading, if a magazine holding more than 20 rounds is part of that firearm or a detachable magazine holding more than 20 rounds is inserted into it; semi-automatic long firearms firing centre-fire cartridges, which can fire more than 11 rounds without reloading, if a magazine holding more than 10 rounds is part of that firearm or a detachable magazine holding more than 10 rounds is inserted into it; semi-automatic long firearms designed to be fired from the shoulder, the length of which can be reduced to less than 60 cm without losing their functionality by using a folding or telescopic stock that can be removed without the use of tools; any firearms of category A that have been converted into signal, gas or imitation weapons; mufflers; cannons, howitzers, mortars, mortars of all calibers; grenades and grenade launchers, including tear gas grenades and their launching devices; all types of bombs, torpedoes, mines, their loaded and unloaded projectiles and their launching devices; flamethrowers and all incendiary projectiles; weapons whose laser beam is used for military purposes or to destroy a target; weapons designed to chemically destroy a target; tension weapons with a total tension force exceeding 1,200 newtons (N); firearms whose design allows them to be used disassembled or which are modified in such a way that they become easily concealed; weapons that use radioactive, electromagnetic, light, heat, infrasound or ultrasound radiation, dangerous biological effects, gases dangerous to life or health or other substances or energy dangerous to life or health as a means of destroying or otherwise damaging a target; ammunition intended only for weapons of category A; rifled firearms with a calibre of 12.7 mm or larger, smooth-bore firearms with a calibre of 20 mm or larger, and all automatic firearms with a belt feed, except for hunting weapons, antique weapons and replicas of antique weapons. Authored by: Managing Partner - Karolina Baronaite-Birmonte Associate - Gabriele Tamkeviciute