Database

In the European Union, there is no general principle for the use of copyright protected material comparable to the fair use/fair dealing principle in the US. Directive 2001/29/EC defines an optional, but exhaustive set of limitations from the author´s exclusive rights under the control of the “three-step test”. This is a clause in the Berne Convention that establishes three cumulative conditions to the limitations and exceptions of a copyright holder’s rights. The Directive has been transposed by Member States with significant freedom.

Chapter V of the Latvian Copyright Act implements the Directive and provides restrictions on the economic rights of the author. It explicitly introduces the “three-step-test.” Pursuant to Section 18, the restrictions on the economic rights of an author shall be applied in such a way that they are not contrary to the provisions for normal use of the work of an author and may not unjustifiably limit the lawful interests of the author.

Greenfield investments requiring licenses regulated by the Public Services Regulatory Commission, including telecommunications and other concessions, may be subject to significant due dilligence measures. This measure was highlighted by a report of the United States in 2014.

There have been reports of corruption and a lack of transparency in public procurement in Latvia.

The European Regulation No. 1042/2013 amending the Council Implementing Regulation No. 282/2011, declares that from January 2015, all supplies of telecommunications, broadcasting and electronic services will be taxable at the place where the customer belongs. These include, inter alia:
- images or text, such as photos, screensavers, e-books and other digitised documents e.g. PDF files;
- music, films and games, including games of chance and gambling games, and of programmes on demand;
- online magazines website supply or web hosting services distance maintenance of programmes and equipment;
- supplies of software and software updates advertising space on a website.

Both EU and non-EU suppliers have to register for VAT purposes and comply with the relevant obligations of the Member State where the customer is established, has his/her permanent address or usually resides. This may be burdensome as there are 81 VAT rates across the 28 EU countries and the rates may vary between 3% (Luxembourg) to 27% (Hungary) across member states. Furthermore, member states impose varying thresholds at which companies must begin paying VAT, ranging from EUR 0 to EUR 60,000.

As an alternative to obtaining multiple VAT registrations in each Member State where a supplier has a customer, affected suppliers may be able to opt to account for VAT across the EU via a a web-portal in the Member State in which they are identified. Hence, the system, known as the Mini One-Stop Shop (MOSS) scheme, allows taxable persons to avoid registering in each Member State of consumption.

The EU Copyright Directive allows “fair compensation” for copyright owners. As a result, several Member States have imposed national levy systems.

There are copyright levies on media and equipment which are collected from importers and manufacturers of recording devices and equipment. They can be also collected from resellers, wholesellers or retailers, if the importer or manufacturer has not paid the levy. The following levies apply:
- CD: 6%
- DVD: 6% of sales price.
- All types of PCs: 1.42 % of sales price.

The European de minimis threshold for import duties is harmonized. Goods with a value of up to 128 SDR / 150 EUR / 186 USD are exempted from customs duties. The VAT de minimis threshold is not harmonized within the EU and can vary between 10 and 22 EUR, i.e. Member States can decide on a value within this range to grant an exemption on VAT for imported goods.

According to Lithuania's de minimis rule, goods with a value of up to 19 SDR / 22 EUR / 27 USD are exempted from VAT.

The EU Directive on Audiovisual Media Services (AVMS) covers traditional broadcasting services as well as audiovisual media services provided on-demand, including via the Internet. Article 13 of the Directive imposes on Member States the obligation to ensure that on-demand service providers promote European works, despite there is no explicit content quota. The Directive has been implemented by Member States in different ways, ranging from very extensive and detailed measures to a mere reference to the general obligation to promote European works.

In Lithuania, Article 13 has been implemented by imposing on video-on-demand (VOD) providers the obligation to reserve a share of European works in their catalogue.

The Body of European Regulators for Electronic Communications (BEREC) found evidence of throttling of peer-to-peeer file sharing and video streaming in Lithuania.

The European Court of Justice has interpreted in 2014 that Internet Service Providers (ISPs) may be ordered by national courts to block customer access to a copyright-infringing website. This ruling aims to limit online piracy.

In 2015, the Lithuanian Parliament has approved to implement the blocking of gambling websites not registered in Lithuania.

Although the Directive 2000/31/EC (e-Commerce Directive) does not include notice and take down procedures, it states that for a provider to benefit from a liability exemption regime it must "act expeditiously to remove or to disable access to the information" upon obtaining such knowledge or awareness. It encourages self-regulation in this field (Article 16 and Recital 40).

In Lithuania, intermediaries have to act within one day to remove content in case of copyright infringement.

The Directive 2000/31/EC (E-Commerce Directive) is the legal basis governing the liability of Internet Services Providers (ISPs) in the EU Member States and includes a conditional safe harbor. The Directive covers any type of infringement of third-party rights, including intellectual and industrial property rights and personality rights.

The limitations on liability in the Directive apply to clearly delimited activities (mere conduit, caching and hosting) carried out by internet intermediaries, rather than to categories of service providers or types of information. While it was not considered necessary to cover hyperlinks and search engines in the Directive, the Commission has encouraged Member States to further develop legal security for Internet intermediaries.

Since not all Member States have transposed the relevant articles consistently, the national case law is divergent and leads to legal insecurity on an EU level.

In Lithuania, the law on information society services transposes the E-Commerce Directive and provides for a notice-and-takedown procedure for mere conduit and caching providers in cases of infringements of intellectual property rights.

Under the Directive on Data Retention, operators were required to retain certain categories of traffic and location data (excluding the content of those communications) for a period between six months and two years and to make them available, on request, to law enforcement authorities for the purposes of investigating, detecting and prosecuting serious crime and terrorism. On 8 April 2014, the Court of Justice of the European Union (ECJ) declared the Directive invalid. However, not all national laws which implemented the Directive have been overturned.

In Lithuania, a data retention period of six months still applies despite the the ECJ ruling.

It is reported that U.S. citizens and foreign investors have difficulties in obtaining and renewing residency permits, with decisions by the Migration Office on the issuance of permits taking up to six months.

For contractual service suppliers (CSS) and independent service suppliers (ISS), labour market test are required. High-skilled CSS and ISS need to receive a decision from the Labour Exchange office on job compliance with the needs of the Lithuanian labour market, which is similar to a labour market test.

It is reported that Lithuania is experiencing serious violations of intellectual property rights (IPR), piracy on the Internet, trans-shipment of pirated optical media and a large volume of hard goods piracy involving pirated optical discs.

It is reported that Lithuania's weak enforcement at the borders and frail Internet piracy surveillance is facilitating these IPR crimes.