Lithuania

All disposals are coordinated by the State property fund and the Bank of property. The planned auctions are known publicly, the prices of every property on sale are also public; however the final results of the sales are not provided. There is no information about recycling, redistributing, donating, abandoning or destroying equipment.

There is also a project of the decree prepared by the Ministry of Defence empowering it to sell state property to international organisations and legal persons of other countries without competition. Such procedures, according to the decree, would be carried out under the supervision of the MOD. The score should be between 2 and 3, but 3 has been selected to reflect that there are no known shortcomings in the procedures or contracts.

The activities of Bank of Property and State property fund are audited by an independent body as is required by the law on the State property fund and the law on Bank of Property. However, the results of the audit are provided only in a summary (audits are included in the financial and activity reports).

For example, in 2014 the audit was conducted by a private audit company UAB &quoute;BDO auditas ir apskaita&quoute; which stated that the financial and activity reports of the Bank of Property correspond to current legal acts and business accounting standards.

All disposals are coordinated by the State property fund and the Bank of property. The planned auctions are known publicly, the prices of every property on sale are also public however the final results of the sales are not provided). There is no information about recycling, redistributing, donating, abandoning or destroying defence equipment.

Considering the budget of the State Security Department as &quoute;secret&quoute; expenditure and its budget along with the defence budget together as the &quoute;defence and security&quoute; budget, &quoute;secret&quoute; spending amounts to approximately 5 per cent of the defence and security budget in 2015.

The monitoring function of spending on secret items is attached to the Public Procurement Office. However, it does not have capacity to monitor every secret procurement and analyses only the minority of them (Interview with Interviewee 2). The members of parliamentary Defence Committee (only those with security clearances can be members of the Defence Committee) have access to secret information and classified budgets, and therefore may be provided with extensive information on all spending on secret items. There is evidence of the Committee having demanded and obtained secret information (3, 4, 5). However, overall there is no data on how detailed those budgets are. The head of the Defence Committee, Mr. A. Paulauskas, has said that the budget of State security service should not be known publicly. (7)

TI Reviewer3937: Parliamentarians who are members of the Defence committee have security clearances and thus can have access to secret budgets and the ways in which they were spent. (5) The financial audits of the State Security Department are carried out by the National audit office of Lithuania (state institution) which in 2014 found some misuse of funds (saved finances were distributed to staff as bonuses although this was not foreseen in financial plans, also some staff members were renting state owned flats cheaper than it had to be) (6). Internal audits are sent to National Audit Office of Lithuania and the Ministry of Finance that informs accordingly the Parliament and the Government. (4) While positive evidence of details being excluded has not been found, it is not clear what the degree of detail in audit reports is.

All defence expenditure is included in the official budget: the budget consists of national financial allocations and financial contributions received through international agreements. Funds received through international agreements are also allocated in the official defence budget.

All procurement expenditure that is not secret is subject to the Public Procurement Law, except the finances that are received via international agreements. The Law foresees secret procurement but not off-budget expenditure (1) (2). Public procurement office regularly informs about the financial expenditure in defence sector and also identifies the sum and the percentage that was spent secretly (4). The link to such reports is added to sources section. (4)

RESPONSE TO PEER REVIEWERS: The information provided pertains to extra-budgetary, not off-budget, expenditure. There is no evidence that off-budget expenditure is officially permitted.

TI Reviewer3937: The budget of the Defence Ministry consists of national financial allocations and financial contributions received through international agreements. The sum that the Ministry receives through international agreements is included in annual financial reports and budgets, and is publicly available (Interview with Interviewee 1).

RESPONSE TO PEER REVIEWERS: The information provided pertains to extra-budgetary, not off-budget, expenditure. There is no evidence that off-budget expenditure is officially permitted and no evidence of it occurring has been found.

The classification of information is legally regulated with provisions foreseen in the Law on Office and State Secrets (2). This Law also describes the functions and competence of the Commission for Coordinating the protection of state and office secrets. This Commission establishes criteria for different classifications of secret information and provides recommendations on how to improve the protection of secrets. However, this Commission does not analyze whether particular information was classified reasonably (3). This might be done by the expert Commission within the State security department (3) upon request (4).

A recent scandal about leaking classified information indicates inadequacies int he classification regime. The head of the parliamentary defence Committee told Lithuanian media that the recently leaked document shouldn't have been marked as secret (5).

The Law on public procurement in defence sector also states what kind of information might be secret when it comes to contracting and other public procurement procedures. However, Interviewee 2 emphasises that the Public Procurement Office is not capable to fully monitor procurement system to see if all information presented as secret has solid grounds for that. Therefore it would be incapable of fully preventing the classification of certain information as secret on the pretext that it is necessary for national security and intelligence services (when this is not the case).

TI Reviewer3937: There is no evidence suggesting that military-owned businesses exists. The MOD is not included among the ministries that control (have beneficial ownership) and are responsible for state owned joint-stock companies. The full list of such companies might be found online. (1) A state-owned enterprise for ammunition production, &quoute;Giraitės ginkluotės gamykla&quoute;, is controlled by the Ministry of Economy.

TI Reviewer3937: There is no evidence suggesting that military-owned businesses exists. The MOD is not included among the ministries that control (have beneficial ownership) and are responsible for state owned joint-stock companies. The full list of such companies might be found online. (1) A state-owned enterprise for ammunition production, &quoute;Giraitės ginkluotės gamykla&quoute;, is controlled by the Ministry of Economy.

The Law on Military Service clearly describes the situations in which military officials can hold interests outside military activities, namely:

&quoute;Professional military servicemen may not: with the exceptions stipulated by the law, work for the undertakings, institutions and organisations outside the national defence system as employees, advisers, experts or consultants, be members of their management bodies, hold another elective or appointed position, receive another salary, with the exception of remuneration for a creative or pedagogical activity; control by proxy over 10 per cent of shares in a single undertaking; render commercial services or represent the interests of the undertakings, institutions and organisations outside the national defence system and travel abroad for these purposes; be a member of a trade union; participate in a strike; use service time and property and the opportunities provided by service for the purposes other than the service. A serviceman who owns a personal enterprise or is a general member or a limited member of a partnership or holds shares in a public limited liability company or member shares in an agricultural company must manage, use and dispose of this ownership in such a way as to preclude a conflict of private or service-related interests as a result of possession thereof or links with the company (undertaking) in which the serviceman holds ownership. Servicemen in professional military service of the national defence system who carry out operational activities and officers in professional military service must, in accordance with the procedure laid down by laws and other legal acts, declare their private interests&quoute;.

There is no evidence of unauthorised private enterprise by military personnel or other defence ministry employees. There is a possibility that MOD officials could have financial interests in private enterprises, however, this should be declared in the publicly available, online database of private and public interest declarations. Nevertheless, the declarations of the officials that do not hold high positions are not public and there is insufficient control and monitoring as to whether officials update these declarations on time and in a comprehensive manner.

RESPONSE TO PEER REVIEWER 1: The examples provided pertain to organised crime activities, which are the focus of another question. As no evidence of unauthorised private enterprise could be found, score 4 was maintained.

There is a clear commitment to anti-corruption through anti-corruption programs in defence institutions and the President of Lithuania states that transparency and anti-corruption are the top priorities in her activities. However, no publicly declared commitments made by the defence establishment were found through a news search (the biggest portals in Lithuania that were monitored: DELFI, 15min.lt, lrytas.lt).

The Lithuanian Criminal Code (articles 225-229) criminalises bribery, abuse of office and negligence in performance of official duties. It foresees disciplinary measures such as a prohibition on certain types of employment and sanctions of imprisonment of up to 8 years, depending on the severity of the offence and the amount of the bribe. Issues such as conflict of interest, gifts and hospitality are covered in Codes of conduct for military and civilian personnel; sanctions for misconduct include an official reprimand, demotion, or assignment to additional tasks. Signals of wrongdoing are investigated by the MOD's Inspector General, who is obliged to inform the Minister of Defence about wrongdoing and, if a suspicion of a criminal offence exists, to forward the allegations to the Prosecutor's Office. (2)

The researcher did not find any information about the ongoing or recently carried out investigations. However there is evidence that the breaches of the Code on military discipline are followed by concrete actions. For instance, in 2002 several soldiers were sentenced to domiciliary arrest for not following the Code. (5) The effectiveness of the Inspector General's office, however, has been doubted: the defenders of the rights of military personnel have approached the President of Lithuania asking to restructure the institution of the General Inspector for its non-transparent and unclear decisions. (4)

TI Reviewer3937: There is no legislation to protect whistleblowers either in the public or private sector, military services and defence institutions included. Only legal provisions to protect witnesses, victims and other participants in criminal proceedings from potential retaliation and intimidation are in place.

There is a reporting hotline operated by the MOD's Inspector General, who is responsible for integrity and anti-corruption measures. Although it is in place, there is no information on how the whistler-blowers are handled, what procedures follow after complaints are received, etc. The effectiveness of the Inspector General's office, however, has been doubted: the defenders of the rights of military personnel have approached the President of Lithuania asking to restructure the institution of the General Inspector for its non-transparent and unclear decisions. (5) The latest anti-corruption research, &quoute;Lithuanian Map of corruption,&quoute; shows that only 18 % of Lithuanian residents would be ready to blow the whistle (5). And this is mostly because people (48%) are afraid and says they might be disadvantaged in the end.

RESPONSE TO PEER REVIEWER 2: Agree, score raised to 1.

There is an established system based on pre-set criteria for appointing military personnel. Military officers are appointed by the Defence Minister after he/she receives recommendations from the internal Commission which is organized every time in those institutions that have opened a competition for new staff members (3, 4). The composition of the Commission depends on what kind of positon the Institution is looking to fill: executive or not (3). Each candidate is considered according to specific criteria. However, the Minister of Defence might not promote a candidate due to the lack of political trust in that person (even when all criteria and requirements are fulfilled). The interviewees note that the final stage of appointments is not transparent enough and might be politicized.

The Personnel Management document published by the MoD states that more attention should be paid to personnel in sensitive or managing positions and that such personnel should be specially trained (if necessary). (2) However, there is no evidence of training taking place or information on its content. While there is evidence that public sector employees are bound by conflict of interest regulations, there is no evidence of regulations on time in post and independent oversight of personnel in sensitive positions.

The number of civil and military servants as well as their military structure is publicly available and is published by the Ministry of Defence. There are plans to considerably increase the size of the military by 2019 and this plan is also accessible to the public.

TI Reviewer3937: Pay rates for all posts for civilian and military personnel are openly published either on the MOD website (1) or in the relevant Government decree (3), but no information on the overall size of the allowance received is available. (1,2) Allowances as specified on the MOD website are included in salaries, but there is no data on proportions.

RESPONSE TO GOVERNMENT REVIEWER: As information on allowances is not detailed, score 3 was maintained.

Pay rates for all posts for civilian and military personnel are openly published either on the MOD website (1) or in the relevant Government decree (3-4). There is a publicly known well established payment system, salaries are posted online and, according to the interviewees, paid on time. Media search also did not yield any results suggesting delays of salary payments for personnel working in the defence sector. Although there were articles about salary delays in public sector in 2008 (6), no specific information about defence sector was found.

It should be noted that information available is about the salaries for various positions and not specific individuals.

There is an established system for appointing military personnel, based on pre-set criteria. Top military officers are appointed by the Defence Minister or the President, following recommendations from an internal Commission which is set in institutions that have opened a competition for new staff members. (5) The composition of the Commission depends on what kind of position the institution is looking to fill: executive or non-executive. (5) Each candidate is considered according to exact criteria. The meetings of the Commission are recorded and the minutes are kept together with other legal acts in the relevant institution (5). However, it is possible that a candidate may not be appointed due to the lack of political trust in that person, although the researcher found no evidence of such instances. The interviewees also emphasized that there selection and promotion procedures have not prevented the maintenance of military officers with low skills and motivation; it is unclear to what extent this affects middle and top management.

Personnel promotions are regulated by legal documents that are available online. Military officers are promoted by the Defence Minister after the internal Commission set up in connection with each vacancy provides its recommendations. (5). Each candidate is considered in accordance with exact criteria. However, according to the interviewees, the Minister of Defence might not promote a candidate due to the lack of trust in the person (even when all criteria and requirements are fulfilled).

The researcher did not find any information (i.e. real-life examples) on independent scrutiny of the promotion of senior personnel. However, the meetings and the process of the Commission are recorded, the minutes are documented and held together with other legal documents in that institution where the competition is place (5). Moreover, the Commission consists of not less than 3 or 5 members depending on the position for which the competition was opened; trade union and civic society representatives may participate in those meetings in order to ensure impartiality. (5) Their participation does not, however, give them voting rights.

Compulsory conscription in Lithuania was reinstated in 2015. The major risks for corruption appear when asking permission is sought to postpone being conscripted due to the reasons identified in the Minister's decree (health reasons, personal and family conditions, etc.) (1)

Each case is handled individually and there are no exact criteria for what kind of conditions would be sufficient to get the permission to postpone the conscription. If health reasons are the basis for non-conscription, candidates are obliged to present medical certificates. (1) However, given that 20% of Lithuanian residents admit they paid bribes to doctors and especially when getting the certificates on their health conditions (2),
the likelihood of this practice occurring is high.

The Ministry of Defence has not published any policy on how to control those risks. The Lithuanian Criminal Code (articles 225-229) criminalises bribery, abuse of office and negligence in performance of official duties. It foresees disciplinary measures such as a prohibition on certain types of employment and sanctions of imprisonment of up to 8 years, depending on the severity of the offence and the amount of the bribe. However, it is unclear whether enforcement in cases of bribery related to conscription will be effective. The score has been selected on the basis that there is legislation which would cover such bribery but it may not be an appropriate deterrent and there is evidence of cases of such bribery.

TI Reviewer3937: The Lithuanian Criminal Code (articles 225-229) criminalises bribery, abuse of office and negligence in performance of official duties, but there are no specific provisions related to obtaining preferred postings. According to the interviewees, the selection procedure is clearly regulated. The candidates are considered by a special Committee that provides its recommendations to the Defence Minister. However, the final process of decision making lacks transparency and clarity.

Compulsory conscription in Lithuania was reinstated in 2015. The major risks for corruption appear when asking permission is sought to postpone being conscripted due to the reasons identified in the Minister's decree (health reasons, personal and family conditions, etc.) (1) However, it is possible that corruption would also apply to attempts to obtain postings in particular units.

Each case is handled individually and there are no exact criteria what kind of conditions would be sufficient to get the permission to postpone the conscription. If health reasons are the basis for non-conscription, candidates are obliged to present medical certificates. (1) However, given that 20% of Lithuanian residents admit they paid bribes to doctors and especially when getting the certificates on their health conditions (2),
the likelihood of this practice occurring is high.

The Ministry of Defence hasn't published any policy on how to control those risks.

There is no evidence of ghost soldiers and the phenomenon is unlikely to occur due to the strength of the payment systems and the transparency around pay rates, troop numbers, and armed forces structures. The number of civil and military servants as well as their military structure is publicly available and is published by the Ministry of Defence (1, 3). Pay rates for all posts in civilian and military personnel are openly published either in the website of MOD (4) or in the relevant Government decree (6). Chains of command are separated from chains of payment, which also diminishes the likelihood of ghost soldiers being hidden somewhere along the payment chain.(7, 8)

However, the interviewees emphasised that there are low quality military officers with low motivation that regularly get salaries and keep their positions although their appropriateness and suitability for the post is in doubt. (Interviews 1, 3, 4, 5)

Pay rates for all posts in civilian and military personnel are openly published either in the website of MOD (4) or in the decree of the Government (6). Chains of command are strictly separated from chains of payment, which is foreseen and regulated by law: payments are coordinated by the MOD, not by commanders, and basic pay does not appear to be discretionary.

No media reports suggesting that chains of payment are not robust were located.

There is a Code of Conduct for military personnel. It includes provisions discussing honesty, conflicts of interest, respect of human rights, rights and responsibilities of military personnel, etc. However, these provisions are not detailed and comprehensive, namely they do not include any guidance how one should act when a doubtful situation occurs. There is a separate code for civilian personnel working in public sector (no matter what institution) (5), which also covers conflicts of interest, provisions about honesty, reputation, etc. The civilian code also covers hospitality. Bribery, however, is not mentioned in either code.

Any misbehaviour in MOD is analysed by the General Inspector (an internal body in Defence Ministry that is responsible for anti-corruption issues in defence sector). However, there are doubts if military personnel trust it. The Defenders of the rights of military personnel (a public entity) have approached the President of Lithuania asking to restructure the institution of the General Inspector due to its non-transparent and unclear decisions. (3)

Anyone who recognizes any possible breaches of the civilian code may inform about this the head of the institution who decides if an internal investigation is needed (5). In the code for military staff it is stated that every commander is responsible for his/her soldiers and decides if internal investigation is needed (1). The score has been selected on the basis that the code is not adequately comprehensive and it is unclear how robust and effective the oversight mechanism is in practice.

TI Reviewer3937: The Statute of Army foresees that the breaches of the Code of Conduct result in certain consequences: a person may get an official reprimand, be demoted, be assigned to additional tasks, etc. Any suspicion about the breaches of the Code of Conduct are analyzed by the Inspector General . However, the results of internal investigations are not public. No information was found to verify whether or not breaches of the code of conduct (specific to the defence sector) are addressed in practice.Results of criminal prosecutions might be reported on in the media, however, there does not appear to be a policy that they need to be made public.

RESPONSE TO PEER REVIEWER 1: The Public Procurement Office is a separate institution which co-ordinates the activities of public procurement, supervises compliance of procurement activities in accordance to the Law on Public Procurement and the implementing legislation. The dismissal of the Head is not directly related to the defence sector and is not relevant here. Score maintained.

RESPONSE TO GOVERNMENT REVIEWER: No public information was found. Score maintained.

TI Reviewer3937: There is evidence that anti-corruption training takes place, but there is no evidence about its regularity and it is not clear whether all personnel participate. On the basis of publicly available information, it can be concluded that training sessions cover topics such as language courses, defence skills, computer literacy skills but there is no information about anti-corruption trainings. However the interviewees stated that such trainings also take place but could not provide information on who participates. In its 2013 Performance Report, the Lithuanian Special Investigation Service (LRSTT) - the statutory body responsible for anti-corruption education - said it carried out training in the Ministries of Health, Energy, Economy, Agriculture, the Prosecutor General's Office and the Bank of Lithuania -- but not the Ministry of Defence.

RESPONSE TO GOVERNMENT REVIEWER: No public evidence or data is available to support the information provided. Score maintained.

TI Reviewer3937: Allegations of probable corruption or misconduct are analysed by the Inspector General's office (1-3), which is obliged to inform the Minister of Defence about misconduct and forward allegations to the Prosecutor's Office if criminal activity is suspected. (4) Although the internal investigations and their results are not made public, the interviewees stated they took place and measures were taken. Results of criminal prosecutions might be reported on in the media, however, there does not appear to be a policy that they need to be made public.

TI Reviewer3937: There is no separate definition of a facilitation payment in the legislation, other than the articles on bribery in the Criminal Code. However, these articles comprise any kind and form of a payment by a civil servant or a person equivalent thereto who, for own benefit or for the benefit of other persons, directly or indirectly accepts, promises or agrees to accept a payment, demands or provokes giving it for a lawful act or inaction in exercising his powers. Any sort of payment fulfilling such a definition would be considered to be a bribe and therefore, deemed illegal. While one might argue that due to the fact that there is no separate definition there is a risk that the understanding of a facilitation payment might get blurred in the chain of command and a person could get involved in such payments, the broad definition of a bribe should be sufficient to clarify this. It is also worth noting here that facilitation payments do not even have a direct translation to Lithuanian as this concept in general not widespread in the national context.

Sanctions for bribery include disciplinary measures such as a prohibition on certain types of employment and imprisonment of up to 8 years, depending on the severity of the offence and the amount of the bribe.

In practice, in 2014 the total of 179 cases of bribery, bribery of an intermediary and graft have been referred to the courts in Lithuania. During 2006-2013, 3141 cases based on these three articles in the Criminal Code have been heard in Lithuanian courts. It is hard to evaluate whether this means that the existing measures are sufficient since there is no statistical information on the exact number of unaccounted bribery.

The military doctrine adopted in 2010 does not mention corruption issues at all. There is an anti-corruption plan in defence institutions, but no separate document to identify corruption risks on operations. However, interviewees have indicated that officers being deployed on operations receive specific training which does include anti-corruption topics; this may suggest that the armed forces are aware of corruption as a strategic issue on operations. As mentioned in Question 53, there is no public information to verify the level of participation in the training or its regularity.

TI Reviewer3937: There is evidence that training takes place but there is no public information (available online) as to whether all personnel participate and how regularly it takes place (1-3). According to the interviewees (Interviewees 1,3,4), such trainings are held for commanders at all levels. However, as they stated in the interviews, some incidences of corruption have been mishandled by officers. There is, however, no publicly available evidence to confirm the allegations of mishandling corruption issues.

RESPONSE TO GOVERNMENT REVIEWER: Noted. However, due to lack of publicly available information, it was not possible to verify how comprehensive the training is and whether is touches on corruption as a strategic issue for the mission. Score maintained.

Lithuania has deployed 10 people to Central Africa, 2 to Mali, 1 to Kosovo and 3 in Somalia; they joined the troops of other countries. (1) According to Interviewee 4, sending trained professionals to monitor corruption risk would not be cost effective and therefore Lithuania does not have such personnel.

RESPONSE TO THE GOVERNMENT REVIEWERS: The sources quoted could not be accessed and thus it was not possible to verify the information provided, and the interview suggests that monitors are not deployed. The score has been raised to 1 to reflect uncertainty over deployment of monitors.

The Law on public procurements in defence does not apply to contracts in operations or peacekeeping missions. (1) According to the interviewees, guidelines exist and staff are specifically trained in relation to corruption risks in contracting during the operations or peacekeeping missions. Interviewees indicated that some anti-corruption provisions were included in contracts in Afghanistan; however, this information is not public and cannot be independently confirmed (media searches did not bring any results either). Therefore, it is not possible to confirm how detailed and tailored existing guidance is.

There is no evidence that defence sector institutions cooperate with or employ private military contractors; the interviewees also stated that they had heard nothing that would point to it happening. Yet there are also no explicit regulations forbidding the employment of PMCs.

The Law on Public in the defence Sector procurement covers the defence and security sector. It lays out the procedures that have to be followed in order to purchase any items or services and describes situations when the law might not be applied: when it is necessary to protect state security and national interest, and when purchases are necessary for operations or peacekeeping missions. (1) The interviewee noted that this provision in the law creates corruption risks and leaves space for purchasing organisation to decide what items are subject to national security and what are not. (Interviewee 1) The Public Procurement Office oversees the application of clauses enabling procurement without a tender, but it is not clear whether audit verification of these processes occurs at later stages.

The law does appear to be mostly enforced. Lithuania's 2011 National Anti-Corruption Plan set a target of 80% e-tendering for public procurements by 2014, in the interests of transparency. Lithuania exceeded this target and by 2012, 83% of public bids were electronic, indicating a large degree of transparency.

The procurement cycle a formalised process regulated by Law on Public Procurement in the Defence Sector (4). Some elements of the defence procurement cycle are disclosed in detail, namely: the subject of public procurement, the amount of objects planned to be purchased, the length of the contract, the documents about certain specifications, type of procurement, the winners, the amount spent, etc. The disclosure covers not only major purchases, but also routine issues such as fuel supply, accommodation contracts, etc. (1) However, the contracts and the documents surrounding their implementation are not public (1-5) Information on asset disposals, while it is public, does not include details on the final price obtained for particular items.

The Public Procurement Office in Lithuania is responsible for preventing violations of the law, collecting and analysing information about the contracts and their implementation. It also consults the purchasing organisations if any questions regarding public procurement come up, and oversees the application of clauses enabling procurement without a tender. However, the interviewees note that the PPO has insufficient capacity to carry out the responsibilities fully and not all procurements are monitored and analysed in detail. (Interviewee 2, Interviewee 4) In 2011, the Office received 4.35 million and 820 thousand LTL of technical aid from the state budget and had 72 employees. This number of employees has remained stable since May 2009, even though the number of functions designated to the PPO is increasing. This sheds doubt on the PPO's ability to monitor the execution and implementation of contracts. In 2013, the National Audit Office described the monitoring of public procurement as 'inadequate' and said violations go unpunished.

The National Audit Office itself also constitutes a layer of oversight and reports on procurement issues in its Annual Reports. The NAO is an independent institution and its audits are publicly available.

RESPONSE TO GOVERNMENT REVIEWER: Given the analysis above, score 2 was maintained to reflect doubts on the effectiveness of PPO audits.

TI Reviewer3937: The procurement cycle a formalised process regulated by Law on Public Procurement in the Defence Sector (3). There is a legal obligation to put the procurement details online in the central e-procurement platform (1,3). Lithuania's 2011 National Anti-Corruption Plan set a target of 80% e-tendering for public procurements by 2014, in the interests of transparency. Lithuania exceeded this target and by 2012, 83% of public bids were electronic, indicating a large degree of transparency.

Some elements of the defence procurement cycle are disclosed in detail, namely: the subject of public procurement, the amount of objects planned to be purchased, the length of the contract, the documents about certain specifications, type of procurement, tender winners, the amount spent, etc. The disclosure covers not only major purchases, but also routine issues such as fuel supply, accommodation contracts, etc. (1) However the contracts and the documents surrounding their implementation are not public (1-3)

Information about the ongoing public procurement and the sums involved is provided publicly, except for procurement for items classified as secret and sensitive in terms of national security. The financial report of 2013 indicates that 11.5 % of all procurement were items classified as either secret or confidential; another 31% were &quoute;with restriction&quoute;. (2) However, the interviewed public procurement official also stated that there are grounds for doubting if all secret procurements are justifiably secret. (Interviewee 2)

There is little information on planned procurement processes. Existing regulations mandate that contracting entities have to prepare annual procurement plans in advance and release a summary thereof by 15 March each year; however, multi-year plans were not found. (4)

Companies that are willing to bid for work for the Ministry of Defence or for the armed forces are not required to have compliance programmes or business conduct programmes (1). To have such conditions is not obligatory; however, these requirements might be foreseen by the purchasing organisation. It is up for the purchasing organisation to decide. According to the interviewees, such practice is not widely spread. (Interviewee 2, Interviewee 4)

The contracting authority is obliged to reject requests to participate if the supplier who is a natural person or the head of the supplier which is a legal person has an unspent or unexpunged conviction or a judgment of conviction was passed and became effective against the supplier (legal person) within the past five years for participation in a criminal organisation, formation or being in charge thereof, for bribery, bribery of an intermediary, graft, fraud, use of a credit, loan or targeted support not in accordance with its purpose or the established procedure, credit fraud, tax evasion, provision of inaccurate data on income, profit or assets, failure to file a tax return or to submit a report or another document, acquisition or handling of the property obtained by criminal means, money or property laundering or a judgment of conviction was passed and became effective against the suppliers of other countries for the crimes defined in the legal acts of the European Union listed in Article 45(1) of Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts. (1) This was the basis for selecting score 1.

According to the interviewees, the content of the National Defence and Security Strategy is so broad that all procurement requirements fall under it. Due to its abstractness it could not be otherwise. For instance, the strategy states that the main defence interests and priorities are as follows: security in Lithuania, NATO and EU, democracy, human rights in Lithuania and neighbouring countries, stability, satisfying security resources and finances, information security, etc. The National Military Strategy of 2012 does not provide specific guidance either, with the only more specific requirements being related to inter-operability with other NATO forces.

The National Audit Office annually carries out financial reports of the MOD and Lithuanian armed forces and analyzes the expenses for catering, arms, real estate, salaries and etc. These audits are available online. (2) For instance, the following findings were among the results of the audit report for 2014 (2): some expenses were allocated to wrong budget lines which later led to misleading information about the spending, there were some signs of inefficient spending, there were procurements with wrongly fixed value, etc. There is evidence that after such audits the MOD starts internal investigations. (3) However, there does not appear to be any verification of the flow from the strategy to individual procurement decisions. There are no rationales within the publicly available procurement documents that would provide the justification for why the particular pieces of equipment are necessary.

TI Reviewer3937: The Law on Public Procurement in the Defence and Security Sector defines the exact terms when the calls for tenders have to be made public (1). According to that law, the Ministry of Defence and other security- related institutions publish their calls in advance. The planned procurement processes are online and easily accessible, and they contain technical specifications. However, Transparency Lithuania noted in a 2013 report that, as not all bids are published, it is not possible to assess whether the chosen offer fulfilled the technical specifications.

However there might also opportunistic procurements, namely undisclosed public procurements. (8) 23.8 % of all public procurements in defence and security sector were undisclosed. 4.6 % of all procurements were secret, 6.9 % were confidential and 31 %- with &quoute;limited use&quoute; (8). While there is no positive evidence that these purchases are not based on qualified requirements, there is a risk thereof as their terms are not publicly available.

RESPONSE TO PEER REVIEWER 2: Secret and confidential procurement processes, or those with &quoute;limited use&quoute;, do not necessarily are opportunistic. For this reason score 3, not 2 was assigned (as stating that only major purchases are on clearly identified requirements would be too strict and would lack evidence).

TI Reviewer3937: Single-sourcing is permitted by law (1) with no limits identified, although writing specifications in a way that would only favour one bidder is legally prohibited. According to the annual report on public procurement in the defence and security sector, carried out by the Public Procurement Office for the year 2013, there were 35 cases (43.2 %) out of 81 when only one bidder appeared (3). 27.6% of all procurements were cancelled but the reasons were not explained. (3) According to the interviewees (1.2.3), the market in defence sector is not big enough and sometimes only a couple of companies participate in public procurement.

Score 3 was selected as it is not clear whether the procurement processes were single-sourced by design or due to a limited number of tenderers. It is also not clear how many of the procurement procedures cancelled were single-sourced and whether this would not bring the overall number to below 30%.

TI Reviewer3937: Tender boards are subject to regulations and codes of conduct applicable to all staff and personnel, as well as a specific code for procurement in the defence sector; these codes foresee disciplinary responsibility for any wrongdoings and abuse of power. The audits of tender boards are not carried out regularly but rather when the auditing institutions have concerns about certain procurement decisions (concerns about the sums, results, procedures). According to the interviewed public procurement official, there was 1 audit in defence procurement and the activities of the board in 2013. The Ministry of defence has as internal audit department that organised around 20 audits in 2013 (Interview with Interviewee 4) but these audits were not entirely on public procurement processes and boards (though these areas were also included). External audits were also carried out by National Audit Office.

Collusion between bidders is not specifically defined by law, though such actions would violate the principles of transparency and competition included in the Law on Public Procurement in Defence sector, Article 6, and the law on competition. The Supreme Court has also stated that transparency is an imperative norm in public procurement. In case no. 3K-3-583/2008 in 23/12/ 2008, the Supreme Court stated that the principles of procurement are imperative norms that may be directly used in legal arguments to protect the interests of procurement bidders. In 31/09/2009 case No. 3K-3-323/2009, the Supreme Court further explained that a breach of procurement principles would mean a breach of imperative norms, with all consequences deriving from this. Furthermore, Article 5 of the Law on Competition provides that all agreements restricting competition are prohibited, including agreements to directly or indirectly set (fix) prices of certain goods or other conditions of purchase or sale. In case any allegations about probable collusion occur, the Competition Council responds by conducting investigations. The cartel can be prosecuted by the authority and damage claims can be brought by private persons. However, no criminal sanctions are in place for cartel activities. The Council is an independent legal person whose members are appointed by the President, on the recommendation of the Prime Minister, for a term of six years. The Council has the right to oblige violators to cease activities that breach the law and to impose fines. Infringements can result in civil and administrative procedures.

No evidence of collusion in defence bidding was found.

TI Reviewer3937: Public procurement Commissions are organized inside the purchasing organisation and the composition of the Commissions depends on the specifics of the procurement (2). All members of Public Procurement Commission sign impartiality pledges and confidentiality declarations, their role and activities are clearly legally regulated (2). However there is not enough capacity and not enough sources to supervise the implementation of the contracts (4). The amount of training received is unclear.

There is no evidence of undue influence from higher grades in MOD.

RESPONSE TO GOVERNMENT REVIEWER: No publicly available material testifying to training could be found.

TI Reviewer3937: There are mechanisms in place to allow companies to complain about perceived malpractice in procurement; however, in practice, the investigations are not always effective, especially when the case comes to courts (4). The exact mechanisms are foreseen in Law on Public Procurement: companies may complain to the purchasing organisation or the Central Public Procurement Office. If the explanation received does not satisfy the company it may complain to court.

There are no separate provisions prohibiting discrimination of companies that used their right to complain. However there are other safeguards (the prohibition to draft specifications suitable only for provider, to reject the proposal without exhaustive explanation and justifications, etc).

The research conducted in 2008 shows that only 3% of companies complained about the results of public procurements (5). However, according to the 2013 Global Corruption Barometer, 62% of businessmen who participated in public procurement procedures stated they had the impression that the calls were tailored for specific bidders.

TI Reviewer3937: The sanctions are śet out in the Law on Public Procurement in Defence Sector, Administrative Code of Lithuania, and in the Criminal Code for offences with criminal features. The Public Procurement Law provides rules for debarment for, for example, suppliers who have an active record for corruption related crimes ( Art. 33) and provides a list of alternate sanctions that the courts may apply, including fines and reducing the term of the contract (Art. 952).

The Public Procurement Office regularly releases information regarding investigations related to wrongdoing in public procurement. The statistics about the court files and results are provided in its annual reports. However there is no data about such statistics that are specific only to the defence sector.

RESPONSE TO PEER REVIEWER 1:The focus of the question is on the existence and applicability of sanctions. Since there is evidence of robust sanctions and their application, score 4 has been maintained.

TI Reviewer3937: There is no evidence that Lithuania is currently engaged in offset contracts.The Government did require offsets for contracts above 5 million LTL in accordance with the 2003 Resolution No.918; however, this resolution was amended in 2010 and cancelled in 2012 (3). Supporting documents prepared by the Ministry of Economy stated that the European Commission informed the Ministry that offset agreements and Lithuanian legal acts violate the European Union law (4). As European Commission has stated, such contracts &quoute;go against the basic principles of the Treaty, because they discriminate against economic operators, goods and services from other Member States and impede the free movement of goods and services. Since they violate basic rules and principles of primary EU law, the Directive cannot allow, tolerate or regulate them&quoute; (1, 4).

RESPONSE TO PEER REVIEWER 2: The 2003 resolution was amended in 2010 and cancelled in 2012 (see source 3). There is no evidence that offset agreements currently exist. Score N/A maintained.

TI Reviewer3937: There is no evidence that Lithuania is currently engaged in offset contracts.The Government did require offsets for contracts above 5 million LTL in accordance with the 2003 Resolution No.918; however, this resolution was amended in 2010 and cancelled in 2012 (3). Supporting documents prepared by the Ministry of Economy stated that the European Commission informed the Ministry that offset agreements and Lithuanian legal acts violate the European Union law (4). As European Commission has stated, such contracts &quoute;go against the basic principles of the Treaty, because they discriminate against economic operators, goods and services from other Member States and impede the free movement of goods and services. Since they violate basic rules and principles of primary EU law, the Directive cannot allow, tolerate or regulate them&quoute; (1, 4).

RESPONSE TO PEER REVIEWER 2: The 2003 resolution was amended in 2010 and cancelled in 2012 (see source 3). There is no evidence that offset agreements currently exist. Score N/A maintained.

TI Reviewer3937: There is no evidence that Lithuania is currently engaged in offset contracts.The Government did require offsets for contracts above 5 million LTL in accordance with the 2003 Resolution No.918; however, this resolution was amended in 2010 and cancelled in 2012 (3). Supporting documents prepared by the Ministry of Economy stated that the European Commission informed the Ministry that offset agreements and Lithuanian legal acts violate the European Union law (4). As European Commission has stated, such contracts &quoute;go against the basic principles of the Treaty, because they discriminate against economic operators, goods and services from other Member States and impede the free movement of goods and services. Since they violate basic rules and principles of primary EU law, the Directive cannot allow, tolerate or regulate them&quoute; (1, 4).

RESPONSE TO PEER REVIEWER 2: The 2003 resolution was amended in 2010 and cancelled in 2012 (see source 3). There is no evidence that offset agreements currently exist. Score N/A maintained.

There is no evidence regarding agents and intermediaries used in the procurement cycle (although their activities are regulated by law). Regulations do, however, exist regarding agents used in export and import of weapons. Export, import, transit or brokering of military equipment is subject to a licence for export, import, transit or brokering. These licences are issued by the Ministry of Economy. The procedure for issuing export licences for dual-use items and licences for brokering services, suspending such licences, lifting suspension of the licences and revoking the licences is laid down by the Government or an institution authorised by it (3).

Licences are not issued if there is a court judgment and unspent or unexpunged conviction in respect of the crimes against humanity and war crimes, criminal acts against the independence, territorial integrity and constitutional order of the State of Lithuania, public security, property, property rights and property interests, the economy and business practice, the financial system and government order as committed by the exporter, importer, supplier, recipient or broker. Or if the the exporter, importer, supplier, recipient or broker of strategic goods has supplied misleading information or false data (3).

However if a person who undertakes economic, commercial, financial or professional activities without holding a licence to engage in the activities for which it is required, he/she/it might be punished by community service or by a fine or by restriction of liberty or by imprisonment for a term of up to four years (4).

RESPONSE TO PEER REVIEWER 1: Score lowered to 2. While the score probably lies between 1 and 2, score 1 is not suitable as there is no data that control mechanisms would be only frequently enforced effectively, or would be not obeyed at all, and there is no evidence of agents being used in the procurement cycle.

Information provided publicly prior to the signing of contracts includes the type of procurement, the object and the duration of the contract, and basic financial information. Specifications and contract details are not provided publicly.

Requirements pertaining to subsidiaries and sub-contractors' duty to adopt compliance programmes are not set by law and it is up to the purchasing organisations to decide whether they want to include them. However, there is no evidence that such practices are followed; this was confirmed by all Interviewees.

TI Reviewer3937: According to interviewees, some purchases may be concluded under political pressure, but it comes from the local government, not seller countries. Interviewees suggested that there were cases when buying certain equipment was on the agenda although it was not recommended and planned by military forces.
What is more, according to the interviewees, the content of the National Defence and Security Strategy is so broad that all procurement requirements fall under it. For instance, the strategy states that the main defence interests and priorities are as follows: security in Lithuania, NATO and EU, democracy, human rights in Lithuania and neighbouring countries, stability, satisfying security resources and finances, information security, etc. There are no rationales within the publicly available procurement documents that would provide the justification for why the particular pieces of equipment are necessary. These gaps mean that some risk of seller influence does exist.

The National Audit Office annually carries out financial reports of the MOD and Lithuanian armed forces and analyzes the expenses for catering, arms, real estate, salaries and etc. These audits are available online (1) and there is evidence that after such audits the MOD starts internal investigations. (3)