History

History of Lithuanian Customs

Since the oldest times to 1919

The beginning of the Lithuanian Customs dates back to the 11th-13th century and is closely related to the development of the Lithuanian state. After the formation of the Grand Duchy of Lithuania, the trade with the countries of Western Europe started to increase, quite an intensive trade with the Slavs took place. Customs houses began to be gradually established at the border of the Grand Duchy, the capacity of customs offices was set up, customs duties were collected from the traders crossing the border. 

By the middle of the 15th century, in the reign of Vytautas, the Grand Duke of Lithuania, customs duties, their tariffs and ways of collection were developing. In the 15th century, Vytautas centralized the management of customs houses. It is considered that the system of customs houses was completely developed in Lithuania in the beginning of the 16th century.

Customs houses flourished in Lithuania until the 17th century, and later their role gradually reduced. In 1795, after Lithuania was annexed to the Russian Empire, the customs houses were placed at the disposal of Russia. The laws of the Russian Customs were followed by the customs houses in Lithuania and they operated in that way until the very 1914. After the beginning of the First World War, the customs houses within our country found themselves beyond the front line and, having lost the opportunity to carry out their functions, discontinued their operation.

1919–1940

The beginning of the Lithuanian history in the 20th century is considered to be 16 February 1918, when the independence of Lithuania was proclaimed. Lithuania building up as a state could not exist successfully without management institutions, customs houses among them, since the state frontiers had to be controlled, measures to prevent from exporting foodstuff out of the country and to prohibit the entry of persons hostile to the independence of Lithuania had to be taken.

The Customs Department at the Ministry of Trade and Industry, having started to function in the early 1919, was responsible for developing the system of customs houses. The first head of the Customs Department was Oskaras Baldamus.

The first seven Lithuanian customs houses (Virbalis, Jurbarkas, Tauragė, Kretinga, Naumiestis, Naujamiestis, Pilypavas and Račkai) as well as 13 crossing points were established at the German border in 1919. 

After the first customs houses were established, it became necessary to adopt a document regulating their activity. The increasing volumes of trade also required to prepare the document determining customs tariffs for imported and exported goods. On 8 May 1919, "Provisional Bylaws of Lithuanian Customs Houses" and "Provisional Tariffs of Lithuanian Customs Houses", signed by Prezident A. Smetona, Prime Minister A. Sleževičiaus and Minister of Industry and Trade J. Šimkus, came into force. This day is considered to be the beginning of the legal functioning of the Lithuanian customs houses.

The establishment of 21 crossing point and customs houses of the 1^st and 2^nd categories were provided for in the Provisional Bylaws.

Customs houses were established at the frontier with Germany and Latvia as well as frontier with the Klaipėda district, which did not belong to Lithuania until 1923. There were no customs houses at the frontier with Poland, since Lithuania did not recognise the unilaterally designated border and called it only the line of demarcation.

The entire system of customs houses was approved on 14 May 1920 by the law signed by President A. Smetona and Prime Minister E. Galvanauskas. Over 300 officials and employees worked at that time within the whole Customs system. The number of officials working with the customs houses had settled: about 20 persons worked in the 1^st category customs houses, about 10 persons - in the 2^nd category customs houses, 4 persons - in the crossing points. Virbalis customs house at that time was the biggest one. Over 60 persons worked there. 

At the end of 1922, 17 customs houses and 20 crossing points operated in Lithuania.

In 1923, when Klaipėda district was annexed to Lithuania, important changes were brought in the area of the Lithuanian Customs: the network of customs houses increased in 9 more customs houses and 11 crossing points in that district. In total, 700 people worked within the system at that time. 

In 1924, the first congress of the heads of all Lithuanian customs houses was held in Kaunas, where the development of the customs houses, works accomplished by them in six years were reviewed.

The congress paid particular attention to an important customs document, i.e. new permanent Customs Bylaws adopted by the Lithuanian Seimas in April 1924. The Lithuanian Customs followed this document, which was amended and supplemented 18 times, until its revocation in 1940. 

Customs duties comprised about 20 percent of the budged revenue of independent Lithuania. Before the economic crisis in the third decade, which shocked the world and made impact on Lithuania as well, the revenue of customs houses increased every year: almost 51 mil. Litas in 1925, about 59 Lt in 1928. The greatest amount of customs duties, over 73 mil. Litas, was collected in 1931. The greatest part of customs revenue, about 94 percent, comprised customs duties for imported goods.

The problem of contraband was quite a painful issue in Lithuania at that time. Special points for pursuit of smuggling were established in Ukmergė and Alytus. Fines and arrest or imprisonment could be imposed for smuggling. Having disclosed that a person falsified customs seals, stamps or stickers affixed to goods, the imprisonment (penitentiary up to 5 years) was provided for by the law.

The year of 1927 is known in the history of the Lithuanian Customs as the year when all Lithuanian customs officials started to wear uniforms for the first time. In 1936, the provision laying down that all employees of customs houses must wear uniforms was entered in the Bylaws of Customs Houses.

Within almost 20 years, activities of customs houses continuously improved, became more and more efficient. In March 1938, the first Ultimatum, i.e. Ultimatum of Poland, requiring to establish diplomatic relations and threatening with an armed attack, was issued to Lithuania. The establishment of relations enabled to create new customs offices at the border with Poland.

In March 1939, the Ultimatum, demanding Klaipėda district, was delivered to Lithuania by Germany. After the acceptance of this Ultimatum by the Government of Lithuania, the Germans started to occupy immediately state institutions, port, border police posts, customs houses.

At the end of the year, Vilnius and Vilnius district were returned back to Lithuania and the need to establish customs houses at the border with the Soviet Union emerged. For this purpose, a new system of customs houses was created in 1940, however, it was not destined to function. In June, Lithuania was occupied by the Soviet Army, and, thus, the destruction of the entire efficiently working system was started. Soviet Customs laws came into force within the country and the greatest part of the customs houses of independent Lithuania terminated their operation.

Since 1990 to the present days

On 11 March 1990, Lithuania proclaimed to the world that it was re-establishing its sovereignty. It was very important to the country which regained its independence to show to the world that it had state borders with the neighbouring countries and protected them, and that economic protection of the state borders was built upon its sovereignty and institution symbolising it, i.e. the Customs.

On 9 October 1990, the Supreme Council of the Republic of Lithuania – Reconstituent Seimas adopted the Temporary Law on Customs. Two days later, the Customs Department was established by Resolution of the Government of the Republic of Lithuania. This was the beginning of the activities of the re-established independent Lithuanian Customs. That autumn, 30 employees started to work with the Customs Department. The same year, the first seven customs houses, i.e. Vilnius, Lazdijai, Varėna, Skuodas, Zarasai, Šalčininkai and Joniškis, started to operate.

The re-establishment of the Lithuanian Customs took place under very difficult circumstances. These were troublous times, full of dangers to Lithuania and, in particular, to the officers working on the border. Lithuanian customs offices suffered numerous attacks by hostile Soviet armed forces and Soviet military troops (OMON). They ravaged, fired constructors` coaches which were the only work facilities of customs posts at that time, terrorized both psychologically and physically officials working therein. Saločiai, Smėlynės, Šalčininkai, Lavoriškės, Medininkai posts were terrorised most often, about thirty customs officials suffered from attacks. 

On 31 July 1991, Lithuania was shocked by a severe tragedy: OMON forces attacked Medininkai post, ten officials working therein, i.e. customs inspectors Antanas Musteikis, Stanislovas Orlavičius, Ričardas Rabavičius and four of their brothers in arms, policemen on duty at the post, were brutally murdered. Only customs inspector Tomas Šernas survived.

Pressure at the Lithuanian border was kept not only by often attacks, but also by the presence of two Customs services at the border, as the Customs of the Soviet Union was operating in Lithuania until the very collapse of the August abortive coup in Moscow. Only on 26 August 1991, their activities were discontinued and functions were transferred to the Customs Department. In the same year, the emblem of the Customs of the Republic of Lithuania and the uniform of customs officials were approved.

At that time, the main tasks and functions of the young Lithuanian authorities were to enforce the laws determining customs policy, apply customs tariffs and collect customs charges, prevent smuggling and other violations of customs rules. Legal basis and material facilities as well as properly qualified staff were necessary for the said purposes. This problem was started to be solved in 1992, when the Customs School was opened (in 2001 it was reorganised into the Customs Training Centre). 

1993 was very important to the development of Customs, when the Customs legal basis was strengthened by the Customs Law and Tariff Law of the Republic of Lithuania replacing the provisional legal acts, regulation of foreign trade by means of customs tariff was started in the middle of that year.

At that time, the Lithuanian Customs started to apply the provisions of some international conventions, treaties and agreements. Customs procedures, customs control, payment of taxes, application of guaranties were regulated, the first customs warehouses were registered, customs brokers started their operation. In 1993, the first Statute of Service with the Lithuanian Customs (new revision came into force in June 2003) and customs rules were approved, the same year the Customs Department of the Republic of Lithuania was reorganised into the Customs Department under the Ministry of Finance pursuant to the Government Resolution.

One of more significant changes of customs activity was the reorganisation of customs system made in 1996. The number of 14 operating customs offices was reduced to 10 territorial customs offices, their activity zones were defined, 74 posts and their units were established.

Continuously developing and growing modern customs authority, improving qualification of customs officials made a positive impact on the state budget. Customs revenue increased every year: the Lithuanian Customs collected 9,9 mil. Litas of customs duties and taxes in 1992, 573,4 mil. Litas in 1994, 2 bn. 904 mil. Litas in 1997, 3 bn. 432 mil. Litas in 2003.

The Customs activity is inseparable from the fight against smuggling. On 1 January 2002, the Customs Criminal Service was established at the Lithuanian Customs. One of its main functions was to detain goods attempted to be brought illegally into Lithuania and to protect in this way the internal market of the European Union.

After the restoration of independence, Lithuania not only established and strengthened state institutions, but shortly started getting prepared for a new challenge: integration into the European Union.

The main element of the EU common market is the Customs Union based on the free movement of goods, persons, services and capital. In the Customs Union, all customs duties among the EU member states are eliminated, and the common foreign trade and Customs policy is implemented with the third countries outside the EU.

Therefore, particularly significant works had to be accomplished by the Customs on Lithuania’s preparation for the EU membership. Administrative structure had to be reorganised, information systems interfaced with the EU information systems had to be introduced, posts on the future external EU border had to be modernised, legal acts complying with the EU legal provisions had to be prepared, etc.

The Customs Code of the Republic of Lithuania adopted by Seimas in 1996, prepared according to the provisions of the Community Customs Code and main international Conventions regulating Customs activities has formed a stable legal basis for the functioning of the Customs system. The Customs has been following it since 1998 to 1 May 2004, when, upon joining the EU, its activities have been started to be regulated by the Community Customs Code.

On Lithuania’s preparation for the EU membership, international co-operation in Customs matters was of particular importance. The possibility to develop international relations appeared already in 1992, when Lithuania became the member of the Customs Co-operation Council (present World Customs Organisation) that makes great influence on the Customs policy of the European Union.

Involvement in the activities of this Organization was one of the most important steps after which the Lithuanian Customs started to participate actively in all most important events of the world Customs community. It should be noted that the World Customs Organisation arranged a regional Customs conference in Vilnius, May 2003, with the participation of Michel Danet, WCO Secretary General.

The Lithuanian Customs, having started its activities on the border in the temporary constructors` coaches, presently due to international support has several well equipped modern customs posts. These are Medininkai and Šalčininkai road posts on the border with Byelorussia, Nida road post and Panemunė road post opened this spring on the border with Kaliningrad region (Russia).

One of the most important dates to Lithuania and its Customs is 28 November 2001, when the EU-Lithuanian negotiations on the chapter "Customs Union" were finalised in Brussels. Thus, the Lithuania’s readiness to implement Community legislation regulating Customs activities was recognised officially.

Successful integration into the European Customs family would not be possible without creating the integral Customs Information System. Upon creating the Informatics Division at the Customs Department, the Customs Information System was started to be developed.

In 2001, the Customs Information Systems Centre was established. The previous year, the automated system for customs data processing ASYCUDA, electronic declaration system allowing operators to present import and export declarations electronically; New Computerised Transit System (NCTS); other systems ensuring more rapid movement of cargoes and better control of trade with the third countries were introduced.

On preparation for the successful Lithuania’s accession to the European Union, 10 territorial customs houses were reorganised on 1 July 2002 into 5, operating in the biggest towns of Lithuania: Vilnius, Kaunas, Klaipėda, Šiauliai and Panevėžys.