Currently, the requirement to possess sufficient means of subsistence for the duration of one’s stay in Lithuania is only very formally implemented
The ‘Law on the Legal Status of Foreigners’ in many cases requires persons who arrives into Lithuania must possess sufficient means of subsistence for the duration of their stay in Lithuania.
This is common practice throughout the European Union and also globally. The requirement allows states to protect themselves from additional burdens, as well as to reduce the risk that non-working migrants will pursue income-generating activities which are not always legitimate.
However, in Lithuania, the requirement to ensure a means of subsistence is treated in a purely formal way. A bank statement is considered sufficient ‘proof’ of the availability of funds or, in some cases, logging into online banking and showing one’s funds in person to a migration department official is considered to be sufficient.
The problem
This formal approach creates ample scope for abuse. Bank statements are often outdated and unrealistic, money in the account may not even be the visa applicant’s property, and is returned to the owner immediately after the proof is provided. Another popular method is the act of obtaining short term credit and returning it to the credit institution immediately after providing proof of means of subsistence.
These and similar methods are used to grant people a residence permit in Lithuania even though they do not have sufficient funds.
Alternatives
Western European countries such as Germany and France have implemented a requirement for subsistence funds to be deposited into specific ‘blocked’ accounts rather than standard current accounts in order to prevent abuse. Payments from such accounts are restricted to periodic disbursements, typically a monthly allowance which is sufficient for the relevant period of one’s stay. This approach ensures that individuals have the means to support themselves throughout their residency.
As immigration flows increase, it seems inevitable that similar requirements will be required to be introduced in Lithuania.
Financial products
Transitioning from a formal requirement to a more stringent requirement for subsistence would necessitate the development of new financial tools. Lithuanian financial institutions do not currently offer ‘blocked’ accounts or equivalent products. There is no doubt that the dynamic market for financial services will react quickly to the new requirements, but it must also prepare in advance for such changes. This also applies to the regulator, ie. the Bank of Lithuania, which would have responsibility for providing controls for the financial service and would also have to set out eligibility and availability criteria.