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Monday 21.05.2018 | Name days: Ingmārs, Ernestīne, Akvelīna
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BNN summary of the week: Latvia’s problem with old politicians and FinCEN goals

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUBNN offers a summary of this week’s topical news in a variety of categories: Change; Growth; Business; Justice; Opinion; Fight; Future.

CHANGE: Latvian Saeima establishes ban for banks to service shell companies

Banks registered in Latvia will no longer be allowed to work with shell companies and service their accounts. This is provided by amendments to the Law on the Prevention of Money Laundering and Terrorism Financing approved by the Saeima on Thursday, 26 April, as confirmed by the parliament’s press-service.

«Amendments were proposed to prevent the possibility of Latvia’s financial system being used to launder illegally acquired funds. The ban will apply to credit institutions because turnover of shell companies forms a considerable portion of banks’ serviced accounts,» as noted by Finance Ministry.

The ban will also apply to payment processing institutions, electronic money institutions, deposit broker associations and private deposit portfolio management companies.

In accordance with the law, shell companies are ones that cannot prove their economic activities and are registered in countries that do not require submission of financial accounts. Shell companies have one other characteristic – they do not have an actual location where they are supposed to perform their business activities, the Saeima reports.

Full article here

GROWTH: Supreme Court of Justice views Kristovskis’ claim against Ventspils City Council

On 25 April, the Administrative Cases Department of the Supreme Court of Justice will be viewing two claims submitted by Ventspils City Council deputy Ģirts Valdis Kristovskis against the city council. «The fact that the case will be viewed verbally and that the defendants include Ventspils City Council, EPRDM and Association of Local Governments is considered unique and unprecedented in Latvia’s court practice,» says Kristovskis.

As it is known, Kristovskis has turned with a claim to court because he believes the management of Ventspils municipality refused to provide him with requested documents that govern the city council’s work in spite of multiple repeated requests. The city council’s management also refused to publish this information on the official ventspils.lv portal. Because the Environment Protection and Regional Development Ministry refused to evaluate Ventspils City Council’s illegal activities and put an end, this matter has been delegated to the court.

«By accepting the claim and added evidence, the Supreme Court confirmed that it admits there is a lack of an effective rights-protection mechanism for situation when the rights and duties of minority deputies are limited by the majority deputies and management of municipal administrations, as it happens in Ventspils City Council’s case,» says Kristovskis.

Full article here

BUSINESS: Danske Bank to gradually cease servicing Baltic clients

In Baltic States, Danske Bank plans to focus solely on providing support to subsidiaries of Nordic clients, as well as global corporations with a considerable business portion in Nordic countries. Leaving private persons and local businesses servicing sector will be performed in a gradual manner, as reported by acting manager of Danske Bank’s Communication Office in Latvia Zane Strade.

She notes: «This means Danske Bank will cease opening accounts for new local clients. Existing clients will continue receiving services in accordance with signed contracts. All existing loan and deposit contracts will remain in force. Everyday services will continue being provided until further notice.»

At the same time, she adds that the bank will not expand cooperation with those clients. New loans will not be provided and no new service contracts will be provided to them.

Full article here

JUSTICE: FCMC chief says ABLV Bank’s closure was not the goal of FinCEN report

The report published in February by US Department of Treasury’s Financial Crimes Enforcement Network about ABLV Bank was not prepared with the goal in mind to close the bank, said chief of Latvia’s Finance and Capital Market Commission Pēters Putniņš at a public hearing organized by European Parliament’s TAX3 committee in Brussels.

«We do not know why the US government decided to unveil another report […], but it was not compiled with ABLV Bank’s closure in mind. […] FinCEN had assessed relevant risks for the bank’s survival outside the US dollar zone. There was no intention to kill off this bank with any documents – it was the market’s reaction that did it,» said Putniņš, adding that when the report was being released ABLV Bank was working on preventing different uncovered problems.

Full article here

OPINION: Ex-minister says Latvia’s biggest problem is the older generation of politicians

Older generation of politicians is Latvia’s largest problem. Some of those people are due for retirement. This is why the main objective for ‘Kustība Par!’ is involving a new generation of young and perspective politicians, says the party’s leader Daniels Pavļuts.

This year’s Saeima elections, according to him, will not have the usual choice between the left and the right or between conservatives or liberals. He says the «choice will be for a better tomorrow made yesterday».

«We are a modern, young and well-educated people that think about the future. Many of us have children and we think about their and Latvia’s future. People do not think in two or four-year election cycles. We look towards the far future,» Pavļuts says.

According to him, there isn’t a single truly right-wing party in Latvia. «Latvia has had more of an unclear centrist policy over the years. Unity has a very unclear place in the political spectrum. Lately Unity has been experiencing internal stress associated with a desire to attract nationally-thinking voters. This is why the party has performed leans towards national conservatism. I no longer see anything right-wing or centrist left in this party.»

Full article here

FIGHT: «Oligarch talks» publication law put on hold; will fabricated «risks» impact UGF?

On Tuesday, 25 April, Saeima’s Legal Affairs Committee decided against putting up for a vote the legislative draft for the digitization and publication of the declassified portion of materials from the so-called oligarch talks criminal case.

At the same time, the committee decided to ask Justice Ministry’s work group to evaluate and offer solutions that would permit society, including mass media representatives to access materials from the criminal case.

With that, the majority of members of the Legal Affairs Committee decided not to vote on the legislative draft that would have allowed journalists to access materials of the scandalous criminal case and publish them for all to read. The legislative draft was submitted for discussion in the parliament was submitted by Unity’s Saeima faction and Latvian Association of Regions.

Unity faction deputy Andrejs Judins proposed voting on the legislative draft today. The majority of members of the committee, however, did not support his proposal.

Judins wrote on his Twitter account: «The real goal is not ‘slowing it’ – the goal is preventing amendments from being adopted».

He added: «[Gundars] Daudze was visibly nervous during the meeting. He was worried publication of oligarch talks could affect the election process. He is well aware that if truth comes to light, UGF’s image would suffer.»

Full article here

FUTURE: Norway interested in developing cooperation with Latvia in tourism industry

«Latvia welcomes successful regional and economic cooperation with Norway. Our countries have common values and goals – developing Baltic and Nordic countries as a wealthy and secure European region,» said Latvia’s Economy Minister Arvils Ašeradens during his meeting with Norwegian State Secretary for Trade, Industry and Fisheries Roy Angelvik.

During this meeting, Latvia’s minister and his Norwegian colleague discussed mutual economic cooperation matters, as well as opportunities for expanded cooperation, as BNN was informed by Economy Ministry.

Angelvik and Ašeradens both said that their countries find it important to develop cooperation in start-up and innovations industry. At the same time, the two sides mentioned they are interested in developing cooperation in education by creating study programmes and student exchange events.

Ašeradens also said he is satisfied with the level of cooperation between Latvia and Norway on a regional level, adding that it is necessary to aim towards tighter regional integration of Baltic and Nordic States, especially in the field of energy, innovation, construction and green technologies. At the same time, the minister voiced satisfaction for Norway’s contribution to increasing security in the Baltic Region, the ministry notes.

Full article here


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Riga City Council changes internal rules again; each deputy given ten-minute limit for questions

On Monday, 21 May, Riga City Council changed its rules for Q&A sessions, providing a ten-minute limit for each deputy to ask questions. This is the third time the city council has changed its internal rules.

Committee head: EU funds would help secure meaningful education for youngsters

«Seven to eight thousand youngsters leave Latvia every year. While ten years ago 13 to 25 year old youngsters formed 20% of the country’s population, their proportion dropped to 13% in 2017,» says Saeima’s European Affairs Committee chairperson Lolita Čigāne.

River Emajõgi guarded by mass protest against pulp mill

In Tartu, human chain has been formed by about 4 500 people in protest against the plan to build a billion-euro pulp factory near the River Emajõgi, the organisers of the event have stated.

Association: loan repayment indexes improve in non-bank consumption loan segment

In 2017, members of Latvian Association of Alternative Financial Services issued in loans EUR 180.5 million. Compared to 2016, this is an increase of 6.9%. Members’ credit portfolio was EUR 88.7 million at the end of 2017, which is 8.1% more than a year ago.

Estonian producer prices higher by 2.1 on year, due to energy supplies

Estonian producer price index of industrial output increased by 2.1% between April 2017 and April this year, Estonian statisticians have estimated.

Vitol: limitation of shell companies’ activities cannot possibly affect transit companies

Changes to the law that provide restrictions for shell companies cannot possibly affect transit companies. Because of that, claims voiced prior to adoption of said amendments and their possible impact on transit sector seem rather confusing, says Vitol Baltic chairman Robert Kirkup.

De Facto: Latvian minister’s business partner manufactures ships for Russian army

Latvian Agriculture Minister Jānis Dūklavs’ business partner in Piebalgas alus brewery – Russian businessman Igor Shekhelev – manufactures ships for the Russian army, as reported by De Facto programme of LTV.

Property-sharing site Airbnb agrees to share owner income with tax authority

The home-renting service Airbnb has agreed to automatically report homeowners' income to tax authorities in Denmark in a landmark agreement, which is expected to make it easier to detect tax evasion by homeowners, who are renting out rooms and houses on the website.

Latvia shipped 11.7% more oil products in Q1 2018

As part of the postponed excise tax payment regime, the volume of oil products shipped from Latvia in Q1 2018 was 13,869 or 11.7% larger than the one recorded in the same period of 2017, according to data compiled by the State Revenue Service.

What have Italian makers of government agreed on?

In Italy, the two populist parties preparing form a national government have published joint policies including tax cuts, a guaranteed basic income for the poor and deportations of 500,000 migrants.

Thunderstorms expected in Latvia this week as well

On Monday, 21 May, weather in Latvia will not change much – dry and not cloudy for the most part. On Tuesday and Wednesday, however, precipitation areas will pass through Latvia, bringing heavy rainfall, thunderstorms and strong wind, as reported by Latvia’s Environment, Geology and Meteorology Centre.

Week in Lithuania. Liberal Movement to turn to court over VSD statements

The board of Lithuania's Liberal Movement has decided to turn to court over information published by the State Security Department, allegedly damaging the party's reputation.

BNN summary of the week: distorted state administration, Liepājas metalurgs recovery, and Latvia unemployment level

BNN offers a summary of this week’s topical news in a variety of categories: Change; Growth; Business; Fight; Future; Opinion

New approach to combating drunk drivers – forced correction programme

Latvia’s Justice Ministry reports that the administrative penalties reform proposes introducing stricter punishments for drunk drivers. If a person is caught drunk driving, their license would be confiscated. On top of that, to recover the license, that person would have to pass a social correction programme.

Latvian MEP to «cause a scandal» where he can to stop school reform

Members of the European Parliament Andrejs Mamikins and Miroslavs Mitrofanovs have gathered support from 114 of their fellow MEPs to request the Latvian government and Saeima to review the already approved amendments to the Education Law and General Education Law that govern realization of the national minorities’ school reform, as confirmed by Mamikins.

Germany criticises U.S. attempts to block Nord Stream 2 gas pipeline

As to the controversial Nord Stram 2 Russian gas pipeline via Baltic sea to Germany, the German Economy has evaluated that American attempts to block it could be aimed at increasing U.S. a planned Russia-Germany gas pipeline to increase its own energy exports.

Number of complaints about taxi services at Riga International Airport on a rise

The number of complaints about taxi services at Riga International Airport continues to increase, said the airport’s board chairperson Ilona Līce in an interview to 900 seconds programme of LNT.

Ryanair sees Estonia as important market, considers local hub option

Irish low-fare airline Ryanair considers Estonia an important market, the firm's chief executive Michael O'Leary noted while visiting Tallinn earlier in the week.

Minister: UN should act to call violators of international law to justice

«The United Nation Security Council, as the main institution maintaining peace and security, has a special responsibility, because its activities affect compliance with international law,» says Latvia’s Foreign Affairs Minister Edgars Rinkēvičs.

Banks to report private persons whose account turnover exceeds EUR 15,000

From 18 May onward, banks will have to report private persons whose annual account turnover exceeds EUR 15,000, as provided by the Cabinet of Ministers’ supported order, under which the State Revenue Service is to be provided with information about a private person’s turnover and balance.

Baltic States request expanding NATO’s battalion with air and naval forces

Baltic States plan to request expanding international NATO battalion with air and naval forces, as confirmed by Lithuanian Foreign Affairs Minister Lino Linkevičiaus, who met with US President’s National Security Advisor John R. Bolton in Washington alongside his Latvian and Estonian colleagues.

Poland uncovers Russian hybrid war networks

Poland has detained a Russian national suspected of working with accomplices to stimulate social tension with neighbouring Ukraine and neutralised two Russian hybrid war networks, the Polish Internal Security agency has stated.

Weather in Latvia to remain moderately warm in Latvia; precipitation to be low

On Friday, 18 May, some areas of Latvia will experience thunderstorms. However, starting from the end of the week, weather will become dry again with little precipitation. Rain cloud will form above Latvia in the second half of the week, as reported by Latvian Environment, Geology and Meteorology Centre.

Construction output rise in Latvia was more rapid than EU’s average level in Q4 2017

Compared to last year’s October-December, Latvia’s construction output in Q4 2017 grew 19.9%, which is a much more rapid rise than the average in the European Union, according to data published by Eurostat on Thursday, 17 May.

Latvian Saeima’s committee does not support Kušners’ re-approval in Bank of Latvia council

On Thursday, 17 May, Saeima’s Budget and Finance Committee decided not to recommend Edvards Kušners for a repeated term in the council of the Bank of Latvia.