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Tuesday 19.06.2018 | Name days: Nils, Viktors

BNN summary of the week: minister threatened with dismissal; ABLV Bank scandal

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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; Fight; Court; Problem; Decline; Commentary; Future; Proposal

CHANGE: Entrepreneur: many small and medium-sized businesses could drown in stagnation this year

2018 will be very intense for Latvia’s economy. It is predicted that thanks to exports and European Union funds, money will slow into the country, unemployment will decline and wages will grow. Predictions seem rather positive. However, the picture will likely be rather different for small and medium-sized businesses, says Turība University’s Business Management faculty dean, businesswoman and board member of SIA Sky Port Zane Driņķe.

Small and medium-sized businesses’ dynamics not expected to experience major fluctuations in 2018

The expert notes that medium-sized businessmen, looking at the current situation in the country’s economy, may become curious as to where positive predictions may come from.

She says that there are several aspects to consider – the number of active small and medium-sized companies has been growing lately, especially in production sectors. The number of newly-founded businesses has been growing steadily since 2003. This trend will continue in 2018.

Full article here

FIGHT: Economy Minister asked to fix increasing electricity bills; parties threaten with dismissal

Latvian Economy Minister Arvils Ašeradens has to fix the mistakes that have caused electricity bills to increase, said chairman of Free Trade Union Confederation of Latvia Egils Baldzēns in an interview to 900 seconds programme of LNT.

He believes the government should give in to the needs of households and farmers, as well as electricity consumers with a seasonal electricity consumption, to make the fee for connection that remains unused no higher than a couple of euros.

Baldzēns adds that the trade union does not intend to request the minister’s dismissal, because the goal is not punishing someone. Everything depends on how well or poorly mistakes are fixed.

Latvian Association of Regions (LAR) asks Economy Minister Arvils Ašeradens to resolve the situation with unjustifiably high electricity bills within two weeks. If nothing is done, ten members of LAR intend to request the minister’s dismissal at the 1 March meeting of the Saeima.

Full article here

COURT: Lembergs once again rejects court composition in his criminal case

Ventspils Mayor Aivars Lembergs, who is accused of serious crimes, rejected the composition of the court on Monday, 12 February. He said that judges are unable to provide an objective and fair viewing of the criminal case.

Lembergs claims his fundamental rights were breached during the viewing of the criminal case. This includes, according to him, his participation in inspection of each piece of evidence was not allowed, and that he was not provided with sufficient information regarding the charges presented to him.

In his statement, Lembergs referenced several court hearings that have taken place so far. He mostly focused on cases when the court declined questions raised by the defence.

Full article here

PROBLEM: sex clients sustain prostitution network in Latvia

Prostitution in Latvia is legal. Nearly anyone can be a sexual thrill-seeker or sex client and remain unpunished. Women who were forced into the life of prostitutes, on the other hand, are the ones who pay the price.

BNN spoke with MARTA Centre’s legal expert Zane Zvirgzdiņa to learn of the tricks and schemes recruiters use to lure women to live as prostitutes and what legalization aspect means for Latvia.

Prostitution is legal in Latvia

The lawyer explains that Prostitution Restriction Regulations are in force in Latvia. Those regulations were developed by the Cabinet of Ministers. Regulations do not prohibit prostitution as a whole. Instead the document introduces certain restrictions. «With that, as far as the state is concerned – prostitution is legal. Otherwise there would be no need to introduce restrictions,» explains MARTA Centre’s lawyer.

Have you ever dreamed of becoming a prostitute?

If prostitution is a legal service, one might ask ironically if prostitutes pay taxes and if they are registered as ‘self-employed’. When asked, the lawyer said no – prostitutes do not pay taxes. «The moment the state starts collecting taxes from prostitution, the state becomes a pimp, because the budget would thereby benefit from prostitution,» says lawyer Zvirgzdiņa, adding that prostitution itself is not illegal. Nevertheless, there are specific restrictions put in place by the Cabinet of Ministers.

«If we look at prostitution as a system, we have to understand that there are people involved in prostitution and sex clients. Without the latter, the system would not exist. The real situation is that as long as there is demand, there will be supply. One major problem in Latvia is that no one punishes sex clients,» says the legal expert of MARTA Centre.

The centre’s representative refrains from calling it a profession, backing her views with a rhetorical question: «Have you ever dreamed of becoming a prostitute when you were a child? Has any person ever said they would like their children to pick up this profession? Let’s not forget about the kinds of psychological and physical consequences this kind of activity can bring.»

Full article here

DECLINE: ABLV Bank was used to bribe and influence officials

Until 2017, the management of ABLV Bank had been using bribes to influence officials in Latvia to prevent legal measures and reduce threats to its high-risk activities, as mentioned in the statement released by US Finance Ministry’s Financial Crimes Enforcement Network (FinCEN).

FinCEN notes that the business practice employed by ABLV Bank ensures provision of financial services to clients who wish to avoid attention from regulators. The bank’s management and employees are also guilty of their clients’ illegal financial activities, including money laundering and using proxy companies to hide the identities of the true recipients of the bank’s illegal services.

ABLV Bank is considered creative and groundbreaking when it comes to the approach used to circumvent requirements of financial systems, as detailed in the report. The bank constantly improves money laundering methods and circumvention of regulations and ensures forged documents support the financial system. Some of the forgeries produced by the bank’s employees are of high quality.

Full article here

COMMENTARY: RB Rail CEO says interference «from above» has been in line with the law so far

We have seen interference «from above» in RB Rail’s activities. The law was not breached, however. With that, there was no need to report anything to law enforcement institutions, RB Rail CEO Baiba Rubesa told Ir magazine.

She says it is far more important to resolve matters, not «publicly shout in every direction». Rubesa says she did not turn to the police all this time because the law was never breached. «Nothing has been breached so far, and no one has threatened me with death.»

Rubesa admits that there are powers that want to delay the project’s realization. However, such a situation is common for all cross-border projects.

At the same time, she explains that cooperation has been good with both RB Rail council members from Latvia – Edvīns Bērziņš and Vineta Rudzīte. «We sometimes have disagreements, but we are nonetheless able to resolve matters together,» said RB Rail CEO.

She adds that there has been no opposition from Transport Ministry’s state secretary Kaspars Ozoliņš. «We can definitely thank Prime Minister Māris Kučinskis, because he backs the company in word and action,» said Rubesa.

RB Rail CEO, whose term ends in October, is certain that if she is dismissed the next head of the company will not be from Latvia. According to her, representatives of other Baltic States have zero interest in having a joint company. «They want 20 people obedient people, not a strong and capable team that would perform all work within five years,» Rubesa said in an interview.

Full article here

FUTURE: Czech Republic and Slovakia may add to NATO’s battalion in Latvia this summer

The Czech Republic and Slovakia may add to the NATO battalion stationed in Latvia at the beginning of summer 2018, as confirmed by Latvian Defence Minister Raimonds Bergmanis.

The minister said that Czech and Slovak troops will expand the combat group, not replace any of the represented countries.

He refrained from mentioning any precise number of troops, saying that this matter is for the aforementioned countries to clarify.

During his visit to Brussels, Bergmanis participated in a meeting of NATO Defence Ministers and the dialogue organized by Canadian Minister of National Defence Harjit Sajjan for member states of the expanded NATO combat group in Latvia.

Aside from Canada and Latvia, this meeting was also attended by Albania, Italy, Spain, Slovenia, Poland, Czech Republic and Slovakia. The sides discussed the presence of the multi-national battalion in Latvia and future steps in strengthening combat capabilities.

Full article here

PROPOSAL: Latvia ought to increase productivity to sustain predicted economic growth rate

Latvia’s Fiscal Discipline Council has approved Finance Ministry’s macroeconomic outlook for 2018-2021. This document will be used by the government as the foundation for consultations with European Commission to establish next year’s budget estimates, BNN was informed by the council.

The council views the ministry’s macroeconomic outlook as realistic. Nevertheless, there are concerns about the economic growth potential – it could turn out weaker than the ministry expects. This means economic growth may become slower and there may be less money to spend.

«Currently Latvia’s economy is growing rapidly. Nevertheless, it is necessary to follow development of the situation very carefully to make sure this rapid growth does not cause an overheating,» says Fiscal Discipline Council’s Chairman Jānis Platais. «This trend would be undesirable, because it could cause macroeconomic instability and worsen the country’s financial state in a long-term perspective the same way we witnessed it during the economic crisis.»

Finance Ministry’s developed outlook for macroeconomic indexes for the period until 2021 shows that actual GDP growth will be 4% this year and close to 3% in the next couple of years. Inflation, on the other hand, may grow more rapidly than expected.

Full article here


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Doctors unjustifiably charged fees for services worth 255,000 last year

Last year, authorities found that medical institutions that provide state budget-financed healthcare services had charged fees for services worth EUR 254,994, according to data compiled by Health Inspectorate.

Budget Committee picks Swedbank economist for Bank of Latvia Council

On Tuesday, 19 June, Saeima’s Budget and Finance Committee unanimously decided to submit to the Saeima a decision project regarding approval of Mārtiņš Kazāks for the post of member of the council of the Bank of Latvia, as confirmed by Saeima’s press-service.

Farmers Saeima proposes declaring state of emergency in Latvia’s agriculture sector

Farmers Saeima association has sent a letter to Latvia’s State Chancellery, Agriculture Ministry, Finance Ministry and Latvian Association of Local and Regional Governments, detailing a request addressed to the Cabinet of Ministers and Saeima to declare a state of emergency in the country’s agriculture sector because of the lasting drought.

IT specialist’s lawyers appeal client's arrest in recent restaurant case

Lawyers of Edgars Štrombergs, who is the accused party in the Vairāk saules restaurant cash register data manipulation case, have appealed the security measure applied to him, as confirmed by sworn attorney Mareks Halturins.

Russian and Belarusian arms control experts hosted by Lithuania

Russian and Belarusian arms control inspectors have been hosted by Lithuania as NATO forces trained across the Baltic states and Poland in exercise Saber Strike 2018.

Latvia’s ports suffer freight volume decline in first five months of 2018

Latvian ports handled 27.072 million tonnes of freight in the first five months of this year, which is 7.5% less when compared to the same period of last year, according to data compiled by Transport Ministry.

Bicycle rickshaws in Tallinn will need safety belts from July

Seeking to regulate the provision of bicycle rickshaw services in the Estonian capital, the Tallinn City Council has is to more particular bicycle rickshaw regulations that would align the services closer to car taxis.

158 election sites to open in Riga during next Saeima elections

A total of 158 election sites are planned to be opened in Riga for this autumn’s Saeima elections, as confirmed by documents prepared by Riga City Council.

30% of Latvian residents are dissatisfied with their family’s financial state

Residents’ overall mood has declined considerably across all survey positions. Residents have become the most negative about Latvia’s economic situation – 31% of them believe it has worsened. When asked to voice their outlooks for Latvia’s economy in a year from now, 17% of respondents said it will have improved, according to results of Baltic International Bank’s latest Latvian Barometer.

Apple fined 5 million euros for customer rights violations in Australia

A court in Australia has ruled that U.S. tech firm Apple has to pay a fine of 5.7 million euros refusing to repair iPhones and iPads that had been serviced by third parties as those actions breached consumer law.

Latvian coalition still torn about attracting highly-qualified guest workers

Because of differences in opinions among ministries, Latvia’s government is unlikely to support and view the proposal to ease the issue of EU blue card to highly-qualified guest workers without appropriate higher education, says Prime Minister Māris Kučinskis.

Corruption watchdog requests criminal prosecution of Bank of Latvia head

Latvia’s Corruption Prevention and Combating Bureau has sent materials of a criminal case to the prosecutor’s office with a request to commence criminal prosecution of Bank of Latvia governor Ilmārs Rimšēvičs and businessman Māris Martinsons.

Riga City Council votes to add Vidzeme market to Riga Central Market’s capital

Riga City Council’s City Property Development Committee has voted in favour of adding Vidzeme Market to AS Riga Central Market’s capital. Opposition members voted against this during the meeting.

Police dismantle criminal group specialising in storage and transportation of excise goods

Officers of Latvia’s State Revenue Service discovered a suspicious shipment during a routine inspection of a vehicle at Riga Passenger Port. With help from State Police, officers found more than 2.3 million illegal cigarettes and 960 litres of spirit, as confirmed by police.

airBaltic receives its ninth Bombardier CS300 aircraft

On 17 June, Latvia’s airBaltic airline received its ninth Bombardier CS300 aircraft. The airline plans to expand its existing aircraft fleet with 14 CS300 aircraft before the end of the year.

Employment agency invites employers to apply for new job support programme

Employers will be able to apply for participation in a programme of the European Social Fund to help create subsidized jobs for unemployed people. Eighteen offices of Latvia’s State Employment Agency will be offering registration until 27 June.

Programme: government continues working on MPC plan’s cancellation

The disproportionate mandatory procurement component costs have become one of the biggest political scandals in Latvia since autumn last year. Attempts to put an end to the MPC system are continuing alongside the search of those responsible for the dysfunctional system. The government’s work group say it is impossible to completely cancel the system, as reported by Nekā Personīga programme.

De Facto: ABLV Bank’s self-liquidation – controlled or not so much?

«Controlled self-liquidation» – this is the undefined procedure Finance and Capital Market Commission has picked for ABLV Bank. This decision came after three months of document assessment, discussions with politicians and active media campaigns, as noted by De Facto journalists.

Latvia police investigate link between murdered insolvency administrator and missing businessman

Latvia’s State Police have begun an investigation of a possible link between the murdered insolvency administrator Mārtiņš Bunkus and the missing businessman Andris Bojārs, as confirmed by police representative Ilze Jurēvica.

Hundreds of migrants rejected in Italy allowed to leave ships in Spain

Migrants taken on rescue ships in the Mediterranean Sea and turned away by Italy and Malta have arrived in Spain's port of Valencia as three ships arrived in the harbour, including the Aquarius, which rescued the 630 migrants the week before.

Monday expected to be exceptionally hot in Latvia

Cool masses of air will flow into Latvia at the beginning of the week. Wind speed will increase as well. Several rain-cloud zones will pass through the country. Monday is expected to be the hottest day of this week in Latvia, as air temperature will likely reach +23° C… +26° C in most of the country. South-east regions of Latvia may even experience air temperature of +29° C.

Week in Lithuania. Lithuanian Railways joins European train system Interrail

Lithuanian state railway company Lietuvos Geležinkeliai has joined Interrail, a European train system that allows passengers to buy cheaper tickets for train travel across Europe.

Zolitūde tragedy lawyer criticises Latvian laws as favourable to insolvency administrators, not business owners

Outspoken Latvian lawyer, Aldis Gobzems, who defends in civil trials the victims of the Zolitūde supermarket collapse, where 54 people died and dozens suffered injuries, has joined the KPV LV party for the parliamentary election and is pointing to perceived political support to a few successful insolvency administrators.

Eurozone simulation with monthly billions to be quit in 2018

The European Central Bank has stated it would quit end its massive programme to stimulate the eurozone economy by buying bonds for 30 billion euros each month in December.

Human traffickers in Hungary sent to prison for 71 people dead in meat truck

For the deaths of 71 migrants, who suffocated in a sealed meat truck in Hungary in August 2015, a Hungarian court has sentenced four men to 25-year jail terms after finding them guilty of people-smuggling.