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Friday 22.06.2018 | Name days: Ludmila, Laimdots, Laimiņš
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BNN summary of the week: oligarch mafia, dangerous products in EU, and what to expect from 2018

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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, Defence, Future, Business, Decline, Growth and Opinion.

CHANGE: Swedbank details five hottest economic trends this in 2017 and 2018

This year for the world and Latvia’s economy has been a year of unexpectedly rapid growth with positive influence on state budget, as well as wallets of businesses and residents alike. Latvia’s growth rate in Q3 2017 (5.8%) was more rapid than expected. Although growth will become slower with time, Latvia will experience a rather rapid economic growth next year. Chief economist of Swedbank Latvia Mārtiņš Kazāks mentions five of the most topical economic trends in 2017 and 2018.

2017 passed in Latvia under a sign of massive tax reforms. Changes have helped reduce the tax burden, especially for recipients of low income. In addition, all income will be applied with a single basic tax rate, Kazāks said.

«Changes to corporate income tax have to parts: cancellation of advance payments and no more application of corporate income tax on undivided profits. The first will assist businesses during times of crisis and the second will hopefully motivate people to legalize their actual financial flow. In general, the tax reform promises to go in the right direction. Risks, however, are associated with proper application and the amount of bureaucracy involved. The government should learn to speak more clearly – one of the biggest problems is controversial and ambiguous communication,» the economist said.

Full article here

DEFENCE: Estonia’s territory cannot by occupied in matter of days, notes army chief of staff

Estonia’s territory cannot be captured by a foreign power in the matter of days, although certain areas of the country could be occupied in such a short time, evaluated the chief of staff of the Estonian Defence Forces.

In an interview with the Estonian public broadcaster ERR on Wednesday, January 3, Brigadier General Martin Herem explained that the EDF is able to send 21,000 troops into battle describing this as the so-called responsible number, namely such amount of soldiers could be given the necessary weapons and ammunition to push back a military attack.

«If we can arm these 21,000 men, we can manage against quite a few things by ourselves. Estonia can’t be occupied within days. It’s possible that some areas may be taken, but the question then is, whether the enemy really wants to go ahead if they face 21,000 men,» Herem continued.

Full article here

FUTURE: FinTech outlook for 2018 – mobile payments will become an everyday occurrence

It is likely that we will pay for coffee or theatre ticket using our mobile phones, and everyday purchases will be made using near-field communication (NFC) cards, Ferratum Bank explains about the close future of finance technologies.

Payments covered using mobile phones

Tap and go service is already well-known around the world. This is why it is expected that more and more people will start using it in Latvia next year, Ferratum Bank representatives say.

The company explains that this applies to payments with a value between 10 to 20 euros. All that is needed is a mobile app that allows transferring money with a simple text message. Mobile payments allow users to pay a restaurant bill, purchase a theatre ticket and shop in Riga and elsewhere in the world with one tap on the screen of their phone.

Small purchases without PIN code

The company also predicts that there will be an increase with the number of people that appreciate the advantages provided by NFC cards. Representatives say that such cards allow for a quick and simple transaction process – merely by bringing the card close to the terminal, without the two even touching. The main advantage is that it is possible to make purchases under EUR 10 without having to input the PIN code.

Full article here

BUSINESS: KVV Liepājas metalurgs’ potential investor given two weeks to consider purchase

The potential investor of insolvent KVV Liepājas metalurgs is given two weeks to consider purchasing the company, says Latvian Economy Minister Arvils Ašeradens.

He admits that talks with the potential investor are not over; the investor wants to secure the most beneficial conditions in business negotiations. Latvian government is also highly interested in getting back the money it has invested in saving the company, even though it is clear that it will be impossible to recover the entire amount.

«The government won’t get all of its money back. A specific amount will be voiced once an agreement has been reached,» said the minister.

According to him, the government will wait for the potential investor’s decision for two more weeks. During this time the investor will have to submit guarantees and transfer finances to accounts of KVV Liepājas metalurgs’ creditors. If this is not done in two weeks, the government will consider selling the company in separate parts.

The minister also said that several potential investors have expressed an interest in purchasing KVV Liepājas metalurgs. «The investor in question is the only one with whom active talks are underway. Still, other investors have expressed an interest in KVV Liepājas metalurgs as well. However, we have yet to commence active talks with them,» added Ašeradens.

Full article here

DECLINE: 156 products dangerous to human health were noted on the EU market last year

According to data compiled by the Health Inspectorate, 156 types of products dangerous to human health were found on the European Union market in 2016.

As explained by the inspectorate, the Rapid Information Exchange System regularly receives information regarding potentially dangerous products. Actions are taken to prevent those products from entering Latvia’s market.

For example, there were reports of ten such products in December. Following a report from Germany, an Austrian skin care product was called off. France reported about a German-made cosmetics removal product. After a report from Slovakia, a Chinese-made glue and Greek spray paint were pulled from store shelves.

Estonia had also reported on another dangerous product in December – an Italian hand cream.

Full article here

GROWTH: Minimum wage in Latvia reaches EUR 430 in 2018

Starting with 1 January 2018, the minimal wage in Latvia will be EUR 430, which is EUR 50 higher than it was the year before. This is provided by amendments approved by the Cabinet of Ministers in regards to minimum monthly wage amount for standard work time and calculation of the minimal hourly rate.

Previously, Welfare Ministry noted that raising minimal monthly wages will increase employers’ costs. This includes the increase of tax payments from employees’ wages at EUR 430 to social insurance fees of EUR 13.95 and additional labour costs – by EUR 50.

Labour force costs will only increase for employees whose previous minimal wage or wage was below the minimum detailed in the tax reform. Employees whose wage will grow from EUR 380 to EUR 430 will gain an additional amount of EUR 57.83.

Full article here

OPINION: Inguna Sudraba’s «dirty tricks» prove our voters are not gullible

«When then the President of Latvia Valdis Zatlers dissolved the 10th Saeima, which was infested with oligarchs, it was a chance to get away from a state administration controlled by a handful of influential people. In 2014, Inguna Sudraba, who served as State Auditor at the time, had a very good rating in Saeima elections to form the government. However, thanks to the timely leak of information regarding her trip to Moscow, which she denies to this day, and her ties with people close to the Kremlin, voters had enough to make their conclusions. And although Sudraba’s party made it to the Saeima, it does not have any serious representation. This proves that our voters are not gullible,» said chairperson of Saeima’s European Affairs Committee and member of ‘Kustība Par!’ Lolita Čigāne in an interview to BNN.

Oligarch talks swept under the rug or «mumblings of old men»

Čigāne says that attempts to sweep Oligarch talks under the rug and declare them as nothing more than ‘mumblings of old men’ continue in Latvia. According to her, people like Andris Ameriks, Jānis Dūklavs and Aivars Lembergs must not be allowed to work in politics anymore. «They have to carry responsibility for those talks.»

The politician says that Oligarch talks mentioned ways of buying the media in the country. «Lembergs, for example, has an entire network of media that attack everyone who criticizes his actions. They also take the time to praise him and his associates.»

One of the most major problems, according to Čigāne, is that people continue voting for those politicians. According to her, there is a lot of information to take in, and it is difficult for residents to focus and form their opinions. «The goal for oligarchs is to muddy the water and say they aren’t clean, but neither is anyone else; we aren’t honest, but neither is anyone else».

About judicial power, Čigāne said that Lembergs has been involved in different court processes a long time and has become very good at stalling. «We have to be insistent enough to make sure the truth is revealed. We should become more intolerant of such situations – when a person robs the country and hatefully declares his intention to sell it. On top of it all, he dresses in extravagant clothes bough, possibly, using part of the stolen money. Now he sits and sneers at us.»

Full article here

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Latvia’s parliament conceptually supports new sanction regulations

On Thursday, 21 June, Saeima supported in the final reading amendments to the Law on International Sanctions and National Sanctions of the Republic of Latvia that are meant to improve sanction regime regulations to ensure efficient application of national and international sanctions, as reported by Saeima press-service.

Storm in Tallinn floods streets, cuts Croatia-Argentina match short on TV

A rain storm has hit northern Estonia on Thursday, flooding some streets in the capital Tallinn, damaged buildings and badly affected the broadcast of an interesting World Cup game.

American banks tested for financial stress show positive results

The U.S. has performed banking stress tests and found that the 35 largest banks operating in the country have enough funds on hand to sail safely through a severe financial crisis.

Saeima fires judge for coming to work in a drunken state

On Thursday, 21 June, Latvia’s parliament supported the proposal to dismiss Rezekne Court judge Arvis Garais from his post. 71 deputies voted in favour, no one abstained and no one voted against.

UK to have three requirements to EU citizens willing to remain in UK

For citizens of the European Union willing to continue living in the UK after the country leaves the bloc, they will have to submit applications and answer three key questions over the internet, according to the country's interior minister.

Weather in Latvia to be rainy and cool during Ligo; next week’s weather to be dry and hot

Weather at the end of the week in Latvia will be dictated by a cyclone. Because of that, there will be instances of rain on Ligo. Weather is expected to improve next week, however, according to Latvia’s State Environment, Geology and Meteorology Centre.

Lithuania’s blood plasma corruption scandal extends to Latvia

The former head of Lithuania‘s National Blood Centre, suspected of corruption and involvement in unlicenced activity, received more bad news this week from Latvia, where investigators of the Lithuanian Special Investigation Service had questioned the Latvian Health minister, Anda Čakša.

Administrative burden to be reduced for foreign students and researchers

The administrative burden will be reduced for foreign students and researchers, as well as all education and research institutions hosting them. This is provided by the amendments to the Immigration Law approved by the Saeima in the third reading on Thursday, 21 June.

Latvian Economy Minister endures no-confidence vote

Saeima declined opposition deputies’ request for dismissal of Economy Minister Arvils Ašeradens.

Swedbank economist becomes new member of Bank of Latvia Council

On Thursday, 21 June, Latvia’s Saeima approved Mārtiņš Kazāks in his new post as member of Bank of Latvia Council, as confirmed by Saeima’s press-service.

Pope Francis’ visit to Latvia will be a national holiday

Latvia’s parliament has approved in the final reading a law that makes 24 September – the day Pope Francis plans to visit Latvia – a national holiday.

ICT specialist numbers in Latvia are below Europe’s average level

In Latvia, information and communication technology specialists form only 2.2% of all employed people in the country, which is considerably below the average level in the European Union – 3.7%. Romania and Greece are the only two EU member states in which the number of ICT specialists is below Latvia’s, according to European Commission’s DESI index.

Hungary adopts prison sentence for helping migrants

Hungarian National Assembly has passed a set of laws criminalising with prison terms some help provided to illegal immigrants by non-governmental organisations.

Harmony plans turning to Constitutional Court to prevent transition to Latvian language in schools

«Why should this reform stay unrealized? It is because schools are not prepared for cardinal changes coming from dozens of other reforms that have already shocked the country’s entire general education system,» says chairman of National Minority School Parents Forum and member of Harmony’s work group in Konstantīns Čekušins.

Deputies detained in KPV LV criminal case not declared suspects yet

Saeima deputy Artuss Kaimiņš and businessman Viesturs Tamužs detained in the criminal process regarding possibly illegal funding of KPV LV party have not yet been declared suspects. Both are currently in police custody. It is likely Kaimiņš will be released later today, 21 June.

Production of mines and grenades planned in Estonia

As the Estonian parliament has adopted new rules on military arms and ammunition production in the country, local defence firm Eesti Arsenal has voiced its plan to build a factory in Estonia to make military explosives.

Total tax debts in Latvia reached EUR 1.224 billion in June

At the beginning of June, total tax debts in Latvia, including topical, halted debts and extended repayment terms were equal to EUR 1.233 billion, which is 0.6% less compared to May, as reported by State Revenue Service.

Switch off internet nationwide during exams – Algerian approach

In an attempt to prevent cheating during secondary school exams, the north African nation Algeria, has turned off internet in its whole territory.

Control Service proposes kicking out shell companies as intensely as offshore companies

Shell companies in Latvia should be combated with the same intensity once shown to offshore companies, says chief of Anti-Money Laundering Service Ilze Znotiņa.

EU imposes tariffs on blue jeans, motorcycles and other U.S. export goods

The European Union will introduce retaliatory tariffs against U.S. exports on Friday, EU Trade Commissioner has stated a top official has stated in the bloc's reaction to Washington imposing steep duties on steel and aluminium earlier in June.

Latvia’s Saeima proposes improving job-combining rules for state officials

On Wednesday, 20 June, Latvian parliament’s Public Administration and Local Government Committee decided to submit for review amendments to the Law on Prevention of Conflict of Interest in Activities of Public Officials.

Ukraine's anti-corruption court law insufficient to IMF commitments

The International Monetary Fund has commended the Ukrainian parliament for passing a law to establish an anti-corruption court and pointed to need to amend it to ensure the court can work effectively.

Opinion: they’re trying to shut us up; KPV LV is inconvenient for current government

«We are inconvenient for the current government, the established order, because for the first time a party is prepared to use facts in its rhetoric in the pre-election period. They are trying to shut us up,» said KPV LV prime minister candidate Aldis Gobzems at a press-conference after Artuss Kaimiņš was taken away by Corruption Prevention and Combating Bureau.

Hydro and wind power plants produced 70.5% more electricity last year

In 2017 gross energy consumption in Latvia comprised 194.9 petajoules, which is 5.5 % more than in 2016. Over the past five years, the gross energy consumption has not changed significantly. However the share of renewable energy has increased by 2.55 percentage points.

Milder penalties for the accused in digital TV case; idea’s authors get no prison sentence

Riga Regional Court has released a shortened ruling in the so-called digital television criminal case. With it, the court acquitted previously convicted former director of Latvia’s National Theatre Ojārs Rubenis. Nevertheless, some of the accused have been sentenced to fines and actual prison time.