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Tuesday 19.06.2018 | Name days: Nils, Viktors
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BNN summary of the week: Saeima’s «abstention specialists»; MPC payments; Latvia’s retirement pension system

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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; Opinion; Promise; Court; Fight; Proposal.

CHANGE: Fixed MPC portion to drop 27.8% for electricity users in July

From 1 July onward, the fixed portion of mandatory procurement component will decline by 27.8% for all electricity users, as reported by Public Utilities Commission.

On Wednesday, the council approved AS Enerģijas publiskais tirgotājs’ submitted power components that compensate public traders’ costs for CHP plants’ power output – fixed portion of MPC. Compared to existing output components, the newly approved ones are 27.8% lower in all power output and consumption level. It is expected that the new MPC will come to force 1 July. Power component is one part of the total MPC payment.

The average value of the approved MPC and power component has been reduced from 25.79 EUR/MWh to 22.68 EUR/MWh. Following the decision by the regulator, MPC will reduce for all consumer groups.

On 24 April, the Cabinet of Ministers supported reducing the average value of MPC and power component. The regulator approved changes to MPC and power component calculation methodic on 14 May. Changes include reducing the general fixed portion of MPC payment for all end users.

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OPINION: Deputy names ‘abstention specialists’ in Latvian Saeima’s votes

«I was elected to make decisions, not abstain from them. Abstention in votes automatically counts as ‘against’ in the Saeima. I believe this practice needs to be changed. You’re either in favour or against. Businessmen, for example, have no way to abstain from making decisions. The Saeima, on the other hand, has a lot of ‘abstention specialists’,» said Saeima deputy Artuss Kaimiņš in an interview to RīgaTV 24, commenting on the initiative on manabalss.lv to liquidate the abstention right for parliament members in votes.

Kaimiņš named the main «abstention specialists»: »: Romāns Naudiņš, Aleksandrs Kiršteins, Kārlis Krēsliņš, Valters Dambe, Einārs Cilinskis, Inese Laizāne, Andris Siliņš, Kārlis Seržants, and Silvija Šimfa.

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PROMISE: Minister promises to fill gap caused by cancellation of extended normal work time for doctors

A clear strategy is in the works to fit the ruling of the Constitutional Court and organize human resources to fill the formed gap, said Latvian Healthcare Minister Anda Čakša after meeting with hospital representatives.

The Constitutional Court declared rules that dictate remuneration for working extended normal work time as non-compliant with the country’s Constitution. The court concluded that remuneration for working extended hours is still below the amount stated in the Labour Law. The regulation of the law will be declared void starting with 1 January 2019.

Jevgēņijs Kalējs, chairman of Latvian Hospitals Association, said after meeting with the minister that the country’s commitment to paying overtime to medical personnel will not resolve the problem of human resource availability, because the Labour Law states that the amount of overtime is not allowed to exceed 40 hours a week. «This basically limits the patient flow and [service] accessibility,» explains Kalējs.

According to him, after constitutional court’s ruling hospitals will have to limit the volume of offered services or have doctors migrate from one job to another to compensate the lack of medical personnel. «We cannot possibly prepare more specialists in Latvia. We can only move the ones we have from one office to another,» said Kalējs.

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COURT: parent companies could be held accountable for subsidiaries’ competition violations

The Supreme Court of Latvia has made a ruling, in accordance with which Latvia’s competition rights are established in a way that permits authorities to punish parent companies for violations of competition rights committed by their subsidiaries.

This means Competition Council will be authorized to apply penalties to parent companies in situations when competition violations are committed by their subsidiaries, as BNN was told by the council.

In 2014, the Competition Council found that multiple Moller Group companies had been systematically coordinating their procurements over a course of at least five years. CC concluded that those subsidiaries did not perform their activities independently of their parent companies. Because of that, CC applied accountability for several parent companies – Moller Auto Baltic AS, Harald A.Moller AS and Heinz Wilke Autohandel Gmbh. CC applied accountability for parent companies after finding their 100% participation in their subsidiaries.

After reviewing an application from parent companies regarding unjustified application of responsibility, the administrative regional court satisfied it, and CC had the measure cancelled partially. It is mentioned in the ruling that the Competition Law does not permit application of responsibility to a company that is not responsible for violating the law, CC explains.

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FIGHT: 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.

Three deputies voiced support for Kušners – Imants Parādnieks, Inguna Sudraba and Juris Viļums. Three deputies – Jānis Vucāns, Aleksandrs Kiršteins and Edgars Putra – voted against. Deputy Renārs Putniņš abstained in the vote, and Igors Pimenovs was absent.

After interviewing Kušners last week, deputies decided to take a pause in this matter. Most of the questions Kušners was asked were associated with events of 2005. At the time, he was deputy chief of the Legal Affairs Office of the Bank of Land. He was later appointed as an authorized person to Delaware-registered company Carew Estates LLC.

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PROPOSAL: Latvian State Audit says it is necessary to sort out retirement pension system

Latvia should finally sort its sensitive retirement pension system, said State Auditor Elita Krūmiņa in an interview to Rīta Panorāma programme of LTV.

She says that the State Audit performs inspections in ministries and central institutions every year. Unfortunately, problematic matters continue surfacing time and time again. One such problem mentioned by Krūmiņa was the retirement pension – this matter has been stuck in legislative limbo for more than ten years.

The State Auditor notes that the age threshold for retirement pension has remained the same for a very long time, unlike the regular age pension. Retirement pension is also significantly larger, which is unfair.

Krūmiņa also says that more than 70% of retirement pension recipients continue working, thereby circumventing the law that prohibits employed people from receiving retirement pension.

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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.

Lithuanian employers bristle against minimum wage raise to 450 euro

The disparities of the socio-economic development of the regions are very high in Lithuania, so raising the minimum wage from 400 euros now to 450 euros as suggested by the Lithuanian Government would cripple many small and medium-sized business owners in the less prosperous regions and the municipalities, Lithuanian economists caution. The minimum wage was raised in Lithuania by 20 per cent to 400 euros last year.

No-confidence vote on Latvian Justice Minister postponed to June 20

In the Latvian parliament, two motions asking for the resignation of Latvian Justice Minister Dzintars Rasnačs have been submitted and the vote is expected to take place on June 20.

Judge urges to stop testing politicians for cooperation with Soviet KGB

As Latvian politicians running in elections have to acknowledge that they have not worked for the Soviet State Security Committee during the Soviet occupation of the country, courts have since 1995 been looking into cases of possible cooperation and now, due to the lack of evidence, politicians should drop the evaluation of possible cooperation with the KGB, suggested a judge at the Riga Regional Court.

State budget income up 11% in Latvia this year

In the Latvian state budget, a total of 3.8 billion euros have been paid in the first five months of 2018, which is by 11% more than in the respective period last year, the Latvian State Revenue Service stated.

Volkswagen fined billion euros for diesel exhaust scheme

German car maker Volkswagen has been fined one billion euros by German prosecutors for its diesel emissions scandal and the car firm's management has stated it did not plan to appeal against the fine.

U.S.: Sanctions against North Korea to remain until complete denuclearisation

The U.S. has warned North Korea that it would not see any economic sanctions lifted until it has demonstrated «complete denuclearisation», according to U.S. Secretary of State Mike Pompeo.

Popular restaurant chain denies alleged tampering with cash registers

Criminal police in Latvia has conducted searches at the popular Riga restaurant chain Vairāk Saules on suspicion of alleged tampering with its cash registers.

Pigs in first swine fever-hit farm culled

As to the first case of domestic pigs in Latvia being infected with the African swine fever virus in 2018, Latvian veterinary authorities have culled 165 pigs in the affected farm in central Latvia.

Bank of Latvia head appeals against decision to remove his access to state secrets

The Bank of Latvia President, Ilmārs Rimšēvičs, who is suspected of accepting a bribe, has appealed to the Prosecutor General, Ēriks Kalnmeiers, against the decision by the Latvian Constitution Protection Bureau to remove his permit to access state secrets.

Charging electric car to cost 15 cents per minute in Latvia

As Latvia builds its network of 150 quick charging stations for electric vehicles, the Latvian government has approved the cost of the service at 15 euro cents per minute with the value added tax.

Bank watchdog allows ABLV Bank to perform voluntary liquidation

Latvian Financial and Capital Market Commission (FCMC) has decided at a board meeting to allow ABLV Bank to start its voluntary liquidation process.

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