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Monday 24.07.2017 | Name days: Krista, Kristiāna, Kristiāns, Kristīne
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Economic Diary of Latvia. From corruption exports to a sturdy fence

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThis week, OECD published a report on Latvia’s progress in combating bribery of foreign officials. As it turns out, Latvia has no noteworthy accomplishments in this area. Nevertheless, the situation cannot be called completely ruined as well.

As previously reported, Latvia plans to become a member of OECD, complying with specific requirements is an obligatory condition for joining this club. One such requirement is compliance with rules of Convention on combating bribery of foreign public officials in international business transactions.

OECD experts have come to the conclusion that Latvia is in an early stage of combating this phenomenon. What this means is that Latvia does not apply legislative measures actively enough to properly combat corruption and money laundering.

It is hoped that this convention will help countries that have signed it to adopt legislative means to combat so-called exports of corruption – ‘intentional offers, promises or other illegal advantages to foreign officials in exchange for influence over international business deals’.

OECD experts mention some progress in Latvia’s legislative development work. Nevertheless, experts say the level of application of legislative means is worrying. In particular, OECD mentions five cases when there were justified reasons to suspect Latvian companies or private persons in bribing foreign officials. None of those cases have resulted in a large-scale investigation, however. In one such case, an American IT company admitted in a testimony to the U.S. government that its Russian branch had paid a bribe to Russian officials. A German mediator transferred EUR 2.2 million to Latvian and Lithuanian banks, on accounts controlled by corrupt officials of fake companies. In another case, a Canadian mining company was paying bribes to high-rank officials in Kyrgyzstan (including the President) for access to a gold mine. Money was being transferred through Latvian mediators.

Money laundering has a separate section in the OECD report. Experts note that there are real risks of money illegally acquired abroad being laundered through Latvia’s banking system by non-resident clients.

Belarus ‘tastes’ Latvia

Days of Latvia opened up in Minsk this week. This event will last until 20 November. The motto is ‘Taste Latvia — Адчуй Латвію’. Days of Latvia are organized in order to popularize Latvian goods in Belarus and expand cooperation between those two countries. Representatives of 18 Latvian companies joined the delegation that departed for Belarus. These companies work in areas like IT, telecommunications, finances, metalworking and manufacturing, food production, construction and others.

Latvian Economy Minister Dana Reizniece-Ozola and Director of Latvian Investments and Development Agency Andris Ozols have also departed to Belarus along with businessmen. Reizniece-Ozola noted that if Latvia and Belarus had one common platform like WTO, cooperation between the two countries would become ‘simple and clear’. She added that Latvian business is interested in EU sanctions being lifted from Belarus, because this particular country is a valuable trade and economic partner for Latvia. The economy minister said she hopes the decision regarding sanctions against Belarus will be made before 31 October.

In regards to the country’s possible entry in WTO, Andris Ozols said membership in the World Trade Organization includes ‘predictable behaviour’ from member states. He added that the possible membership in WTO would increase the turnover of goods and increased investments for Belarus.

In 2014, the turnover of goods between Latvia and Belarus reached EUR 565.4 million. Belarus became Latvia’s 12th most important trade partner. The volume of exported goods and services to Belarus reached EUR 212 million (1.5% of Latvia’s total export volume). The volume of imports of goods and services reached EUR 353.5 million (2.4% of Latvia’s total import volume).

Building a fence around the country

While Latvia’s Economy Minister is discussing options to lift sanctions from Belarus and cultivate inter-governmental cooperation in different spheres of economic development, Latvian Prime Minister Laimdota Straujuma announces the need to install a fence on the border with Belarus in hopes of combating illegal migration.

According to her, many countries of the European Union are busily installing fences on their borders right now. She adds that this does not mean people will be shot on sight. As for Belarus, the fence, according to Straujuma, would be installed on sections of the border where attempts to cross the border illegally can potentially be made. The cost of this project is not reported.

Previously, Interior Minister Rihards Kozlovskis announced that Latvia plans to erect a 90 km fence on the border with Russia – in order to combat illegal immigrants.

Latvia plans to spend EUR 3 million on improvements to security of its eastern borders.

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