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BNN summary of the week: end of Lembergs Era? New governor for Bank of Latvia; fight for Riga City Council

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The overthrowing of the «old league» in Latvia has caused a domino effect. The most notable event to have taken place this week is the addition of Aivars Lembergs and four of the associations he has influence over to the list of sanctioned persons USA. This has shaken up the established order in Ventspils and Latvia.

This caused a number of other events to take place: several major companies have left Latvian Transit Business Association; Prime Minister Krišjānis Kariņš has ordered Environment Protection and Regional Development Minister Juris Pūce to assess how the work done by Ventspils City Council is influenced by the situation; Riga Freeport and Ventspils Freeport have come under state control; Lembergs has left his position in Latvian Olympic Committee’s Executive Committee; and the US government has denied Lembergs and his family entry to USA.

Other noteworthy news includes the appointment of Mārtiņš Kazāks as the new governor of the Bank of Latvia.

Meanwhile, AS Citadele Bank has decided to acquire all LLC UniCredit Leasing shares, including its branch offices in Estonia and Lithuania.

Latvia’s Disease Prevention and Control Centre has declared the beginning of an influenza epidemic in Latvia.

The BNN gives you a summary of the key events of the past week, told in news stories of the following topics: End’s Beginning; Position; Health; Business Deal; Rise; Change; Fight.

END’S BEGINNING:

USA adds Aivars Lembergs to its «black list»

Aivars Lembergs. sanctions, USA, OFAC, corruption, black list

Aivars Lembergs

On Monday, 9 December, based on the so-called Magnitsky Law, US Department of Treasury Office of Foreign Asset Control (OFAC) established sanctions against a number of people and their organizations in Europe, Asia and Latin America, including the suspended Mayor of Ventspils Aivars Lembergs.

«Corruption steals away a country residents’ resources, basic services and economic capabilities, all the while making a small number of people rich and contributing to destruction of the environment, political instability and conflicts,» said US Secretary of the Treasury Steven Mnuchin.

OFAC mentioned four organizations owned or controlled by Lembergs – Ventspils Freeport authority, Ventspils Development Agency, Business Development Association and Latvian Transit Business Association.

Full article here

POSITION:

Mārtiņš Kazāks officially becomes governor of the Bank of Latvia

Bankf of Latvia, Mārtiņš Kazāks, Saeima, governor

Mārtiņš Kazāks

On Thursday, 12 December, Latvia’s Saeima officially approved Mārtiņš Kazāks as the new governor of the Bank of Latvia, as BNN was told by Saeima’s press-service.

76 deputies voted for Kazāks. One deputy abstained in the vote.

Previously Kazāks was a council member at the Bank of Latvia. He was also chief economist at Swedbank, as well as a member of the Fiscal Discipline Council. He received a Bachelor’s degree in economics in the University of Latvia, as well as Master’s and PhD in economics in University College London and a diploma in economics in Cambridge University.

The Saeima needed to appoint a new governor of the Bank of Latvia because 21 December will mark the end of the term for the current governor – Ilmārs Rimšēvičs.

Full article here

HEALTH:

Influenza epidemic commences in Latvia

influenza, Latvia, patients, vaccination11 December marks the beginning of an influenza epidemic in Latvia, as reported by Disease Prevention and Control Centre (SPKC).

Flu and other upper respiratory infection monitoring data shows that in the 45th week of the year, the number of patients who turned to healthcare institutions and were later diagnosed with flu in two out of ten cities included in the monitoring had exceeded 100 cases per 100 000 residents.

265.5 flu cases per 100 000 residents were registered in Jelgava and 159.8 cases per 100 000 residents in Riga.

The average flu intensity in Latvia has reached 108.6 cases per 100 000 residents. Infection rates are the highest among children between 0-4 and 5-14 years.

Last week, the spread of flu was observed in Daugavpils, Gulbene, Jekabpils, Jurmala, Liepaja and Rezekne. Intensity varied from 14.6 cases (Jurmala) to 86.5 cases (Liepaja) per 100 000 residents.

Full article here

BUSINESS DEAL:

Citadele Bank acquires UniCredit Leasing active in Baltic States

Citadele, UniCredit, leasing, acquisitionCitadele Bank has acquired 100% of shares in LLC UniCredit Leasing, including its Estonian and Lithuanian branch offices, thereby acquiring control over all UniCredit Leasing operations in Baltic States, BNN was told by the bank.

As part of the deal, which is planned to be concluded in Q1 2020, Citadele also plans to acquire 100% of shares in LLC UniCredit Insurance Broker (including its Estonian branch office).

Citadele Bank’s total net leasing loan volume reaches EUR 1.1 billion, the bank reports. «Once the deal is over, Citadele will enter the Top 3 leading companies of Latvia’s leasing market and become one of the leaders among Baltic States.»

Full article here

RISE:

November’s inflation in Latvia reportedly at 2.1%

statistics, Latvia, CSP, inflation, prices, NovemberCompared to November 2018, the average level of consumer prices rose by 2.1 % in November 2019. Prices of goods had increased by 1.8 % and prices of services by 2.9 %. Compared to 2015, in November 2019 consumer prices were 9.1 % higher. Prices of goods had increased by 7.8 % and prices of services by 12.3 %.

Compared to November 2018, the greatest influence on the average level of consumer prices was exerted by the rise in prices of goods and services related to housing, food and non-alcoholic beverages, alcoholic beverages and tobacco products, goods and services related to recreation and culture, health care, restaurant and hotel services, as well as the decline in prices of goods and services related to transport in November 2019, according to data from the Central Statistical Bureau of Latvia.

Over the year, prices within the group of food and non-alcoholic beverages increased by 2.5 %. Prices of dried, salted or smoked meat (up by 6.9 %), pork (10.7 %), poultry (3.9 %), and meat products (4.0 %) had the most significant upward influence on the average price level within the group. Upturn was also registered in prices of bread (of 4.9 %), fresh fruit (6.1 %), bakery products (3.6 %), chocolate (5.2 %), yoghurt (5.1 %), sugar (5.7 %), and potatoes (6.3 %). Reduction, in turn, was recorded in prices of coffee (of 6.5 %), milk (5.8 %), eggs (3.5 %), fresh vegetables (1.0 %), as well as cheese and curd (1.1 %).

The average level of alcoholic beverage and tobacco product prices went up by 4.5 %. Prices of alcoholic beverages had increased by 4.6 %, which was mainly influenced by the change in beer prices. Tobacco product prices grew on average by 4.5 %.

Full article here

CHANGE:

Local government representatives will no longer work at Riga and Ventspils freeport

Riga Freeport, Ventspils Freeport, board, legislative changes, government, SaeimaFollowing the coming into force of amendments to the Law on Ports, representatives of Riga City Council and Ventspils City Council will lose their respective posts in the board of Riga Freeport and Ventspils Freeport, the law states.

On Thursday, 12 December, Saeima approved in two readings amendments to the Law on Ports, which provide for changes to the composition of the boards of Riga Freeport and Ventspils Freeport, as BNN was told by Saeima’s press-service.

Amendments to the law state that authorities of Riga and Ventspils ports will be put under direct supervision of the Cabinet of Ministers.

Full article here

FIGHT:

Riga City Council’s interim administration may be entrusted to VARAM state secretary Balševics

Riga City Council, VARAM, snap elections, Edvīns Balševics, Oļegs Burovs, interim administrationIf the Saeima votes in favour of dismissing Riga City Council, the interim municipal administration may be entrusted to Environment Protection and Regional Ministry’s (VARAM) state secretary Edvīns Balševics, according to the ministry’s Riga City Council dismissal legislative draft to be decided on by the government on 17 December.

The interim administration’s vice-administrator’s position may be entrusted to Finance Ministry’s Legal Affairs Department director Artis Lapiņš. One other administration member could be Justice Ministry’s Legal Affairs deputy director Aleksejs Remesovs.

Snap elections are planned for 29 February 2020.

In accordance with the Law on Municipalities, when adopting the law on the city council’s dismissal, an interim administration is appointed to the administrative territory following the proposal from the Cabinet of Ministers. The interim administration will perform its functions until the day the newly elected city council gathers for the first meeting.

Full article here


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FKTK lists exceptions in which banks are allowed to service Aivars Lembergs

Latvian Finance and Capital Market Commission has listed cases in which Latvia’s finance market participants will be allowed to service Aivars Lembergs, who is subjected to US OFAC sanctions and accused of serious crimes, and three organizations associated with him – Ventspils Development Agency, Business Development Association and Latvian Transit Business Association.

Appropriate jobs promised for laid-off LDz workers

Latvian State Employment Agency promises to find appropriate jobs for laid-off Latvian Railway workers. If need be, those people will be provided the opportunity for re-qualification, raise their qualification or train for a new profession, as confirmed by the agency’s representative Signe Bierande.

Bordāns selects potential candidates to lead the Supreme Court and Prosecutor General’s office

I can see people who could take the reins over the Office of the Prosecutor General and the Supreme Court and change their work standards, Latvian Justice Minister Jānis Bordāns told TV3 programme 900 seconds when asked about any potential candidates to lead those institutions.

Ukrainian Prime Minister ready quit after leaked voice recording

Ukrainian head of government Oleksiy Honcharuk has offered to resign following the circulation of an audio recording, where criticism of Ukrainian President Volodymyr Zelenskiy and his knowledge in economy is voiced.

Inflation in Latvia reportedly higher than Europe’s and Eurozone’s in December

In December 2019 inflation in Latvia was higher than the average in the European Union and Eurozone, according to information published by Eurostat on Friday, 17 January.

Estonian population growth continues in 2019 due to immigration

Estonia has registered in 2019 population growth for the fifth consecutive year and it can be explained with immigration not with natural growth, according to preliminary data released by Statistics Estonia.

BNN investigation | Raunas street property: quiet assistant with a «secret wallet» for Lembergs

There are suspicions that Aivars Lembergs, subjected to international sanctions, has sold real estate located on Raunas Street 27 in Riga to his sister «on paper only». This may have been done to avoid confiscation of properties in the event of a guilty verdict or a possible arrest over the real estate property. However, it is possible Lembergs maintains full control over this real estate property and, most likely, the property is used to fatten his wallet on a regular basis.

Audit: majority of Latvian housing stock has degraded to a state of a slum

Since the denationalization effective access to housing security in Latvia does not exist and most of the housing stock has degraded up to a state of a slum, as concluded by the Latvian State Audit.

Prime minister affirms possibility of carrying oil supplies for Belarus through Latvia

During his meeting with Belarusian President Aleksandr Lukashenko on Thursday, 16 January, Latvian Prime Minister Krišjānis Kariņš affirmed that oil supplies for Belarus may be possible using Latvia’s ports.

Rain in Australia provides relief to continuing fight against bushfires

In eastern Australia, which has been suffering in prolonged and disastrous bushfires, heavy rain has been falling for the past 24 hours.

Weather to remain warm in Latvia at week’s end

At the end of the week the sky in Latvia will become clear and the sun will shine. No precipitation is expected. However, a low atmospheric pressure area will approach the country from the west during weekends, as reported by Latvian Environment, Geology and Meteorology Centre.

GKR helps overthrow Riga’s vice-mayors and put an end to ruling coalition

Riga City Council vice-chairperson Anna Vladova and deputy Druvis Kleins lost their respective posts at an extraordinary meeting on Thursday, 16 January. This happened because multiple deputies from Honour to Serve Riga voted together with the opposition in favour of dismissing them.

Latvian Railway plans to lay off 1 500 employees

Latvian Railway plans to terminate labour relations with approximately 1 500 employees before the end of 2020, as reported by the company’s representative Ella Pētermane.

Russian State Duma approves Putin’s new Prime Minister

The Russian State Duma has approved on Thursday, January 16, the candidacy of the country’s next Prime Minister appointed by Russian President Vladimir Putin.

Ventspils opposition invites Pūce to act to prevent US sanctions from spreading to city council

Environment Protection and Regional Development Ministry and especially Juris Pūce have to act to resolve the current state of Ventsils City Council. It should be dismissed, as the municipal government does not have moral, ethical or legal foundation to continue managing and implementing the criminal management’s policy, according to Ventspils City Council opposition deputies.

Trade unions urge Latvian government to resolve transit businesses’ blocked bank accounts problem

Multiple trade unions associated with the transit industry have turned to Latvia’s highest ranking officials with a request to resolve the situation with bank accounts of multiple transit companies having been blocked because of US sanctions against Aivars Lembergs. If the government does not act, trade unions promise to organize massive protests.

Anris Leimanis picked as RB Rail council chairman

Anris Leimanis, independent council member from Latvian shareholder, has been picked as Rail Baltica joint Baltic company AS RB Rail council chairman. Ahti Kuningas and Karolis Sankovskis will serve as vice-chairmen, as confirmed by the company.

CSP: number of residents at risk of poverty declines in Latvia

In 2018 a total of 434 thousand persons or 22.9 % of the population of Latvia were at risk of poverty – 0.4 percentage points less than in 2017.

Latvian Saeima to ask Denmark to not extradite Kristīne Misāne to South African Republic

On Thursday, 16 January, Latvian Saeima made the decision to protect the rights of Latvian citizen Kristīnes Misāne, asking the Danish parliament and Danish law enforcers to support their Latvian colleagues and find a solution to avoid extraditing her to the South African Republic, as reported by Saeima’s press-service.

Smiltēns: Riga City Council’s situation can be described – divide, redistribute and plunder

«The situation in at Riga City Council can be described with three words – divide, redistribute, plunder,» said leader of Latvian Association of Regions Edvards Smiltēns in an interview to LTV programme Rīta panorama on Thursday, 16 January.

One single vote left the Lithuanian election system intact

The understanding that Lithuania’s election system needs changes is nearly overwhelming, but the ruling Farmers and Greens’ attempt to lower the Parliament election threshold in parties’ multi-member constituency from current 5 per cent to 3 per cent suffered a setback this week.

Estonian power grid executive detained over bribery suspicion

The Estonian Internal Security Service has detained a board member of the Elektrilevi power grid operator over suspicion of taking a bribe.

Demographer: Latvia has the lowest birth rate level observed the past decade

Birth rates continued to decline in Latvia in 2019. The lowest level of the past decade was reached in the country last year, says demographer Ilmārs Mežs.

Healthcare Ministry proposes single social fees rate for specialized tax regimes

One percentage point social fee rate for healthcare will be applied not only to general tax regime participants but also those working in special tax regime, such as microenterprises, patent payers and royalty recipients, according to a proposal for Latvian Healthcare Ministry.

U.S. and China reach preliminary trade agreement

Easing the U.S.-China trade conflict the governments of the two countries have agreed on the first step of mutual trade reconciliation. Their disagreements have affected the world economy for the past few years.


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