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Monday 20.08.2018 | Name days: Bernhards, Boriss
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BNN summary of the week: MPC system’s end; Rimšēvičs’ replacement; Latvia’s free finance market

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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: Future; Fight; Announcement; Change; Growth; Discussion.

FUTURE: Minister says Latvia may drop using MPC system in the next three years’ time

Latvia may completely cease using the mandatory procurement component system, as confirmed by Economy Minister Arvils Ašeradens.

This proposal was supported this Wednesday by the ministry’s work group that has worked on ways to cancel MPC system these past several months.

To abolish the system, the ministry proposes restoring subsidized electricity tax at 15% in 2019 and establishing new requirements for biogas plants on minimal food waste and other organic waste ratio.

It is also planned to reform power output payments, forming changes to its administration, establishing a requirement for power stations to include ancillary services to the transmission system to reduce consumers’ payments.

Full article here

FIGHT: Bank of Latvia governor will appoint his replacement at ECB; will contest prosecutor’s decision first

Bribery accused governor of the Bank of Latvia Ilmārs Rimšēvičs intends to name his replacement in the European Central Bank Council. However, doing this is impossible at this time, because he first has to contest the decision of the Prosecutor General’s decision in regards to the investigation, said Rimšēvičs’ lawyer Saulvedis Vārpiņš.

Defence believes Latvia’s has failed to complete European Union Court’s order on interim injunction, because approval of a new representative is legally impossible in a situation when the governor or the Bank of Latvia remains applied with a security measure – restriction to perform his duties, said lawyer Saulvedis Vārpiņš.

He added that the EU Court «made it clear with its order that Latvia has to halt the security measure so that Rimšēvičs is able to appoint his replacement in ECB in accordance with regulations.»

Approval of a replacement member of the European Central Bank differs from simple provision of authority, because the governor of a central bank first has to be able to access information system and information about developments on the world’s financial markets, said Vārpiņš.

Before approving a replacement representative in ECB, the governor of the Bank of Latvia needs to have access to matters discussed during meetings of ECB Council, as well as meet with central bank’s specialists to discuss positions in certain matters, added Vārpiņš.

«Unfortunately, instead of approving a replacement in ECB to ensure continued function of the organization, Rimšēvičs if forced to appeal the decision made by the Prosecutor General in court,» said the lawyer.

Full article here

ANNOUNCEMENT: Air quality in Ventspils on par with the rest of Latvia

«Concentration of PM10 particles in air in Ventspils does not exceed the average index across Latvia, which means the air in the port city is not worse than average in Latvia,» says SIA Estonian, Latvian & Lithuanian Environment board member Aiga Kāla.

BNN had previously reported that the topic of air quality has been a very hot topic in Ventspils these past couple of weeks. Many complaints have been received from Ventspils residents about the presence of coal particles in the air, which can be explained with unusual weather conditions in the city. Other complaints detail the horrible smell coming from SIA Bio-Venta.

On 31 July, representatives of Ventspils Commercial Port (VCP) and State Environment Service decided to meet with residents of Ventspils.

«There is a lot of misleading information reported by the media in relation to dust and the effect it has on human health. Those are coal (not dust) particles. They are 10 μm larger than dust particles and cannot enter the human body. Therefore they cannot impact human health,» said SIA Estonian, Latvian & Lithuanian Environment board member Aiga Kāla at the beginning of the meeting.

She added that «large particles visible with the naked eye can cause some discomfort, but they do not end up in our lungs». To fix this situation, Ventspils Commercial Port considers using snow cannons to create a fog-like barrier from the side of the docks. VCP Technical Director Māris Lieģis said during the meeting that the port also has plans to set up more platforms with snow cannons to create the ‘water wall’. He mentioned visiting Klaipeda, where his Lithuanian colleagues also tried using snow cannons in summer.

Representatives of the State Environment Service stressed time and time again that no environment pollution is found in Ventspils. «As confirmed by Ventspils regional environment office, there have been ten cases of PM10 particle concentration exceeding permitted levels at the coal loading complex in the first six months. Not a single case was registered in July. Permitted concentration level of PM10 particles in residential areas is 50 μm/m3. The highest concentration level recorded in Ventspils in July was 21.7 μm, and it was recorded only once. In other days, concentration levels varied from 3.1 μm to 18.7 μm. This means no pollution was recorded in Ventspils,» as BNN was previously told by State Environment Service deputy director general Aina Stašāne.

Measurements are provided by Latvia’s Environment, Geology and Meteorology Centre’s laboratory and State Monitoring Network, which provides data monitoring. Environment, Geology and Meteorology Centre is responsible for air quality measurements across all of Latvia, as well as maintenance of observation stations, performance and quality of measurements.

Full article here

CHANGE: Acting SRS manager says the next head of service should be someone «worth following»

Can the State Revenue Service be trusted? Who benefits from SRS remaining with no head? Do people see any point in paying taxes, and why is it necessary to take care of SRS employees? BNN asked acting SRS director Dace Pelēka.

Why is it so hard to find a director general for SRS?

Latvia’s State Revenue Service was founded in 1993. For 25 years the institution has been monitoring taxes and taxpayers. According to Dace Pelēkā, Latvia’s SRS is a multi-functional institution. However, the seat of the head of SRS has remained vacant ever since the unexpected passing of the last SRS director general Ilze Cīrule in March.

Dace Pelēkā admits the last director of SRS Ilze Cīrule, who had entered the service with new ideas, had provided employees something of a shock therapy. Nevertheless, in certain matter she asked questions no one else had asked before her.

«After years of working in state administration, it became necessary for us to look at certain matters from a completely different viewpoint. Now that SRS has no director, we continue what was started during Ilze Cīrule’s term, because the tasks entrusted to us are challenging and require a lot of time.» She adds that SRS has not stopped for a moment in its work and development in the past half-year.

When asked if there are people who benefit from the service remaining without a head, Pelēkā said no. «Finance Ministry Dana Reizniece-Ozola has mentioned that it would be best not to organize the selection process before elections. I agree, because it is clear that during the pre-election period some candidates may unwillingly become part of some political party’s campaign.»

Dace Pelēkā does say: «There is no reason to doubt the necessity of a leader for an institution like SRS. The role of a leader in motivating workers is incredibly important. Workers want to see a person worth following as their leader.»

Full article here

GROWTH: Finance Commission says Latvia’s business sector has gotten rid of unwanted shell companies

As of 7 July 2018, the ratio of deposits from risky shell companies in Latvia’s banking sector was 0.03%. Most of this amount consists of the remaining balance of funds exiting the country, as reported by Finance and Capital Market Commission.

9 May marked the coming into force of amendments to the Law on the Prevention of Money Laundering and Terrorism Financing, which required participants of Latvia’s finance sector to cease working with businesses that fit two signs of shell formations – perform no actual business activities and have no economic value, or be registered in a country that has no requirement for submission of regular financial accounts.

«Now we can safely say our banks have performed their task to the letter. Only 0.03% or EUR 4.5 million is left – the money blocked on frozen accounts that require additional checks to determine their origin. We can clearly see the work that commenced in 2016 still continues. The proportion of risky clients continues reducing every day, because banks continue terminating ties with shell formations that are not prohibited yet but still carry certain risks for banks. We can conclude that in relation to shell companies, and not just their prohibited types, around EUR 1.5 billion have left Latvia’s banking sector in the first half-year of 2018. Cooperation has been denied to more than 9,000 different kinds of shell companies,» says FCMC chairman Pēters Putniņš.

Full article here

DISCUSSION: Latvian government starts talks on applying reduced VAT on public catering

Finance Ministry has reached a conceptual agreement on applying on restaurants a reduced 12% value added tax rate instead of the current 21% under the condition that catering companies are to cease paying employees envelope wages, LNT reported on Wednesday, 1 August.

Catering companies have been trying to secure tax benefits for a long time now. Jānis Jenzis, president of Association of Hotels and Restaurants of Latvia, said the excessive tax burden has already caused the closure of some prominent restaurant in Riga.

Estimates from Finance Ministry show that more than 40% of people employed in the industry are not even paid minimal wages. For there to be a general agreement regarding the minimal wage level for people employed in the industry, the document needs to be signed by companies that together employ at least half of people working in the industry and whose total turnover exceeds half of the entire industry’s turnover. The president of the association said he hopes the signing of the agreement is a matter of time.

Finance Minister Dana Reizniece-Ozola said reduced VAT may be applied to the industry only if catering companies cease paying envelope wages. «If the industry signs a general agreement detailing a specific wage level for each profession, then we could conceptually support reducing VAT,» said the minister.

Full article here


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Week in Lithuania. Probe finds no «drastic» EU differences in prices of non-food goods

A price comparison probe by Lithuania's Justice Ministry and the State Consumer Rights Protection Authority (SCRPA) has found no «drastic» differences in the prices of non-food goods in Lithuania and other EU countries. Justice Vice Minister Irma Gudžiūnaitė said that Eurostat's figures for 2017 show that the level of footwear and clothing prices in Lithuania makes 105 per cent of the EU average. The probe was carried out by the price comparison cite pricer.lt for the Justice Ministry and SCRPA. It compared 60 different non-good items in 12 EU countries on August 7.

BNN summary of the week: SRS searches for spotless reputation; MPC talks continue

BNN offers a summary of this week’s topical news in a variety of categories: Progress; Change; Contest; Announcement; Future; Politicians.

Eurostat: Latvia had inflation rate higher than average in EU and Eurozone

In July, Latvia’s inflation rate was higher than the average in Europe and Eurozone, according to data published by Eurostat.

Presence of Latvian milk reduces, whereas presence of imported milk increases in Latvia

The proportion of milk produced in Latvia is starting to lose to imported milk, as concluded by Central Union of Latvian Dairy Farmers chairman Jānis Šolks.

Seven previously convicted candidates crossed from Saeima election lists

On Friday, 17 August, the Central Election Commission decided to cross out seven previously convicted deputy candidates. The decision regarding one more candidate has been postponed until the next meeting, as confirmed by the commission.

Aspiring prosecutors «drop out» in tests – half of contenders fail second stage of tests

Approximately half of aspiring prosecutor candidates has failed the second portion of tests for general and judicial knowledge.

Riga International Airport concludes first half-year with turnover increase of 13%

Riga International Airport concluded the first half-year of 2018 with turnover increase of 13% when compared to the same period of 2017, according to the airport’s unaudited and shortened account for the six-month period before 30 June 2018.

New tender announced for post of SRS director; first requirement – spotless reputation

Latvia’s State Chancellery has announced an open personnel selection process for the post of director of State Revenue Service. Application submission process will last until 14 September.

CEC to decide on four candidates’ possible relation to KGB

Latvia’s Central Election Commission has received results of investigations of all 13th Saeima election candidates from Interior Affairs Ministry’s Information Centre and Latvian Centre for the Documentation of the Consequences of Totalitarianism.

Concord will have to include bread distribution costs in kebab café in its pre-election expenditures

Political party Concord will have to include in its 13th Saeima pre-election campaign expenditures the money spent by one of its candidates on distributing bread to pensioners free of charge in a kebab café in Bolderāja, as reported by TV3 news.

Weekends expected to be warm and at times hot in Latvia

On Friday, 17 August, the sky will partially cloudy again in Latvia, but no major precipitation is expected. Fog may form is certain regions at night thanks to slow wind speed. Maximum air temperature is expected to be around +22° C… +26° C. Night-time air temperature will stay at +11° C… +16° C, as reported by State Environment, Geology and Meteorology Centre.

Latvia’s State Audit requests additional funding to invest in workers

State Audit has requested additional funds in next year’s budget to invest in employees, as head of the institution Elita Krūmiņa mentioned in an interview to Latvijas Radio.

Nearly half of children born in Latvia in 2017 were delivered by mothers with higher education

20,828 children were born in Latvia in 2017. Almost half of them were born to mothers having higher education. Out of the total number of newborn children mothers, 7,229 or 34.7 % had acquired upper secondary general or vocational education and 2,775 or 13.3 % had basic education or lower.

«Steel Magnolia» named Lithuania's most influential politician for fourth consecutive year

Lithuanian President Dalia Grybauskaitė, dubbed as «Steel Magnolia» by foreign press, remains the most influential politician in the country for the fourth consecutive year. In two separate polls, one by the popular ratings magazine Reitingai and the other by pollster Spinter Tyrimai, she appeared on top, being followed by Saulius Skvernelis, Prime Minister, Ramūnas Karbauskis, the leader of the ruling Lithuanian Farmers and Greens Union (LFGU), Valdas Adamkus, ex-president, and Vytautas Landsbergis, Lithuania's first post-independence leader.

Ex-director: Rundale Castle Museum should be managed with the same ideals as before

In the years to come Rundale Castle Museum should be managed with the same ideals as before, says the soon ex-director of the museum Imants Lancmanis, who intends to retire at the end of this year.

Star Rating determines the best schools in Latvia

According to the 2018 Star Rating, Riga State Gymnasium No.1 remains in the lead among Latvia’s schools. Daugavpils Russian Secondary School – Lyceum is second, and Riga State Gymnasium No.2 is third.

ABLV Bank assets worth EUR 21.052 million were recovered in July

Liquidators of ABLV Bank have recovered assets worth EUR 21.052 million in July. This includes EUR 11.602 million recovered from issued loans, EUR 7.644 million from recovered/sold securities, EUR 1,792 million from loans provided to credit institutions, and EUR 14,000 from sales of real estate and other types of property, according to the account published in Latvian Herald.

Concerns over Turkish crisis cause world stock market decline

Stock prices around the world took a massive dive on Wednesday, 15 August, as concerns over Turkish crisis’ possible influence and investors’ attempts to get rid of risky assets surfaced again.

Election commission receives word some candidates’ possible non-compliance with the law

Latvia’s Central Election Commission has received information regarding possible non-compliance of multiple deputy candidates with requirements of the Saeima Election Law, says CEC chairman Arnis Cimdars.

African swine fever found in domestic pigs in Saldus; inspectors investigate illness in Unguri

African swine fever has been found in domestic pigs in Saldus Country’s Zaņa Parish. The infection was found in four domestic pigs. It cannot be excluded that ASF may have entered SIA Druvas Unguri farm’s pig enclosure along with sawdust or cars, as reported by Food and Veterinary Service Public Relations Office manager Ilze Meistere.

Lithuania lays symbolic rail on restored Mažeiķi–Reņģe railway line

Lithuania’s Lietuvos geležinkeliai railway company’s director general Mantas Bartuška and Polish oil concern Orlen manager Daniel Obatjek laid a symbolic rail on the restored railway route connecting Orlen Lithuania owned Mažeiķi oil processing plant in Lithuania and Reņģi in Latvia this Tuesday, 14 August.

Unemployment level in Latvia down to 7.7% in Q2 2018

In Q2 2018 Latvian unemployment rate constituted 7.7 %. Compared to the previous quarter, unemployment rate fell by 0.5 percentage points, while over the year it dropped by 1.2 percentage points.

Saeima approves stricter requirements for fast loans

On Tuesday, 14 August, Saeima’s Economic Committee supported in the second reading amendments to the Consumer Rights Protection Law. The legislative draft states that total loan costs that exceed 0.07% a day from the loan amount are unacceptable and non-compliant with good practice, as reported by Saeima press-service.

Noord Natie develops a new business niche – attracts cruise ships for Ventspils

The first of the cruise ships attracted from SIA Noord Natie Ventspils Terminals will arrive at Ventspils port this week. NNVT stresses that development of cruise business as a new product will help develop tourism in the city and region, as well as provide a contribution to economic development and raise recognition of NNVT terminal and the city.

Culture Ministry announces open contest for post of director of Rundale Castle Museum

Latvia’s Culture Ministry invites contenders to apply for participation in an open contest for the post of director of Rundale Castle Museum. Contenders can submit their applications before 14 September.

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