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Wednesday 16.01.2019 | Name days: Lida, Lidija
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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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Ministry fails to coordinate decision regarding Riga City Council’s dismissal

On Tuesday, 15 January, Latvia’s Environment Protection and Regional Development Ministry failed to coordinate the latest redaction of the decision project On the Dismissal of Riga City Council, because the Latvian Association of Local and Regional Governments and Latvian Association of Large Cities objected it.

UK rejects Brexit deal, May faces no-confidence vote

British Prime Minister Theresea May hopes to overcome a vote of no confidence in her government, following the rejection of her Brexit deal in the UK Parliament.

Is polygamy the answer for Latvia? «Demographic affairs expert» Parādnieks is the man for the job!

The government formation process in Latvia is progressing slowly and painfully. It is as though a ship without navigation – Latvia has yet to find its way in the ocean of political roads. And this ocean I full of «icebergs» Latvia keeps bumping against. The latest one is National Alliance’s official candidate, an «expert» at resolving demographic problems Imants Parādnieks.

Latvian government approves unified requirements for road and street construction quality

On Tuesday, 15 January, Latvian government approved a project of rules from the Cabinet of Ministers. The goal of this project is ensuring rational use of public funds for road and street construction.

Strike in German airports cancels hundreds of flights

Several hundred flights have been cancelled in German airports on January 15, because of strike as part of an airport worker wage dispute. Germany's powerful Verdi union has announced the strike would last from 02:00 am until 8:00 pm local time at the airports of Frankfurt, Munich, Hanover, Bremen, Hamburg, Leipzig, Dresden and Erfurt.

Saeima proposes applying labour protection requirements for topical employment trends

Considering the emergence of new forms of employment, when work is often performed remotely outside company premises, it is necessary to adapt labour protection requirements.

Opinion: final decision for next Daugavpils mayoral candidate is not yet made

Although on Thursday, 17 January, Daugavpils City Council plans to elect a new mayor and Andrejs Elksniņš is mentioned among the candidates, the final decision has yet to be made, claims former mayor Rihards Eigims, who was dismissed in November.

Tallinn Port sees record passenger number of 10.6 million

Estonia's largest passenger port in Tallinn has registered 11th year of growth in passenger numbers as the year 2018 has ended with a total of 10.6 million passengers.

Additional funding requested for continuation of publication of KGB files

Constitution Protection Bureau’s Centre for the Documentation of the Consequences of Totalitarianism requests additional funding of EUR 51,976 to continue financing the digitization of remaining KGB files before 30 April.

Latvian authorities announce influenza epidemic in the country

Last week, the number of patients with flu in Valmiera reached the threshold of an epidemic – 163.6 cases per 100,000 residents. With that, 15 January was declared the beginning of an influenza epidemic in Latvia, BNN was told by Disease Prevention and Control Centre.

Government declaration proposals may cost Latvia EUR 600 million this year

If all proposals submitted for the government declaration were to be implemented this year, it would require an additional amount of EUR 660 million, prime minister candidate Krišjānis Kariņš told journalists.

Stabbed Polish mayor dies

In Poland, the long-time mayor of Gdańsk Paweł Adamowicz has died after doctors were unable to save him following a knife attack during a charity event.

Police: cocaine shipment from Ecuador was not meant for Latvian market

The shipment of cocaine sent from Ecuador and intercepted in Koknese was likely not meant for Latvian market, says Chief of State Police Main Criminal Police Department Andrejs Grišins.

Forming government in Latvia may develop new Local Governments Law

Prime minister candidate Krišjāņis Kariņš’s formed government could develop a new Local Government Law, according to information compiled for government declaration ideas from members of the work group.

«Osinovskis’ million» case: Elksniņš requested money «for KNAB»

Several years ago there was a scandal caused by the announcement made by the now former investigator of Corruption Prevention and Combating Bureau (KNAB) and now Saeima deputy Juris Jurašs that he was offered a two million euros bribe in the LDz corruption case.

Businessman Martinsons’ fast loan company’s paid interest compost most of Ameriks’ income

A month ago, Corruption Prevention and Combating Bureau performed 30 searches and detained 7 people as part of an investigation of possible corruptive activities at Rīgas satiksme. Among those people is Honour to Serve Riga political party member Aleksandrs Krjačeks.

Bank: this year’s priority will be restoring finance sector’s reputation

This year’s priority will be ensuring sustainable development and restoration of the finance sector’s reputation, says chairman of Baltic International Bank Viktors Bolbats.

Weather in Latvia to be chilly and windy this week

Weather will be volatile in Latvia this week – a reasonable amount of thaw along with chilly air is expected. Latvia’s State Environment, Geology and Meteorology Centre predicts strong wind and plenty of precipitation.

Week in Lithuania. Ruling LFGU initiates referendum to reduce number of MPs

Members of the ruling Lithuanian Farmers and Greens Union will collect signatures for a referendum to reduce the size of the parliament.

BNN summary of the week: Latvian government’s plan; minister vs. mayor; politologist in the parliament?

BNN offers a summary of this week’s topical news in a variety of categories: Government; Conflict; Announcement; Proposal; Support; Opinion; Fight.

New Unity’s candidate to offer partners to sign Fiscal Pact

New Unity’s prime minister candidate Krišjānis Kariņš intends to offer partners of the government to sign a Fiscal Pact, which, among other things, proposes not supporting raising or introducing any new taxes this year.

Latvia’s forming government’s priorities include minimal wages and schools

Among the priorities of Latvia’s forming government is the administrative territorial reform, strengthening of the national economy, reformation in education and healthcare, «uncompromised rule of law», state security, cooperation with diaspora and demography, according to information LETA.

Inflation in Latvia reached 2.6% in December 2018

Compared to December 2017, the average level of consumer prices rose by 2.6 % in December 2018. Prices of goods increased by 2.3 % and prices of services by 3.1 %. Compared to 2015, in December 2018 consumer prices were 6.4 % higher.

Orbán seeks anti-immigration sentiment dominance in EU institutions

Hungary' s Prime Minister Viktor Orbán has stated the his country's goal was to have «anti-immigration forces» in the majority in every European Union institution as the spring European Parliament election nears.

Delays with state budget may put at risk EP elections in Latvia

Delays with approval of the country’s state budget could put at risk residents’ ability to vote in upcoming European Parliament elections at any election site, Diena reports with reference to concerns voiced by Central Election Commission’s chairman Arnis Cimdars.