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Monday 17.02.2020 | Name days: Konstance, Donats
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KNAB has not handled a single criminal case about potential corruption at Latvian ports

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KNAB, corruption, crimes, port, sanctions, importantThroughout its entire existence Latvia’s Corruption Prevention and Combating Bureau (KNAB) has never had a criminal process regarding possible corruption at any of Latvia’s ports.

It is publicly known that there are only two criminal processes commenced several years ago for crimes of officials at ports. Both are related to Riga ports and remain under investigation by State Police.

One case is currently in the process of appeal. It is focused on abuse of official power by the now ex-CEO of Riga Freeport Leonīds Loginovs and his vice Aigars Pečaks. The case is in appeal because the Supreme Court of Justice cancelled the ruling of Riga Regional Court in the section regarding the two of them being found guilty of abuse of official power, as well as the section regarding the size of compensation for damages caused.

Read also: Ventspils Freeport Authority removed from US sanctions’ list

On 19 September 2018, Riga Regional Court declared Loginovs and Pečaks guilty and ordered them to repay illegally spent finances worth EUR 856 951, as well as fined Loginovs for EUR 45 600 and Pečaks for EUR 34 200 for abuse of official power. The regional court stated in its ruling that Loginovs is to pay back EUR 207 856 and Pečaks – EUR 378 750 – of illegally spend finances. Both have to payback EUR 270 345 in solidarity, as well.

The criminal case against the two of them was launched for abuse of power through illegal donations and illegal payment of bonuses, which caused serious consequences. Both deny their guilt in the crimes they are accused of.

After and audit performed several years ago at Riga Freeport, State Audit turned to law enforcement institutions over multiple violations uncovered at the freeport. State Audit noted that considerable losses were caused as a result of the freeport’s unreasonable expenditures.

In 2016 it became known that State Police Economic Crimes Enforcement Unit commenced another criminal process in relation to possible criminal violations at Riga Freeport. The case was commenced based on conclusions made by the State Audit. There are no suspects to speak of.

This case revolves around possible negligence from state officials that caused serious consequences. State Police press-representative Gita Gžibovska said the investigation still continues.

Previously State Audit found that Riga Freeport authority had wasted approximately EUR 611 888 on outsourcing service providers by paying them for services that are the freeport’s official duties.

The audit also revealed additional expenditures in relation to construction of a warehouse. In 2009, Riga Freeport authority’s construction project for construction of Krievu Island infrastructure. In 2011, the service provider was issued a construction permit for open-type warehouse construction on a piece of land on Zilaja Street. According to Riga Freeport Authority, officials had failed to perform the duties outlined for them in regulations, thereby allowing construction of unrelated business entity’s structure on the territory picked for the warehouse.

It was necessary to clear the territory for the project’s implementation by moving the constructed building – open-type warehouse – to elsewhere. This cost Riga Freeport authority EUR 1 012 467, which is considered as damages caused by negligence of port officials.

Additional expenditures appeared because of the loan contract between Riga Freeport authority and credit institutions for the project Infrastructure Development at Krievu Island for relocation of port operations from the city centre. The agreed upon loan size for the project was EUR 80.2 million.

On December 9, the OFAC, based on the so-called Magnitsky law, imposed sanctions on a number of persons and their organizations in Europe, Asia and Latin America, including on Aivars Lembergs.

In response to Ventspils Freeport’s addition to the list of sanctions, Latvia’s Saeima amended laws to put both Riga Freeport and Ventspils Freeport under state management. On 17 December the government supported Transport Ministry’s proposal to create a new state company to manage Ventspils port’s territory and operations.

On 18 December, OFAC announced removal of sanctions from Ventspils Freeport and Ventspils Freeport authority.

Sanctions were removed from Ventspils Freeport after Aivars Lembergs stepped down from the freeport’s board and Latvian government executed measures to put an end to his influence over the court, according to the press-statement from the US Department of the Treasury.


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