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Friday 21.02.2020 | Name days: Eleonora, Ariadne

USA: de-listing of Ventspils Freeport was possible thanks to Latvian government’s active work

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Ventspils Freeport, Aivars Lembergs, corruption, sanctions, OFACThe sanctions US Department of the Treasury Office for Foreign Asset Control (OFAC) were lifted after the suspended Mayor of Ventspils Aivars Lembergs, who is also accused of committing serious crimes, stepped down from the freeport’s board and the Latvian government performed actions to end his influence there, according to the latest press-release of the US Department of the Treasury.

After Lembergs and Ventspils Freeport were listed among entities under sanctions, Latvia’s government adopted regulations that basically put an end to Lembergs’ control over Ventspils Freeport authority. In accordance with new regulations, four Latvian government representatives were appointed to supervise the port, as the press-release from US Department of the Treasury details.

Lembergs stepped down from Ventspils Freeport authority on 10 December, which is on the next day after being added to the black list, the department outlines.

«The U.S. applauds the Latvian government’s swift response to Lembergs’ designation.  This de-listing of the Ventspils Freeport Authority underscores our commitment to work closely with our partners to combat corruption,»

stresses Deputy Secretary Justin Muzinich.

As previously reported, on Wednesday, 18 December, OFAC removed sanctions imposed on Ventspils Freeport and Ventspils Freeport authority.

This decision was made by USA after intensive talks with Latvia’s embassy in USA, Foreign Affairs Ministry and other institutions and after surveying Latvia’s performed and planned actions aimed at preventing the influence of blacklisted entities over Ventspils Freeport and Ventspils Freeport authority.

«This means Ventspils Freeport authority, Ventspils Freeport and companies active at the port are able to continue operations unhindered,» says Latvia’s Foreign Affairs Ministry.

Read also: Freeport authority: Ventspils port has returned to operating normally

At the same time, OFAC has not removed sanctions against Lembergs, Ventspils Development Agency, Business Development Association and Latvian Transit Association.

On 9 December, US Department of Treasury Office for Foreign Asset Control used the so-called Magnitsky Law to impose sanctions on the suspended Mayor of Ventsils Aivars Lembergs, who is accused of committing serious crimes, and four legal persons associated with him – Ventspils Freeport authority, Ventspils Development Agency, Business Development Association and Latvian Transit Business Association.

On Wednesday, 18 December, Ventspils Freeport authority was excluded from the list of OFAC sanctions.

After 8 January, 2020, no financial operations with legal persons under sanctions will be possible, because banks will not service them any longer. Lembergs will be able to maintain one account to use for transactions needed to cover basic needs (receive pension, pay taxes and duties, purchase food, pay for rent or mortgage, public utilities, etc.).

Sanctions also apply to companies controlled by Lembergs or companies in which he is listed as beneficial owner.

State institutions and lawyers recommend avoiding working with persons and organizations included on the list of sanctions. Cooperation with persons under sanctions puts participants at risks of secondary sanctions or other forms of limitations.

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 the next morning after removal of sanctions for Ventspils Freeport, Latvian Transport Minister Tālis Linkaits told Latvijas Radio reported that the decision regarding the cancellation or continuation of the foundation process of Ventas osta state company will be made after studying the reasons behind OFAC decision.

«It is logical to believe that such a structure is no longer needed, but first we want to know what considerations went into the foundation for the US side’s decision [to lift sanctions from Ventspils Freeport authority], so that we avoid a situation when we cancel something that served as the main reason why OFAC made its decision,» said Linkaits.

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