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YEAR 2008 LEGAL NEWSLETTER
LATVIA Bankruptcy On June 13, 2008 the Latvian Parliament, the Saeima, adopted amendments to the Law On Insolvency of Undertakings and Companies. The Amendments provide that an administrator in an insolvency proceeding may only be a natural person with a higher education in law, economics, management or finance or a person who has had at least three years of practical work experience in the executive bodies of Latvian companies and who has received an administrator’s certificate issued by the Insolvency Agency. The Insolvency Agency is a State institution established by the Law that supervises Latvian insolvency proceedings. The Amendments entered into force on July 1, 2008. The State Gazette, Latvijas Vestnesis, June 21, 2008, issue No. 94.
Civil Procedure On October 31, 2008 the Saeima adopted amendments to the Law on Civil Procedure. The Amendments introduce important new provisions regarding the hearing of a case without the presence of a respondent, inheritance proceedings and other important areas of civil procedure. An important change concerns representation of parties in court. Since the entry of the amendments into force, companies may be represented in court proceedings only by sworn advocates, their officers or employees, or by persons who are factually in charge of a company’s property on the basis of a power of attorney. The Law entered into force on January 1, 2009. The State Gazette, Latvijas Vestnesis, November 20, 2008, issue No. 169.
Company Law On September 3, 2008 the Cabinet of Ministers adopted Regulations �On the Procedure for Registration of Representative Offices and Representatives of Foreign Entrepreneurs and Organizations�. According to the Latvian Commercial Law, a representative office is one of the legal forms by which foreign companies may establish themselves in Latvia. A representative office does not have the right to carry on business activities. Under the new Regulations, in order for a representative office to commence its activities, it must present to the Latvian Enterprise Register the following documents:
The Regulations remove the restriction on registering a representative office for a definite period of time with an option to extend. With the entry into force of the new regulations, a representative office may operate without limitation as to term, unless such provides for a specific term in the application documents. Already existing representative offices may re-register without difficulty by submitting an application prior to the expiration of their permit. The Regulations entered into force on October 1, 2008. The State Gazette, Latvijas Vestnesis, September 06, 2008, issue No. 127.
Consumer Protection On May 28, 2008 the Saeima adopted Regulations on the Procedure on a Claim by a Consumer in Respect of Contractually Non-Complying Goods or Services and Arranging an Expertise Regarding Goods and Services. The Regulations set forth the procedure for filing a claim regarding non-complying goods or services. Under the Regulations, a consumer may file a claim with a producer, seller or provider of services. A claim may be filed either verbally or in writing. A producer, seller or provider of services must inform an applicant as to the decision regarding the application within 3 days. The Regulations entered into force on May 31, 2008. The State Gazette, Latvijas Vestnesis, May 30, 2008, issue No. 81.
Courts On October 24, 2008 the Saeima adopted the Bailiffs Law. The main policy behind the Law is to make the execution of court judgments easier and more professional. According to the Law, bailiffs shall perform their activities in certain specific territorial districts determined by the Ministry of Internal Affairs. A person seeking to execute a judgment may turn to any of the bailiffs practicing in the territory of a relevant District’s Court territory. A bailiff may not refuse to execute a judgment if it relates to his or her district. The new law provides for stricter qualifications for bailiffs, including higher education and legal work experience. The Law entered into force on January 1, 2009. The State Gazette, Latvijas Vestnesis, November 13, 2008, issue No. 165.
Customs Law On May 22, 2008 the Saeima adopted amendments to the Customs Law. The amendments introduced several new terms (e.g. customs regime, free warehouse). They also amend the definitions of several concepts including, but not limited to origin of goods, free zone, customs regime and temporary import. The Law entered into force on June 5, 2008. The State Gazette, Latvijas Vestnesis, May 22, 2008, issue No. 76.
On June 18, 2008 the Cabinet of Ministers adopted Regulations entitled The Rules on Compliance with Customs Procedure Export. The Regulations the export procedures and determine the cases in which the goods exported from Latvian customs territory must not be declared. The Regulations entered into force on July 1, 2008. The State Gazette, Latvijas Vestnesis, June 21, 2008, issue No. 94.
Electronic Documents On October 31, 2008 the Saeima adopted the Electronic Documents Law. The Law defines the legal status of electronic documents and of electronic signatures. Its purpose is to ensure that electronic documents and electronic signatures have the same legal force as traditional paper-based documents and hand-written signatures. According to the new law, an electronic signature is data in electronic form that is attached to, or logically associated with, the electronic document and which serves as a method of authentication of an electronic document and of the signatory’s identity. In order for an electronic document to have legal force it must be signed with an electronic signature which
A qualified certificate is issued to a person in order to certify his or her ownership of an electronic signature. Such certificate is issued by a certification service provider. According to the Law, a certification service provider may be a natural or legal person accredited by the Latvian State Data Inspectorate and must fulfill other requirements set forth by the Law. The Law obliges certification service providers to possess mandatory civil liability insurance for a minimum amount of money specified by the Latvian Cabinet of Ministers. The new law is not applicable to:
The new law will ease business transactions and obtainment of documents and permits from State and municipal institutions. It is important to note that although the Electronic Documents Law entered into force on January 1, 2009, it obliges State and municipal institutions to accept electronic documents only after January 1, 2009. The Law entered into force on January 1, 2009. The State Gazette, Latvijas Vestnesis, November 20, 2008, issue No. 169.
Environmental Law On December 20, 2001 the Saeima adopted the Packaging Law. The purpose of the Law is to develop packaging production, introduce advanced packing technologies and establish a rational packaging waste management system thereby reducing the undesirable impact of packaging waste on the Latvian environment. The Law applies to producers of packaging (also importers), packagers, sellers, packaging management undertakings, as well as to State and local government institutions. According to the Law, a packager is a producer of goods, service provider or seller who packs goods, as well as an importer who imports packaged goods or products. The Law introduces the following requirements for packaging:
The Law provides for packagers responsibility for the management of their packaging waste resulting from their activities. In practice this requires, for example, the collection by packagers of their packaging. A packager may perform management of packaging waste itself, establish a packaging management undertaking or enter into a contract with such an undertaking. The Law entered into force on July 1, 2008. The State Gazette, Latvijas Vestnesis, January 9, 2008, issue No. 4.
Labour Law The new Latvian Labor Law entered into force on June 1, 2008. The new law introduces several significant changes to the rights and obligations of an employer and employee. According to the new law, an employment contract may be concluded only for an indefinite period of time except for certain cases provided by Law (e.g. seasonal jobs, employee substitution, etc.) During a trial period, an employer and an employee have the right to terminate a labour contract upon a three-day notice. An employer does not have to provide reasons if an employment contract is terminated on his or her initiative during the trial period. The Law introduces a new requirement that job advertisements must be sex-neutral except for instances in which a specific sex is a precondition for fulfilling job responsibilities. The Law also prohibits discriminatory treatment on the basis of sex in employment relations. Another novelty introduced by the Law is a paternity leave for a child’s father. A paternity leave may be taken for a time not longer than one and a half years. The State Gazette, Latvijas Vestnesis, July 6, 2001, issue No. 105.
On September 26, 2008 the Saeima adopted the Labor Disputes Law. The purpose of the Law is to ensure fast and fair resolution of labour disputes and defines the institutions and procedure for their resolution. According to the Law, labour disputes are divided into:
The new law introduces the right of an employer to use a lock-out as a last resort for the protection of the employer’s economic interests. A lock-out is defined as a refusal by an employer to employ workers and to pay them compensation if a worker’s strike materially affects the business activity of an undertaking. The Law entered into force on January 1, 2009. The State Gazette, Latvijas Vestnesis, October 16, 2008, issue No. 149.
Tax Law On January 1, 2008 the amendments to the Law On Corporate Income Tax entered into force. The Amendments were adopted by the Saeima on November 22, 2001. The amendments provide for a gradual decrease of the corporate income tax in Latvia. The rate of the corporate income tax will become 22% in the year 2008, 19% in the year 2009 and 15% in 2009 and beyond. The State Gazette, Latvijas Vestnesis, December 07, 2001, issue No. 178.
On June 13, 2008 the Saeima adopted amendments to the Law On Excise Tax on Tobacco Products. The amendments increase the current excise tax by introducing a combined rate. According to the amendments, the current rate of 5.8 LVL for 1, 000 cigarettes will be supplemented by 1.8% of the tax based on a maximum price charged for a relevant brand of cigarettes. The Amendments entered into force on July 1, 2008. The State Gazette, Latvijas Vestnesis, June 21, 2008, issue No. 94.
Latvia Multilateral Agreements Environment On May 30, 2008 the Saeima adopted the Law ratifying the Kyoto Protocol to the United Nations Framework Convention on Climate Change of May 9, 1992. The Law entered into force on June 13, 2008. The State Gazette, Latvijas Vestnesis, June 13, 2008, issue No. 89. On September 19, 2008 the Saeima adopted the Law On the Convention Abolishing the Legalisation of Documents in the Member States of the European Communities. The State Gazette, Latvijas Vestnesis, October 9, 2008, issue No. 145.
Terrorism On October 24, 2008 the Saeima adopted the Law On the Convention for the Suppression of Terrorist Bombings. The Law entered into force on November 8, 2008. The State Gazette, Latvijas Vestnesis, November 8, 2008, issue No. 163.
On September 26, 2008 the Saeima adopted the Law On the International Convention for the Suppression of the Financing of Terrorism. The Law entered into force on October 9, 2008. The State Gazette, Latvijas Vestnesis, October 9, 2008, issue No. 145.
Latvia Bilateral Agreements Baltic States On June 18, 2008 the Cabinet of Ministers adopted Regulations on Agreement between the Government of the Republic of Latvia, Government of the Republic of Estonia and the Republic of Lithuania on Co-operation in the Field of Tourism. The State Gazette, Latvijas Vestnesis, August 16, 2001, issue No. 117. On December 9, 2008 the Cabinet of Ministers Regulations on the Amendments to the Agreement between the Government of the Republic of Latvia, the Government of the Republic of Estonia and the Government of the Republic of Lithuania on the Mutual Visa - Free Travelling Procedure.
Bulgaria On June 18, 2008 the Cabinet of Ministers adopted the Regulations on the Agreement between the Government of the Republic of Latvia and the Government of the Republic of Bulgaria on Mutual Abolition of Visa Requirements The State Gazette, Latvijas Vestnesis, September 24, 2008, issue No. 136. On December 19, 2008 the Saeima adopted the Law On the Free Trade Agreement between the Republic of Latvia and the Republic of Bulgaria Free Trade Agreement between the Republic of Latvia and the Republic of Bulgaria. The State Gazette, Latvijas Vestnesis, December 28, 2001, issue No. 189.
Estonia On June 20, 2008 the Saeima adopted the Law On the Convention between the Government of the Republic of Latvia and the Government of the Republic of Estonia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income. The State Gazette, Latvijas Vestnesis, July 3, 2008, issue No. 99.
European Communities On September 19, 2008 the Saeima adopted the Law On the Protocol to the Europe Agreement Establishing an Association between the Republic of Latvia, of the One Part, and the European Communities and their Member States, on the other Part, on Conformity Assessment and Acceptance of Industrial Products (PECA). The State Gazette, Latvijas Vestnesis, September 26, 2008, issue No. 138.
The State Gazette, Latvijas Vestnesis, September 26, 2008, issue No. 138. On October 26, 2008 the Cabinet of Ministers adopted Regulations on the Memorandum of Understanding between the Republic of Latvia and the European Community on Latvia’s participation in the Community Programme for the Promotion of Energy Efficiency (SAVE) (1998 to 2008). The State Gazette, Latvijas Vestnesis, January 24, 2008, issue No. 13.
European Free Trade Association On December 19, 2008 the Saeima adopted the Law On the Agreement on Conformity Assessment and Acceptance of Industrial Products between the Republic of Latvia and the Republic of Iceland, the Principality of Liechtenstein, and the Kingdom of Norway. The State Gazette, Latvijas Vestnesis, December 28, 2008, issue No. 189.
Finland On April 17, 2008 the Cabinet of Ministers adopted Regulations on the Amendment to the Agreement between the Government of the Republic of Latvia and the Government of the Republic of Finland concerning the Abolition of Visas. The State Gazette, Latvijas Vestnesis, July 14, 2008, issue No. 90.
Greece On July 20, 2008 the Saeima adopted the Law On the Convention between the Government of the Republic of Latvia and the Government of the Hellenic Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital. The State Gazette, Latvijas Vestnesis, July 3, 2008, issue No. 99.
Hungary On August 6, 2008 the Cabinet of Ministers adopted Regulations on the Amendments to the Agreement between the Government of the Republic of Latvia and the Government of the Republic of Hungary on the Mutual Abolition of Visa. The State Gazette, Latvijas Vestnesis, September 6, 2001, issue No. 127.
Lithuania On February 19, 2008 the Cabinet of Ministers adopted the Regulations on the Agreement between the Government of the Republic of Latvia and the Government of the Republic of Lithuania on the Activities of Authorized Border Representatives. The State Gazette, Latvijas Vestnesis, August 16, 2001, issue No. 117. On June 20, 2008 the Saeima adopted the Law On the Protocol on Amendments and Supplements to the Agreement between the Government of the Republic of Latvia and the Government of the Republic of Lithuania on Cooperation in Checking at the Joint Crossing Posts of the State Border. The State Gazette, Latvijas Vestnesis, July 3, 2001, issue No. 99.
Romania On June 20, 2008 the Saeima adopted the Law On the Convention between the Republic of Latvia and Romania for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital. The State Gazette, Latvijas Vestnesis, June 3, 2008, issue No. 99. On July 2, 2008 the Cabinet of Ministers adopted Regulations on the Agreement between the Government of the Republic of Latvia and the Government of Romania on Mutual Abolition of Visa Requirements. The State Gazette, Latvijas Vestnesis, August 2, 2008, issue No. 112.
Slovenia On October 24, 2008 the Saeima adopted the law On the Convention between the Government of the Republic of Latvia and the Government of the Republic of Slovenia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital. The State Gazette, Latvijas Vestnesis, October 8, 2008, issue No. 163.
Sweden On January 29, 2008 the Cabinet of Ministers adopted Regulations on the Agreement between the Government of the Republic of Latvia and the Government of the Kingdom of Sweden on Development, Co-operation and Technical Assistance in the Area of Justice and Home Affairs. The State Gazette, Latvijas Vestnesis, February 28, 2008, issue No. 33. On June 14, 2008 the Cabinet of Ministers adopted Regulations on the Agreement between the Government of the Republic of Latvia and the Government of the Kingdom of Sweden Concerning the Protection of Classified Information. The State Gazette, Latvijas Vestnesis, March 19, 2008, issue No. 43.
Swiss Confederation On June 13, 2008 the Saeima adopted the law On the Convention between the Government of the Republic of Latvia and the Swiss Confederation Federal Council for the Avoidance of Double Taxation with respect to Taxes on Income and on Capital. The State Gazette, Latvijas Vestnesis, June 21, 2008, issue No. 94. On May 22, 2008 the Cabinet of Ministers adopted Regulations on the Amendments to the Agreement between the Government of the Republic of Latvia and the Swiss Federal Council on Mutual Abolition of Visas. The State Gazette, Latvijas Vestnesis, July 9, 2008, issue No. 102.
National Elections 2008 On October 5, 2008 national Parliamentary elections were held in Latvia. The newly formed center-right New Era party, led by former central banker Einars Repse, claimed victory with 24% of the votes, giving the party 26 seats in the Latvian Parliament, the Saeima. New Era was followed by the leftist party, For Human Rights in the Unified Latvia, which received 19% of the votes, and 25 seats in Parliament, and by the conservative People’s Party with 17% of the votes and 20 Saeima seats. The other parties to reach the 5% legal threshold for parliamentary representation were the newcomer Christian First Party with 9% or 10 seats; the centrist Green Party Farmers Union with 9% and 12 seats; and the right-wing For Fatherland and Freedom Party with 5% and 7 seats. After difficult negotiations following the elections a center-right coalition of New Era, Green Party Farmer’s Union, First Party and For Fatherland and Freedom Party was formed to hold 55 of the 100 seats in the Latvian Parliament. Einars Repse was elected as the Prime Minister of Latvia.
Latvia and the European Union On December 13, 2008 in Copenhagen, during the European Council meeting, Latvia concluded accession negotiations and was invited to join the European Union. Latvia successfully concluded 31 chapter of the accession talks negotiating 35 transitional periods, one of the largest numbers of transition periods granted to candidate states. Latvia has also accepted the financial package by the EU. The Accession Treaty between Latvia and the European Union was signed in April 2009.
Latvia and NATO On November 21, 2008 Latvia together with Lithuania, Estonia, Slovakia, Slovenia and Romania received an invitation from the North-Atlantic Treaty Organisation to join the Alliance. The historic decision was taken by the Heads of State and Government of NATO countries on the summit in Prague. The invitation establishes the allied relationship between Latvia and the NATO member states. It also culminates Latvia’s strive for security which was one of the main foreign policy’s priorities after regaining independence. Latvia will be officially admitted to the Alliance after all 19 NATO member states will ratify the accession protocol signed with Latvia on March 26, 2009.
NOTE to readers: While every effort has been made to ensure that the information provided in this Newsletter is accurate, such information is not complete and has been abbreviated in a form designed to bring Latvian legal news developments to its reader’s attention. The Law Firm and its partner firms advise the Newsletter’s readers to seek professional legal advice before acting or relying upon any of the information or statements contained.
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