Latvian Justice Minister Inese Libina-Egnere told the LETA News Agency in an interview that the government is working on amendments to the law on how to manage arrested company shares. This work is being done in the context of complying with recommendations from the Council of Europe Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (Moneyval).
Of particular importance is the fourth recommendation from the Moneyval Financial Action Task Force (FATF), which is titled “Confiscation and Interim Measures.” The recommendation states that countries should have effective mechanisms whereby frozen, seized or confiscated assets can be managed, preserved and, if necessary, disposed of.
As has been reported in the past, Latvia’s Ministry of Justice has not been able to achieve interinstitutional agreement on amendments to the Law on Criminal Procedure. The idea is to entrust the management of capital shares from companies that have been arrested as part of criminal proceedings to an administrator who is authorised by the Cabinet of Ministers. The draft amendments are currently being considered by the Saeima Legal Affairs Committee.
The Latvian Economics Ministry’s Public Asset Manager Possessor has already signalled that it would be ready to take over such functions.
The problem is that there are still no procedures for the management of seized shares and related to the liability of administrators if the value of the managed companies declines. It remains unclear whether and how the Possessor would be able to change the procedures of officials at companies which have been placed under its management.
Work on these amendments began in early 2022, when the Latvian government was dealing in closed session with a report on the management and valuation of assets that were seized in the case of former Ventspils Mayor Aivars Lembergs. The police had launched a criminal investigation of the work of Rudolf Meroni as the administrator of Lembergs’ properties.
Since then, however, the Justice Ministry has proven unable to achieve interinstitutional agreement on draft legislation that could be considered by the Cabinet of Ministers and then forwarded to the Saeima, as would be usual. Instead the ministry has called on the Saeima Legal Affairs Committee to draft its own amendments and to do so on a fast track procedure.
The amendments are necessary to fill in gaps in the law on share seizure. The law currently allows prosecutors who seize shares to require that the relevant enterprise transfer all funds to a specified account.
There are, however, no rules on how such seized shares should be managed, and that might lead to a depreciation in their value. This, in turn, might make it more difficult in future to recover procedural costs and compensation for damages, the ability to return criminally acquired property to its rightful owner, confiscation of criminally acquired property, and confiscation of property as an additional penalty in criminal proceedings.
Source: BNS
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