SIA ACA Timber, an international timber trading and logistics company backed by Latvian, Swedish and German investors, expresses serious concern regarding the potential termination of long-term logging agreements (LLA) with AS Latvijas valsts meži. Such action would be inconsistent with the principle of legitimate expectations and would pose significant risks to Latvia’s investment climate.
In 2025, the shareholders of ACA Timber acquired SIA Metsa Forest Latvia, a substantial portion of whose assets consisted of valid long-term logging agreements with AS Latvijas valsts meži. The transaction was completed on 2 June 2025, following merger clearance granted by the Competition Council. At no point during the merger review process, nor thereafter, did ACA Timber receive any objections or indications that the long-term agreements were unlawful or potentially incompatible with competition law.
“In our view, any issues relating to the application of competition law must be addressed through a lawful, transparent, and duly substantiated process. In 2025, we completed the acquisition in reliance on a stable, predictable, and rules-based business environment in Latvia, as well as on the due observance of valid contractual obligations – particularly by the State and state-owned enterprises. We have approached the Foreign Investors’ Council in Latvia to ensure that the matter is assessed from the perspective of investment protection,” said Armands Apfelbaums, Chairman of the Management Board of ACA Timber.
ACA Timber emphasizes that its investments were made based on legally binding agreements and the formal approval granted by the competent authority. Accordingly, the company and its investors relied on the stability and consistency of decisions adopted by public authorities – a core element of the rule of law.
The principle of legitimate expectations holds that businesses and investors are entitled to rely on the legality and consistency of decisions taken by public authorities, particularly where substantial investments and long-term commitments are undertaken in reliance on such decisions. A sudden departure from a previously accepted legal framework would create serious uncertainty in the business environment and could negatively affect foreign investor confidence in Latvia.
ACA Timber further notes that, under Latvian Civil Law, legally concluded agreements must be performed. Any unilateral withdrawal by the State or a state-owned enterprise from valid contractual obligations, absent clear legal grounds, would not only result in significant financial consequences but also pose reputational risks for Latvia as a secure and predictable investment destination.
ACA Timber urges the responsible authorities to ensure a consistent and predictable legal framework, in line with the principle of legitimate expectations and the stability of state commitments.
