This content is from: Local Insights

Completion of privatization

Recently parliament has passed the Completion of the Privatization of the State and Municipal Property and Use of the Privatization Vouchers Law, which enters into force on September 1 2005.

Privatization is one of the ways to acquire a company, land or buildings belonging to the state or municipality, or shares or other property of the state or municipality in a private company, next to the ordinary alienation procedure. A number of large companies exist in Latvia in which the state's shares might yet be privatized, such as the telecommunication company Lattelekom. The law exempts only some companies from privatization, such as the state monopoly electricity company, Latvenergo, and the Latvian postal company.

The law provides the final deadline for applications on privatization. A person or legal entity has until August 31 2006 to submit an application to the municipal council or Privatization Agency (which is responsible for state property).

The law also sets the threshold for privatization or property compensation vouchers, which may be used as a partial payment for privatized property. A voucher is dematerialized security, assigned by the state, and such vouchers are still being sold in the securities market. However the government is entitled to decide that, in privatization of specific state companies, the vouchers cannot be used.

The Privatization Agency will prepare a decision on each privatization of a state property within two months of receiving an application, and the government must pass it within four months of the decision.

Another is that the authority will evaluate if the property proposed to be privatized is necessary for the performance of state administration functions or the state or municipality's commercial activities, as provided by the State Administration Law. The authority is entitled to refuse the privatization only if the respective property is required for the state or municipality for these purposes.

Instant access to all of our content. Membership Options | One Week Trial