Weekly News Update: October 15th - 21st, 2018

Good morning everyone, and welcome to the another far too late edition of Latvia Weekly. Quite a lot happened last week, and surprisingly little in the realm of politics as coalition talks have seemed to have reached a temporary stalemate as many expected they would coming out of October 6's thrilling election. In terms of weather, this has been the most ideal autumn imaginable with daytime temperatures at least in the double digits (Celcius) throughout most of the week and trees having changed to a brilliant array of color, especially in the heavily travelled Sigulda area. However, with all of the leaves nearly fallen, and temperatures have dropped over the course of the last few days, and we should be seeing some pretty consistent rain over the next few days that will make things feel like a "true Latvian autumn." Before we inevitably get to the latest in politics, we have to start on one very sad note.

Valters Frīdenbergs dies of cancer at age 30

Tributes poured in throughout the week for 30-year-old former top-5 Eurovision finalist and host of the kids TV quiz show Gudrs, vēl gudrāks Valters Frīdenbergs, who tragically passed away on Thursday after a year-long battle with cancer. The news comes as a surprise, as NRA had just published an extensive interview with Frīdenbergs at the beginning of the month in which the TV star seemed to be somewhat recovering after fans raised thousands of euros to send him to a top treatment facility in Germany last year. For a retrospective on Frīdenbergs' life, you can play the video above produced by LTV who employed him as host of Gudrs, vēl gudrāks. A ceremony will be held for him this Friday, October 26th, which would have been his 31st birthday. 
Sources: TVNETDiena, Jauns.lv

Coalition talks continue into a second week with no clear result in sight

Flag of the Prime Minister of Latvia
As we reported on Saturday in our weekly roundup of the coalition talks, not much earth-shattering happened in the second week of negotiations between parties since October 6's election. Political analysts have increasingly speculated that Artis Pabriks (Attīstībai/Par!) has the likeliest chance of becoming the next prime minister. Pabriks was one of three short list candidates invited by President Raimonds Vējonis to submit documents for a security clearance, the others being Jaunā konservatīvā partija's Jānis Bordāns and KPV LV's Aldis Gobzems. For a complete breakdown of the previous week's developments you should check out our guide here, and for an overview of all the candidates you can check out this guide here.

Draft 2019 budget approved by government

An infographic released by the Ministry of Finance to explain the 2019 budget
On Monday, the outgoing Cabinet of Ministers approved the Finance Ministry's €9.205 billion ($10.55 billion) draft 2019 state budget. The spending plan will only exceed projected budged revenue by €27 million, which will not significantly impact government debt which will stay at 38.5% of GDP, less than half the Eurozone average of 84.1%. Defense spending will be 2% of GDP as required by NATO, and will fund increases for education and medical professionals' salaries. When announcing the budget, the ministry pointed out positive economic indicators such as more than 4% growth to Latvia's GDP and decreases to unemployment, but economic research released by regional banking giant Swedbank this week cautioned that steps should be taken in order to not repeat the "overheating" that occurred before the 2008 financial crisis. In comparison with the other Baltic countries, it is less than both Lithuania's planned 11.68 billion budget and Estonia's 11.31 billion 2019 spending plan. For you Americans out there, this budget is roughly the same as Alaska's $10.1 billion 2018 budget, and just a fraction of the United States Federal Government's $4.094 trillion 2018 budget.

New "Diaspora" law up for final vote on November 1st

A new law that would broaden the definition of "Latvian diaspora" and implement new measures to foster migration back to Latvia as well as state support to Latvians abroad has made its way out of a committee and is ready to be voted on by Saeima on November 1st. While there were some objections in the by certain nationalist committee members from the Nacionālā apvienība (National Alliance) and Zaļo un Zemnieku savienība (Union of Greens and Farmers) parties who did not want to see the definition of "diaspora" expanded to Latvia's non-citizens with grey passports since the collapse of the Soviet Union, supporters believe the bill is badly needed as Latvia lacks a coordinated policy to help people re-settle after living abroad.
Sources: LSM, Skaties.lv

Anti-corruption chief suggests ban on all internet campaign ads month before election

Jekabs Straume, head of the country's anti-corruption bureau (KNAB) suggested on Thursday that the country ban all political advertising on the internet for the entire month-long period before the election, including on social media websites such as Facebook and YouTube. This potential ban would not outlaw campaigning, only the kinds of paid "sponsored ads" that one sees in the side of their browser or before watching a video on YouTube. While such a measure might seem extreme to Americans who are used to being bombarded with campaign ads right up to election day, many European countries already heavily restrict TV advertising in the time before elections. 
Source: LSM

State Police official suspected of money laundering

Photo Credit: Marco Verch, via Flickr
LSM reported on Monday that a yet-unnamed former top ranking State Police official has been identified by the country's tax service (VID) as being involved in a 12-person group that used a series of dummy companies from July 2016 to September 2018 that scammed the country out of at least €3 million in tax revenue. The group also reportedly was involved in pan-Baltic money laundering, and cooperated with another criminal group active in the wholesale florist business. VID has already initiated criminal proceedings, and more information will soon follow.
Source: LSM

Former ZZS MP Kļaviņš fined for corruption

Photo Credit: Saeima, via Wikimedia Commons
Former Member of Saeima (parliament) Aksolds Kļaviņš (ZZS) has been slapped with a nearly €10,000 in fines and 120 hours of community service for illegally using taxpayer-provided fuel money intended for parliamentarian's travel from work to home to help fund his online sports equipment business. The scandal ballooned over the summer when it was alleged that Prime Minister Maris Kučinskis (ZZS) knew about the classified investigation due to his access to privileged information as the head of government, and warned fellow party members about it ahead of an election. ZZS lost 10 seats in the most recent elections two weeks ago, and Prime Minister Kūcinskis is not expected to retain his position as the next government's leader.
Source: LSM

Latvian Banks Fined by the FKTK

Two Latvian banks received notices of fines October 19th from the country's Financial and Capital Markets Commission (FKTK). The €2.2 million fine given to LPB bank is considered severe, whereas AS “Meridian Trade Bank” received a less stiff penalty of €14,200 for not drafting or submit an audited annual report for 2017. LPB bank, on the other hand, was punished for a slew of incidents including failing to obtain documentation of fund origin in a timely manner and ensuring customer due diligence. The FKTK carried out different inspections until late August of this year on consumer transactions conducted at LPB. Further, the FKTK Chairman, Pēters Putninš sternly warned other market participants that system deficiencies and weaknesses will not be tolerated in Latvian banks. These new fines for the two banks come after FKTK imposed sanctions on the LPB bank in 2016 for breaches of anti-money laundering and counter terrorist funding. They were cited at the time to also have a lack of control within the internal system. These are similar to the FKTK’s findings and impositions from the past week. LPB will now have to file an action plan that can demonstrate how the bank will tackle the elimination of weaknesses and deficiencies. Additionally, LPB will also have to partake in an independent audit of compliance and efficiency of their internal system. If substantial action is not taken, similar violations could occur. Both of the banks have been known as problematic within Latvia’s banking sector. Although LPB has previously claimed to be adhering to a new business plan, these fines will surely call this claim into question. 
Source: LSM

USA sanctions another Latvia-linked company for dealings with North Korea

Sia Falcon Logo
The "company's" logo from its website

Following the surprise collapse of ABLV bank this February after the United States Department of Treasury threatened to lock it out of the financial system for alleged money laundering tied with North Korea, a sketchy, seemingly Turkish operation registered legally as a Latvian firm called SIA Falcon International has now been targeted by America for apparently arms trading with Kim Jong Un's regime. The company has an "Istanbul Office" listed on its website as well as a "Rīga office" with an address in a small countryside municipality nearly 40 kilometers from the capital. When LSM and Bloomberg News tried calling the company's numbers, there were no responses.
Source: LSM

Engineer partially blames 2013 Maxima roof collapse tragedy on fire during construction

Photo credit: Valenciano, via Wikimedia Commons
As part of his testimony during a court case this week, HND Grupa engineer Ivars Sergets offered his belief that a fire during the construction of the "Maxima XXX" supermarket that collapsed tragically in November, 2013 in the Rīga neighborhood of Zolitude likely weakened the steel beams and was one of the major factors that contributed to the catastrophe along with water collected on the roof and construction materials that had been left on top. Sergets is on trial as his signature is found on documents that were signed and approved the steel structure for the building, but the engineer claims that he never signed the documents and had nothing to do with that aspect of the planning or construction.
Source: LSM

Cycling activists picket Rīga city council

Wednesday's Story of the Day: Around 100 cyclists picketed outside of Rīga city council in protest of the municipal government's widely criticized perceived lack of commitment to improving cycling infrastructure, especially after a major reconstruction project on one of the city's busiest roads this year. Vice-Mayor Andris Ameriks addressed the crowd which demanded more bike lanes to make travel safer for the city's steadily growing amount of cyclists.
Source: LSM

Rīga airport getting busier

Photo Credit: MOs810, via Wikimedia Commons
According to an announcement by Riga International Airport (RIX) on Monday, nearly 17% more passengers travelled through the Baltic nations' busiest airport through the first nine months of this year than they did from January to September 2017. Nearly 22% more cargo was also handled during that time span compared with last year, although this September cargo 12.5% less cargo than September 2017.
Source: LSM

New Latvian encyclopedia unveiled Thursday

Promotional picture from the National Library of Latvia
A print version of the new Latvian National Encyclopedia, the first of its kind in 30 years as well as the first to be published since the end of Soviet times, was unveiled at the National Library in Rīga today. The 864-page volume which took four years to complete will be available in full online starting December 18th.
Source: LSM

€55m Lidl Center announced for Rīga 

The German supermarket chain Lidl announced on October 19 that they had started planning for a new €55 million logistics center with the Latvian Merks construction company. the center will be on Ulbrokas street in Rīga and reportedly be one of Baltics’ most modern, advanced, and technological centers of their kind. Costs for construction will be €42.5m for the 47,000 square meter building. A further €15 will be spent on acquiring equipment of the project. Radostin Roussev-Peine, the head of Lidl’s Lithuanian branch, stated during the announcement that establishing Lidl Latvija is a commitment for partnership into the future, and Minister for the Economy Arvils Ašeradens said Lidl's entry into the Latvian market testifies that Latvia belongs to a part of the world which is known for its economic growth, activity and productivity. Construction is said to be finished in 2020. Lidl also plans on opening 10 Rīga stores, and claims that there will be 1700 new jobs in the city altogether.
Sources: LSM, Skaties.lv

And that's all for this week! We're so sorry for the extreme delay this time around, and we promise to be back on schedule for this upcoming Sunday. In the meantime, please make sure to hit "subscribe" at the top of your page so that you'll know exactly when the next edition will be out, as well as any other special articles that we put out. Also, you can "like" us on Facebook for top "stories of the day" at the end of each evening. Take care, and stay dry!