Removal of sanctions from Ventspils Freeport Authority became possible after measures taken by Latvian government - OFAC

  • 2019-12-20
  • LETA/TBT Staff

RIGA - The Office of Foreign Assets Control (OFAC)  removed its sanctions that had been imposed on the Ventspils Freeport Authority after Ventspils mayor Aivars Lembergs (For Latvia and Ventspils) resigned from the the Ventspils Freeport Authority and the Latvian government took measures effectively ending Lembergs' control of the port, it follows from a statement released by the US Department of the Treasury.

Following the designation of Lembergs and the Ventspils Freeport Authority, the Latvian government passed legislation effectively ending Lembergs’ control of the Ventspils Freeport Authority. According to the legislation, the port will be supervised by four representatives appointed by the Latvian government, the  US Department of the Treasury says in the statement.

Lembergs resigned from the Ventspils Freeport Authority on December 10, the day after his designation by OFAC, the US Department of the Treasury noted.

"The U.S. applauds the Latvian government’s swift response to Lembergs’ designation. This delisting of the Ventspils Freeport Authority underscores our commitment to work closely with our partners to combat corruption,” said Deputy Secretary Justin G. Muzinich.

As reported, on Wednesday, December 18, OFAC announced it had removed the Freeport of Ventspils and the Ventspils Freeport Authority from its sanctions list. 

As LETA was told at the Foreign Ministry, the US took the decision after intensive talks with the Latvian Embassy in Washington, the Foreign Ministry and other Latvian authorities and after learning about all the measures Latvia had taken in recent days to put an end to the sanctioned individual's influence in the Freeport of Ventspils and the Freeport of Ventspils Authority.

"The Freeport of Ventspils Authority, the Freeport of Ventspils and the companies operating in the port can thus carry on with their work unimpeded," the Foreign Ministry said. 

As reported, the US Department of the Treasury's Office of Foreign Asset Control (OFAC) on December 9 imposed sanctions on a number of natural and legal persons in Europe, Asia and Latin America, including on Latvia's Ventspils mayor Aivars Lembergs, based on the so-called Magnitsky act.  

OFAC listed four organizations that belong to or are controlled by Lembergs - Vetspils Freeport Administration, Ventspils Development Agency, Business Development Agency, and the Latvian Transport Business Association.

To deal with Lembergs' influence in the Freeport of Ventspils, the government on Wednesday decided to take over the ports of Ventspils and Riga.

It was also reported that Saeima on Wednesday passed in the final reading a bill to turn over the functions of the Freeport of Ventspils to the newly established state-owned joint stock company Ventas Osta (Venta Port). 

The parliament passed amendments to the Law on the Freeport of Ventspils and the Law on Ports. The draft amendments to the two laws were pushed through parliament in a fast-track procedure which only included two readings, both held on Wednesday. 

On Tuesday, the Cabinet of Ministers supported the proposal of the Transport Ministry to established state joint stock company Ventas Osta that will ensure management of the Ventspils port.

Ventas Osta's share capital will be EUR 35,000, while the shareholder will be the Transport Ministry. The new company's voting shares will belong to the Latvian state.

Transport Ministry's acting state secretary Dzineta Innusa said that the legal status of Ventspils Freeport will not be changed.

Transport Minister Talis Linkaits (New Conservative Party, JKP) said that the bill will provide legal certainty to the companies who want to continue their work at Ventpils port.

According to the Transport Ministry, in order to ensure uninterrupted operations of Ventspils port and prevent potential negative consequences on cargo transportation and companies working at the port, the Ventspils Freeport Authority should be separated from the port as a territory.