EU DOSSIER

The Latvian Foreign Ministry will ask Lithuania to explain actions by national border guards who have refused to recognize Latvian-issued insurance policies and insist that Latvian motorists buy Lithuanian insurance. The ministry said that in line with the EU directives Latvian insurance was valid throughout EU territory. Latvia officials will ask their Lithuanian colleagues for explanations after five cases cited in which border guards at different checkpoints made Latvian motorists buy local insurances on May 1 and May 5.

A newspaper in Estonia reported that a prohibition on alcohol advertising would contravene a 2001 European Court of Justice ruling, citing EU laws dealing with competition, that finds such a ban contradictory to EU legislation. A ban on alcohol advertising gives a clear advantage to domestic producers who can promote the sales of their products with lower prices. Without advertising, the market entry of both new producers and products is very difficult. Apart from the Center Party, which initiated the bill, restrictions on the sale and promotion of alcohol are favored by Parliament's social affairs committee.

The Latvian Union of Municipalities has found the implementation of EU fund allocations as insufficient and described the application procedure for cofinancing as "very complicated." The task-force pointed out that local governments have already exhausted the municipal budget's loan limit and will have problems finding money for project implementation. Gints Freimanis, Finance Ministry deputy state secretary, said that raising the limit of municipal borrowings would only increase national debt. He suggested that projects could be financed by the public-private partnership principle with funds contributed by the state, municipalities and private businesses. Municipalities can receive both EU funds and co-financing from the state, but local governments must cover all implementation before they can claim subsidies.

Latvian Finance Minister Oskars Spurdzins has suspended the customs administration chief for poor job performance during the country's accession to the EU. The finance minister said that Martins Tols, head of the general customs administration that is part of the State Revenue Service, was fired because many import-export businesses suffered losses during the first few days of membership. "Regretfully, Mr. Tols did not cope with this task. Many businesses are displeased with customs work," said Spurdzins. Customs officers also complained about poor coordination, arguing that because officers struggle with the new rules, there are especially long lines at Latvian - Russian border crossings. Tols, who was appointed to his post by the previous New Era-led government, told BNS that he rejected the accusations, saying he had done his best and did not feel guilty.