Justice Ministry confirms asset freeze order

  • 2011-07-06
  • From wire reports

RIGA - Attempts  are being made to mix the Roman-German law system, accepted in Latvia, with the Anglo-Saxon law system, and the sole purpose of these attempts is to make the situation worse for Ventspils Mayor Aivars Lembergs (For Latvia And Ventspils), exclaimed Lembergs at a press conference on July 1, commenting on the news that the Register of Enterprises said it was not clear how to implement the decision of the High Court of England, ordering the authorities to freeze shares of companies whose actual beneficiary is Lembergs, reports news agency LETA.

“It is very regrettable and saddening that, in order to make things worse for Lembergs, a number of laws are being amended in Latvia, including the law on property,” said Lembergs.
“To begin with, the High Court of England has not ordered any shares to be frozen. The Court has asked me to announce what assets belong to me, or assets that are being managed according to my exclusive instructions,” said Lembergs.
“Under the laws of the Republic of Latvia, the beneficiary is that person who is the owner of a given company’s shares. Under the Anglo-Saxon law, that is a different matter altogether. Of course, applying the Anglo-Saxon law system in Latvia is impossible. In that case, Latvia will have to abandon its own law system and introduce the Anglo-Saxon law system,” said Lembergs, adding that it is hardly worth it if the sole purpose is to do him a bad turn, although some people at the Justice Ministry obviously have a different opinion.

Business daily Dienas Bizness wrote previously that the Register of Enterprises had received a petition from Antoniu Gramsci Shipping Corporation, claiming that shares in sixteen companies, whose actual beneficiary is Lembergs, be frozen, as stated in the High Court of England decision.

The Register of Enterprises says that its databases do not contain information on actual beneficiaries from company shares, therefore this court decision can hardly be executed if no more information and explanations are provided. Furthermore, freezing these shares, which officially belong to persons other than Lembergs, may lead to disciplinary proceedings being taken against the Register of Enterprises’ officials. The Register of Enterprises has therefore sent a letter to the Justice Ministry, asking that the situation be explained.

The Register of Enterprises said that it might decide on these shares after receiving explanations from the court and after consultations with the Register of Enterprises’ Consultative Council members and other experts.
The Riga Vidzeme District Court has recognized the English court’s decision to freeze assets of the controversial Ventspils mayor, in the value of 135 million dollars. The freeze applies to all of Lembergs’ assets, either in his name or not.
The High Court of England previously ordered Lembergs to pledge on a list of his assets. According to the court order, if Lembergs fails to do this, he may have to part from properties that he has said do not belong to him.
Lembergs must publicly announce his assets in the so-called Latvijas Kugnieciba (Latvian Shipping Company) freight rates case.

The Dutch Vitol Group, owner of Ventspils Nafta, turned to the High Court of England claiming that 135 million dollars be seized from Lembergs, accusing Lembergs and his associates of stealing as much from Latvijas Kugnieciba, a subsidiary of Ventspils Nafta. To prove that Lembergs can pay this much, Vitol submitted to the court a list of Lembergs’ properties, on which he must either pledge as his assets or publicly state that they are not his.

Considering Lembergs’ attempts to again evade justice, the Justice Ministry’s public relations officer, Liga Brice said on July 5 that the Register of Enterprises must act in accordance with the High Court of England’s decision regarding the freezing of Lembergs’ shares. Brice said that in the given situation, the Register of Enterprises should do as the Court of England has decided. The principle of mutual trust is one of the basic principles of cooperation in civil proceedings in the territory of the European Union.

She also said that, although Latvia does not have a register of actual beneficiaries, Latvia does have regulations pertaining to actual beneficiaries of company shares, for instance, the Law On the Prevention of Laundering of Proceeds Derived from Criminal Activity, and the Group of Companies Law. Therefore, Latvian courts have the right and the legal basis for the identification of actual beneficiaries and freezing their assets.