The Latvian parliament on February 1 passed in the final reading the legislative amendments banning companies that are registered in low-tax countries, or the so-called offshore countries, from taking part in public tenders in Latvia.
The Finance Ministry, the Procurement Monitoring Bureau and legal experts reviewed the parliament's decision and concluded that it was inconsistent with the international law.
"One cannot impose restrictions on business activities of a company based solely on its domicile," Reizniece-Ozola said, adding that it would be different in case of tax evasion or money laundering but the country of incorporation alone cannot be the reason for declaring a company ineligible in public tenders.
The Finance Ministry is working on a report explaining its argumentation that it will ask Latvian President Raimonds Vejonis to consider before promulgating the bill.
"If the President promulgated the law, there will be litigations because those legislative amendments amount to discriminatory treatment of companies," the finance minister said.
Unity and the Union of Greens and Farmers support the proposal by their partner in the ruling coalition, the National Alliance, to ban offshore companies from participation in public tenders in Latvia but are concerned about the proposal's compliance with the EU directive.
The Latvian Chamber of Industry and Commerce supports the proposal to ban offshore companies and Latvian companies controlled by offshore companies from participation in public tenders.