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Foreign investors still frustrated with insolvency issue

There is a lack of political will in Latvia to tackle insolvency issues, the influential Foreign Investors' Council in Latvia (FICIL) said November 16.

The Latvian parliamentary committee on legal affairs earlier in the day approved removing from the proposed amendments to the Insolvency Law a provision which stipulates that insolvency administrators have the status of a public official. The parliament was to discuss the amendments in a second reading of the bill on November 17.

This decision by the committee members demonstrates serious lack of political will to improve supervision of insolvency administrators and establish order in the insolvency matters, FICIL said.

If the Latvian legislators did not change their careless attitude to the problems in the judiciary, they can hardly hope to see influx of more investments, foreign investors warned.

"I am deeply shocked by the decision of the legal committee. A day before the parliament is scheduled to discuss this extremely important bill, major changes are deftly made in the bill, removing the provision about giving the insolvency administrators the status of public officials without offering any alternatives to strengthen supervision of the insolvency administrators,” said Ilze Znotina, the head of the FICIL working group on insolvency issues.

The decision of the parliamentary committee has just sent down the drain three years of efforts to establish order in the insolvency matters and put an end to shady dealings of dishonest insolvency administrators, she said.

The Latvian parliamentary committee on legal affairs upheld the proposal by lawmakers from the opposition For Latvia from The Heart party about removing from the proposed amendments to the Insolvency Law a provision which stipulates that insolvency administrators have the status of a public official. Six committee members supported their proposal, one was against.

Insolvency administrator Kaspars Novicans attending the meeting said that the provision was "declarative". He said there were many other provisions being included in the law to make the insolvency process more transparent.

Just last week the Latvian parliament approved the draft amendments to the Insolvency Law in the first reading.

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