President sends bill banning offshores from public contracts back to parliament

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Latvian President Raimonds Vejonis on February 9 sent back to the parliament for revision the bill about banning the companies registered in low-tax or tax-free countries, or the so-called offshore countries, from taking part in public tenders in Latvia, the president's office said. 

"This is already the seventh bill that I have sent back to the parliament for revision because of sub-quality proposals adopted hastily in the final reading. The amendments to the Public Procurement Law clearly demonstrate that the third [final] reading is not the right time to propose solutions that had not been discussed thoroughly in the previous readings," Vejonis said in the letter to the parliament.

He explained that he would not promulgate the bill because of the contradictory provisions that would prevent achievement of the intended goals and may result in additional public expenditure due to possible violation of the EU laws.

The bill puts Latvian-registered companies at a disadvantage compared to foreign-registered businesses owned by offshore companies, the Latvian president said.

He also suggested that the parliament should consider establishing that only proposals discussed during earlier stages of the legislative process could be submitted for the third reading. This practice would help to avoid mistakes in adopting proposals submitted at the last moment and to improve the quality of legislation as well as to boost public confidence in the parliament, Vejonis said.

The Latvian president's office added that the letter to the parliament had been signed electronically because Vejonis is on an official visit to South Korea from February 7 to February 15.

As reported, the Latvian parliament on February 1 passed in the final reading legislative amendments banning off-shore companies from taking part in public tenders in Latvia. Also, those Latvian-registered companies in which more than 25 percent belong to the companies registered in low-tax or tax-free countries or territories will be barred from tendering for public contracts in Latvia. Bidders are to be excluded from the competition also if any of their subcontractors is an offshore company.

Support for the new legislation was not unanimous, as some lawmakers voiced concerns that the provisions might not be consistent with the EU regulation.

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