Latvia plans to involve local businesses in national security supply

The Ministry of Defense (AM) will have the right to enter into agreements with capital companies registered in Latvia, thereby facilitating the procurement procedure and strengthening the State defense industry, according to the Law on Defense Industry adopted by the government and referred to the Saeima on Thursday, July 13.

The purpose of the law is to ensure the secure supply of goods and services to the National Armed Forces (NBS).

The draft law states that the development and functioning of the national defense industry are currently taking place in a context where many of its players have, for various reasons, significantly limited or even completely impossible access to standardized services in the financial sector.

This poses significant obstacles to increased investment in research and development, production, supply, and storage of raw materials needed for production, as well as investment in the security of the industry. The defense sector, therefore, needs a legislative mandate.

The draft law provides for the right of AM to enter into strategic partnership agreements with capital companies registered in the Republic of Latvia that are licensed for commercial activities with goods of strategic interest or have received a certificate from the military manufacturer.

At the same time, the draft law also provides for the establishment of a new AM capital company or acquisition of shares in an existing capital company, which will provide services of strategic importance to national security and the supply of certain goods.

The State Chancellery has been tasked with preparing a draft law for submission to the Saeima. The law is expected to take effect on September 1 this year.

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