Beneficial Ownership (LV0038)

OPENNESS OF THE COMPANIES IN THE LATVIAN AND THEIR
actual beneficiary
DEADLINE:
2017 2nd half - 2019 1st half
WHAT ARE THE STATE AND THE PUBLIC INTEREST ISSUES WHICH HELPS MEETING THIS
COMMITMENT?
Openness about company management and operation can contribute to the formation of a fair business
environment and strengthen their corporate governance, as well as to enable data for sectoral development
analysis, journalism and other forms of public interest. Information about companies operating in Latvian, and
other legal persons recorded in the Register of Enterprises (hereinafter - ER) keep a register. ER provides both
the recording of information and availability. Basic information (such as name, registration number, legal address,
date of registration) of a Latvian companies operating can be obtained free of charge ER's Web site. More
information on listed companies and the registration of cases the documents may be obtained on request, as a
paid service. The request for information ER can be carried out, for example, e-services "Request A statement
from the Register of Enterprises keep a register of the" single state and local Online http://www.latvija. en 65 which
recorded information about the company is issued within minutes. ER certain information available electronically in
the form of open data 66th
Since 2017, on 28 April the European e-Justice portal 67 are available in ER vest Insolvency Register 68 data, but
from 2017 on 8 June and Commercial Information 69th
Disclosure of business also contributes to ER shipped Records Information re-users who are ER data
provided on the basis of contractual information issuance contracts.
Force in 2017, there are four such agreements with SIA "LURSOFT IT", SIA "Firmas.lv", Ltd. "CREFO Rating" and JSC "Credit
reference the Office".
While ER information for issuing long-term services have not been upgraded are not available search
options ER shipped register entries online and also available in
65 See: http://www.latvija.lv 66 View:
http://dati.ur.gov.lv/
67 See: https://e-justice.europa.eu/home.do?action=home
68 View: https://e-justice.europa.eu/content_interconnected_insolvency_registers_search-246-lv.do?clang=lv 69 View:
https://e-justice.europa.eu/content_find_a_company-489-lv.do?clang = lv
11th
COMMITMENT
LATVIAN OPEN MANAGEMENT THIRD NATIONAL ACTION PLAN fifty three
a separate request. In order to promote information about company management and operation of the
access, it is necessary to improve and diversify the provision of information channels to improve UR's Web
site and online search capabilities, taking into account the opportunities offered by information technology in
the modernization of services more convenient and faster information availability, as well as to evaluate other
countries' best practices. With a view to provide quality information ER issuing services necessary to
promote the ER registers recording made use of. Issue of improving information services should be possible
to promote the protection of personal data in ER ER state notaries verify the documents submitted and on
the basis thereof shall make entries in registers, ensuring that it is possible to rely on the record the
information and supporting documents
Openness about the company beneficial owners OGP is one of the priority directions of activity. The OGP
Member States such as the UK, Norway, Slovakia, Australia, France and the US plans are included in the
measure linked to the actual beneficiary of openness, especially true beneficiary records. It is believed that
the availability of information on the beneficial ownership allows for more efficient fight against economic
crimes such as money laundering, corruption, fraud, tax evasion, allowing effectively track the flow of assets
to determine whether a particular person owned assets. 70
2015 May 20, was posted on the European Parliament and of the Council (EU) 2015/849 on the prevention of
the use of financial system for money laundering or terrorist financing, and to the European Parliament and
Council Regulation (EU) No. 684/2012 of the European Parliament and repealing Council Directive 2005/60 /
EC and Commission Directive 2006/70 / EC (hereinafter - AML IV Directive).
AML IV directive clarified the conditions for legal persons and arrangements actual beneficiary registration,
as well as that of disclosure. According to the AML Directive IV of legal persons of the EU Member States
should be required to get and keep an adequate, accurate and current information on the beneficial
owners and data on their shares. Additional information kept in a national central register. AML IV Directive
requires that information on legal entities beneficial owners is available to the competent authorities, the
responsible entities carrying out customer due diligence and legitimate interest in the case of any person or
organization.
In the light of these new AML IV Directive, the Cabinet of Ministers on 13 June 2017 it was approved the
draft law "Amendments to the Money Laundering and Terrorist Financing Prevention Act" in 2017 and on
28 July was adopted by the Parliament in 1st reading. Bill's amendments provides for the development of
information submission and registration UR keep a register of legal entities beneficial owners, as well as
providing information about the true beneficiaries of the provision of Money Laundering and Terrorist
Financing Prevention Act subjects fulfilling the legal requirements for customer identification and research,
monitoring and control authorities, the same legal entity as the actual beneficiaries, as well as any natural
or legal
70 Financial Action Task Force. "FATF Guidance: Transparency and Beneficial Ownership". 2014th
View: http://www.fatf-gafi.org/media/fatf/documents/reports/Guidance-transparency-beneficial-ownership.pdf
LATVIAN OPEN MANAGEMENT THIRD NATIONAL ACTION PLAN 54
the person who will be able to demonstrate that it has a legitimate interest. MK 2017 on 13 June approved the
draft law "Amendments to the Money Laundering and Terrorist Financing Prevention Act" version determining the
persons and organizations entitled to have the right to request information about legal persons, a beneficial owner.
Latvian true beneficiary registration started already several years ago. Since
2011. The details are given in the Commercial ER for the recordable rightholders beneficial owners, but
with the information submitted by the persons authorized to only law enforcement and control authorities of
tax administration, public procurement or public-private partnerships in the field. It is expected that IV AML
Directive is implemented in the coming years as a result of information about the beneficial owners
Collection Latvian will be improved and it will be available to a wider group of people than before.
Information about the true beneficiaries of registration and making available of the Action Plan provides for
prevention of money laundering and terrorist financing hedging in 2017 - 2019 in 2017, on 3 May was up in
the Cabinet.
WHAT IS COMMITMENT?
Promote transparency on companies operating in Latvian:
• improve and diversify ER information provided by the issuing services, improving the issuance of
channels, ER's Web site and online search capabilities by promoting ER registers recording made
more efficient use and ensuring public access to them;
• Commercial availability of information to ensure a European e-Justice portal;
• to improve information on the beneficial ownership registration and the availability of effective
regulatory enactments.
HOW TO COMMITMENT will be introduced and the solution to these problems?
The commitment will be implemented with the introduction of the collection of information and the availability and use of
information available on marketing-related development activities.
HOW TO MEET COMMITMENT OGP VALUES?
Commitment to comply with all the OGP values - openness, accountability, public participation, and ICT
solutions. Execution commitment will help to ensure greater public access to information as well as
qualitative information.
LATVIAN OPEN MANAGEMENT THIRD NATIONAL ACTION PLAN 55
ADDITIONAL INFORMATION
Commitment within the framework of implementing the tasks set according to available funding.
INTERMEDIATE OBJECTIVES
1 introduced and available to the public a new website is ER
31.12.2016. - 01.10.2017.
2. Improve and diversify ER information provided by the issuing services, improving the issuance of
channels, online search capabilities ER Web site promoting ER registers recording made more
efficient use and ensuring public access to them
01.04.2017. - 01.01.2019.
3. Provide Commercial information available to the European e-Justice portal
01.11.2016. - 06.08.2017.
RESPONSIBLE PUBLIC AUTHORITIES
Business Register, Ministry of Finance
MEASURE THE IMPLEMENTATION OF RELEVANT PARTNERS
Latvian Free Trade Union

11. Transparency on Latvian Enterprises and their Beneficiary Owners

Language of the commitment as it appears in the action plan:

Editorial Note: The Latvian government did not submit an official English translation of its 2017−2019 to OGP. Therefore, the original Latvian version as it appears in the action plan can be viewed below. For the full text of this commitment, please see the Latvia 2017−2019 action plan here: https://www.mk.gov.lv/sites/default/files/editor/atvertas-parvaldibas-plans2017.pdf.

Veicināt atklātumu par uzņēmumiem, kas darbojas Latvijā:

• uzlabot un dažādot UR sniegtos informācijas izsniegšanas pakalpojumus, pilnveidojot izsniegšanas kanālus, UR tīmekļvietni un tiešsaistes meklēšanas iespējas, veicinot UR reģistros veikto ierakstu izmantošanu un nodrošinot efektīvāku publisko pieejamību tiem;
• nodrošināt Komercreģistra informācijas pieejamību Eiropas e-tiesiskuma portālā;
• pilnveidot informācijas par patiesajiem labuma guvējiem reģistrāciju un efektīvu pieejamību normatīvajos aktos noteiktajā kārtībā.

Milestones:

11.1. Ieviesta un sabiedrībai pieejama jauna UR tīmekļvietne

11.2. Uzlabot un dažādot UR sniegtos informācijas izsniegšanas pakalpojumus, pilnveidojot izsniegšanas kanālus, tiešsaistes meklēšanas iespējas UR tīmekļvietnē, veicinot UR reģistros veikto ierakstu izmantošanu un nodrošinot efektīvāku publisko pieejamību tiem

11.3: Nodrošināt Komercreģistra informācijas pieejamību Eiropas e-tiesiskuma portālā

Start Date: 1 Jul. 2017

End Date: 30 Jul. 2019

Context and Objectives

The Enterprise Register (ER) provides general information on legal entities in Latvia free of charge. Some information can be searched by enterprise (name, address, date of registration, etc.) and some general statistics are available on how many enterprises, associations, or political parties were registered during a given period. Citizens could request from the ER basic company information like their name, registration number, date of founding, and address. However, in order to obtain more detailed information–such as beneficial ownership–one must conduct individual searches and pay for each request. This makes it difficult to search for beneficial owners of companies and to determine if there are links to Latvian companies in other countries. Companies were not required to disclose beneficial ownership information when registering their company or later throughout the company’s life. ^[57]

The objective of the commitment is to improve publicly available information on private enterprises, and in particular their beneficial ownership. It calls for developing a new ER website and to improve the searchability of the available information. In parallel, the government has introduced a requirement for private entities (both businesses and associations) to disclose to the ER information on their beneficial owners. ^[58] This information can be obtained upon request and for a fee. One of the activities is to link data of the Enterprise Register to the EU Justice portal. EU authorities will have access to enterprise data, but it is not clear from the action plan if the data on beneficial ownership will be made publicly available within the scope of this action plan.

The description of the commitment’s activities does not provide enough information to assess if there will be more information available versus the same data merely being obtainable in a different format. The commitment also does not disclose what new features the website will include and in what way the information will be searchable. While the commitment seeks to improve transparency of companies’ beneficial owners, none of the commitment’s activities, as described, will increase public access to this information. The information will remain accessible only for institutions that are already involved in beneficial ownership policy. Therefore, the potential for this commitment to change the status quo in terms of access to beneficial ownership information is minor. According to the ER, lack of details on what new information will be published is meant to avoid overlap and contradictions between this and other relevant policy planning documents and regulations. [59] While the ER has started publishing data on enterprises in open data format, this is not highlighted in the action plan since it started before its implementation in 2014.

Next steps

Although this commitment could establish preconditions for openness on beneficial owners, additional information will not be available for journalists, NGOs, or researchers through the activities. To improve access to beneficial ownership information, Delna suggests that Latvia follow policies of Great Britain and Slovenia, Denmark, Finland and the Netherlands which have developed open registers for beneficial ownership. Delna also argues that the public benefit from disclosing information is higher than the need to protect the privacy of beneficial owners provided that adequate exemptions measures are in place for special cases of personal security risks. ^[60] Delna considers the availability of open data on enterprises–including data on beneficial owners–as a transformative change toward identifying links between entities and revealing corruption between enterprises and politicians. ^[61]

[57] Zinta Miezaine, et. al., Pētījums godīgas starptautiskās nodokļu politikas jomā (Laps.lv, EU, and Latvian Association for Development Assistance, Nov. 2015) http://lapas.lv/wp-content/uploads/2017/01/Tax_petijums_FIN.pdf.

[58] Laws of Latvia, “Amendments to the Law on Prevention of Money Laundering and Financing of Terrorism” no. 2017/222.7 (Latvijas Vēstnesis, 26 Oct. 2017), https://likumi.lv/ta/id/294868-grozijumi-noziedzigi-iegutu-lidzeklu-legalizacijas-un-terorisma-finansesanas-noversanas-likuma.

[59] The IRM received this information from the Register of Enterprises of the Republic of Latvia during the pre-publication period for this report.

[60] Jānis Volberts, “To Reduce Financial Experiences, the Company Must Be Published in the True Register of Good Beneficiaries” (Delna, 21 Apr. 2017), https://delna.lv/lv/2017/04/21/lai-mazinatu-finansu-noziegumus-uznemumu-patiesa-labuma-guveju-registram-jabut-publiskam/.

[61] Liene Gatere (Director of Delna), interview with IRM researcher, 15 Jan. 2019.

11. Transparency on Latvian Enterprises and their Beneficiary Owners

Language of the commitment as it appears in the action plan:

Editorial Note: The Latvian government did not submit an official English translation of its 2017−2019 to OGP. Therefore, the original Latvian version as it appears in the action plan can be viewed below. For the full text of this commitment, please see the Latvia 2017−2019 action plan here: https://www.mk.gov.lv/sites/default/files/editor/atvertas-parvaldibas-plans2017.pdf.

Veicināt atklātumu par uzņēmumiem, kas darbojas Latvijā:

• uzlabot un dažādot UR sniegtos informācijas izsniegšanas pakalpojumus, pilnveidojot izsniegšanas kanālus, UR tīmekļvietni un tiešsaistes meklēšanas iespējas, veicinot UR reģistros veikto ierakstu izmantošanu un nodrošinot efektīvāku publisko pieejamību tiem;
• nodrošināt Komercreģistra informācijas pieejamību Eiropas e-tiesiskuma portālā;
• pilnveidot informācijas par patiesajiem labuma guvējiem reģistrāciju un efektīvu pieejamību normatīvajos aktos noteiktajā kārtībā.

Milestones:

11.1. Ieviesta un sabiedrībai pieejama jauna UR tīmekļvietne

11.2. Uzlabot un dažādot UR sniegtos informācijas izsniegšanas pakalpojumus, pilnveidojot izsniegšanas kanālus, tiešsaistes meklēšanas iespējas UR tīmekļvietnē, veicinot UR reģistros veikto ierakstu izmantošanu un nodrošinot efektīvāku publisko pieejamību tiem

11.3. Nodrošināt Komercreģistra informācijas pieejamību Eiropas e-tiesiskuma portālā

Start Date: 1 Jul. 2017

End Date: 30 Jul. 2019

This commitment sought to improve the searchability of publicly available information on private enterprises, and in particular their beneficial ownership, by developing a new Enterprise Register (ER) website. Additionally, the commitment planned to link data on the ER to the EU Justice portal so that EU authorities can access this data.

This commitment was completed by the end of the action plan period. The new ER portal, http://www.ur.gov.lv, went public on 1 February 2018. The new portal provides free information that was either previously unavailable or required a fee. [64] This additional information includes commercial pledges, legal proceedings on insolvency or legal protection, limitations for commercial activities, and information on started and completed processes of liquidation of enterprises. The portal allows identification of company representatives by name, registration number, ID code, or (for foreigners) date of birth.

On 27 March 2018, the Cabinet of Ministers approved new regulations that require the ER to provide free access to additional information on mutual liabilities between enterprises. [65] Since 1 April 2019, information submitted to the ER regarding beneficial ownership is publicly available on the new portal. Also, in accordance to the law, starting on 29 June 2019, newly established enterprises, associations, and foundations are now required to provide the ER with information on beneficial owners. At the end of 2019, this information was made available online for everyone.

The ER linked basic data on Latvian enterprises to the EU Justice portal. Users of the EU Justice portal can now access information on the names, legal forms, legal addresses, and registration numbers of Latvian enterprises free of charge. It plans to link other information (such as beneficial owners) after regulations on the payment system of the EU Justice portal are adopted.

While this commitment did not specify what new information would be published, its implementation improved public access to beneficial ownership information. Before the action plan, the ER provided only general information on legal entities in Latvia for free. In order to obtain more detailed information (such as beneficial ownership) one had to conduct individual searches and pay for each request. This made it difficult for users to search for beneficial owners of companies and to determine if there were links to Latvian companies in other countries. [66] As a result of this commitment, detailed information on Latvian enterprises that previously required a fee is now available for free on the ER. Additionally, before the action plan, there was no category for beneficial ownership on the ER portal. Information on beneficial owners of enterprises has been publicly available, free of charge, and in open data format on the new ER portal since December 2019. [67]

Although the amount of information provided on the ER portal has significantly increased compared to before the commitment, most of it was already accessible for a fee from commercial companies reusing data from the ER. Also, as of the end of the action plan period (July 2019), some information on the ER is still only available for a fee, Therefore, at the end of action plan, the change was marginal.

Making remaining information free of charge is the next step. [68] The ER wrote, and Parliament approved, amendments to the Law on Enterprise Register that will enter into force starting 1 July 2020, [69] and which are already partially implemented as to May 2020. [70] For example, the ER website provides free current and historical information on legal entity officers, shareholders, beneficial owners, interests in other companies, collateral, commercial pledges, and insolvency. It also includes information on physical persons, such as registered matrimonial property agreements and membership in companies. However, a large part of information on the ER is still only available for a fee, such as a network of registered obligations of a person (such as debts). Upon a justified request and for a fee, one can receive non-public documents, viewing the original documents in person with or without anonymization.

[64] ER, email exchange with IRM researcher, Oct. 2019.

[65] Cabinet of Ministers, “Noteikumi par Latvijas Republikas Uzņēmumu reģistra informācijas izsniegšanas un citi maksas pakalpojumiem” [Regulations on Issuance of Information from the Enterprise Register of the Republic of Latvia and Other Paid Services] 2018/64.15 (Latvijas Vēstnesis, 27 Mar. 2018), https://likumi.lv/ta/id/298070-noteikumi-par-latvijas-republikas-uznemumu-registra-informacijas-izsniegsanas-un-citiem-maksas-pakalpojumiem.

[66] Zinta Miezaine, Independent Reporting Mechanism (IRM): Latvia Design Report 2017−2019 (OGP, 2019), 43, https://www.opengovpartnership.org/wp-content/uploads/2019/08/Latvia_Design-Report_2017-2019_EN.pdf

[67] Antonio Greco, Open Data and Political Integrity in the Nordic Region (Delna, Transparency International, Open Knowledge Sweden, 26 Nov. 2019), 57, https://delna.lv/wp-content/uploads/2019/11/Open-Data_TI-LV_2019.pdf.

[68] Enterprise Register, “Uzņēmumu reģistrs vēlas atvērt reģistrus” [The business register wants to open registers] (15 Aug. 2019) https://www.ur.gov.lv/lv/jaunumi/aktualitates/uznemumu-registrs-velas-atvert-registrus/.

[69] Cabinet of Ministers, “Grozījumi likumā ‘Par Latvijas Republikas Uzņēmumu reģistru’” [Amendments to the Law "On the Register of Enterprises of the Republic of Latvia"] 2019/240.14 (Latvijas Vēstnesis, 14 Nov. 2019), [https://likumi.lv/ta/id/311001-grozijumi-likuma-par-latvijas-republikas-uznemumu-registru-.

[70] Id.