WORLD TRADE
ORGANIZATIONWT/L/405
17 July 2001
(01-3516)
Original:  English
REPORT ON THE PRIVATIZATION PROCESS IN LATVIA
Communication from Latvia
The following communication has been received from the Permanent Mission of Latvia, with
reference to the commitments contained in the Report of the Working Party on the Accession of
Latvia to the WTO (WT/ACC/LVA/32).
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1. Summary
1. Summarizing the results of privatization in Latvia since 1992, it should be noted that mass
privatization can be considered complete in Latvia.  Within nearly eight years, 97 per cent of all State
owned enterprises and companies have been designated for privatization, more than 1,550privatization agreements have been concluded.  As a result of implementing the privatization
program, in 2000, the private sector accounted for 67 per cent of the GDP, and 71 per cent of the
economically active inhabitants were employed by the private sector in Latvia.  In such sectors as
industry, agriculture, fishing, construction, and trade, the share of private companies exceeded 90 per
cent of the GDP.
2. Public offering programme (privatization for vouchers)
2. The Latvian public offering programme has been recognized as one of the most successful
among those implemented in economies in transition. It has facilitated development of a wide stratum
of shareholders.  By the end of 2000, stock of 88 companies had been offered for privatization
vouchers within the public offering program. As a result, 111,208 natural persons and legal entities
have already become shareholders in the above companies.  Of the 66 companies listed on the Riga
Stock Exchange, 60 companies are privatized companies.WT/L/405
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INFORMATION ON THE PROGRESS OF THE PRIVATIZATION
PROCESSOF STATE ENTERPRISES
1 May 1994 - 1 January 2001
Activity Total Small objects
(less than 50
employees)Medium-sized
objects
(50-500 empl.)Large objects
(More than 500
empl.)
Enterprises assigned for privatization 895 599 261 35
Enterprises transferred from the Ministry ofAgriculture310 214 96 0
Enterprises transferred for liquidation 118 65 46 7
Repeated privatization 18 13 5 0
Privatization objects after split of enterprises 1,676 1,341 295 40
Privatization cancelled or enterprises merged with
other companies198 186 9 3
Privatization temporarily stopped 8 5 2 1
Restitution process initiated 60 54 6 0
Liquidation or insolvency procedure initiated 99 32 32 35
Privatization Regulations approved 714 452 227 35
Transactions concluded:
- purchase agreements signed 587 391 172 24
- invested into private companies 4 2 2 0
- privatized without majority owner 4 0 2 2
- privatized by the Ministry of Agriculture 261 165 96 0
Proceeds of sale in LVL1 million:
- cash 196.8
- privatization vouchers 291.1
In 2000:
− The LPA approved 886 basic principles for privatization of State owned property
objects and 983 privatization regulations for the property objects, including 837 basic
principles and 839 privatization regulations for privatization of land plots.
− Four State owned enterprises were transformed into statutory companies.
− Purchase agreements for 67 State owned property objects were concluded, the total
purchase price of the sold State owned property objects amounted to 4,97 million
LVL. 36.3 per cent of the total purchase price had to be paid in LVL and 63.7 percent - in privatization vouchers
2.
− Pursuant to purchase agreements, the purchasers assumed obligations for the amount
of 3.18 million LVL.
− The purchase agreements stipulated retention of 907 jobs.
− Five of the above State owned property objects were sold for a symbolic price – 1
LVL.  Their purchasers assumed obligations of the property objects in the amount of
0.5787 million LVL and undertook to secure 66 jobs.
− Purchase agreements of 35 State owned real properties (buildings) were concluded,
total sale price of the property objects – 1.31 million LVL.  Means of payment for the
property objects were 48.73 per cent in LVL and 51.27 per cent in privatizationvouchers.
                                                     
1 1 LVL = US$1.66.
2 Information on the volume of privatization transactions in 1999 is subject to updating.WT/L/405
Page 3
− State owned equity holdings in 14 companies were sold for the total purchase price of
1.56 million LVL.  Means of payment: 39.1 per cent LVL and 60.9 per centprivatization vouchers.  Natural persons paid 14.85 per cent of the total purchase
price, legal entities paid 85.15 per cent of the total purchase price.
− 746 purchase agreements were concluded for the sale of State owned land plots.  The
total sale price of land plots – 25.56 million LVL.  Means of payment: 19.85 per cent
LVL and 80.15 per cent property compensation vouchers.  Total area of the land plotssold was 10 504 767 square metres.
− Purchase agreements of 12 State owned real properties (buildings with land plots)
were concluded. Total sale price of the above properties – 0.67 million LVL.  Means
of payment: 53.5 per cent LVL, 12.5 per cent privatization vouchers and 34 per centproperty compensation vouchers.  Total area of the land plots sold was 16,812 squaremetres.
− Liquidation process was completed for 34 enterprises.
− One lease buy-out purchase agreement was concluded.  The total purchase price
stipulated by the agreements – 61748 LVL.
− The LPA concluded 10 pledge agreements to secure for the purchasers’ obligations.
− Shares of 2 enterprises were sold for privatization vouchers via the public offering
(JSC Kalceks, and State JSC Lokomotīve).  Total nominal value of the sold shares was
0.62 million lats; 321 natural persons and legal entities became shareholders.
− Total nominal value of shares sold to the enterprise employees and pensioners for
privatization vouchers amounts to 0.53 million LVL, 1247 natural persons had
became shareholders.  Total nominal value of shares sold to the enterprisemanagement (31 persons) for privatization vouchers amounts to 0.25 million LVL.
− 16 agreements were concluded about the sale of the equity holdings established as a
result of budget debt capitalization for the total sale price 1.13 million LVL.  Means
of payment: 73 per cent in LVL and 27 per cent in privatization vouchers.
− The LPA passed decisions about the change of payment means in 35 privatization
cases, upon exercising its right stipulated by Part two of Article 52 of the Law On
Privatization of State Owned and Municipal Asset Units.  The purchasers are allowedto pay 380 213 LVL in privatization vouchers.
− Pursuant to the Cabinet of Ministers Regulations No. 34 of 27 January 1998, 2.53
million LVL were allocated for the settlement of the employees claims from insolventand liquidated enterprises, including 1.88 million LVL to be transferred to the budget,
0.65 million LVL for debt payment to the employees.
− 1.9 million LVL were transferred to the State Property Privatization Fund, 7.99
million lats were transferred to the Municipal Property Privatization funds and 17.9
million lats were transferred to the State Treasury for different purposes of theCabinet of Ministers.
3. The most significant privatization transactions in 2000
3. The largest privatization transaction in 2000, according to both the number of employees and
the sale price – the sale of controlling interest of the State JSC Tosmare to the JSC R īgas kuģu
būvētava. Sale price of the shareholding – 1 922 994 lats, the purchaser shall pay 50% in lats and 50%
in privatization vouchers, as well as make investments in the amount of 1 million lats.WT/L/405
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4. The largest transaction of the sale of the State owned equity holdings is the sale of State
owned shares in JSC ALFA  to SIA Zinātniskais centrs “Mikroelektronika” for 654 thousand lats.  The
purchaser shall pay 50% in lats and 50% in privatization vouchers.
5. The State owned land plot at 201 Br īvības iela, R īga, was sold to the purchaser A.Vlasovs for
820 000 lats.  Land plot at 2/3 Uzvaras bulv āris, Rīga, was sold to SIA ORI Boulinga Centrs  for 520
000 lats.  The purchaser shall pay 20% in lats, 80% in property compensation vouchers.
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