WORLD TRADE  
ORGANIZATION  WT/L/563 
15 March 2004 
 (04-1122) 
 Original:   English 
   
REPORT ON THE PRIVATIZATION PROCESS IN LATVIA 
 
Communication from Latvia
 
 
 The following communication has been receive d from the Permanent Mission of Latvia.   
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   With reference to paragraph 18 of the Report of  the Working Party on the Accession of Latvia 
to the WTO (WT/CC/LVA/32 of 30 September 1998), please find herewith the "Annual Report on 
Development in Programme of Pr ivatization in Latvia (2002). 
 
Annual Report on Development in Progra mme of Privatisation in Latvia (2002)
 
 
- The LPA approved 666 basic principles for privatisation of state owned property 
objects and 717 privatisation regula tions for property objects, including 
670 privatisation regulations for land plots.  
 
- Two state owned enterprises (Riga City St ate Apartment Maintenance Authority and 
Riga Psychoneuroiogical Patient Rehabilita tion Enterprise) were transformed into 
statutory companies; and one statutory company (State Limited Liability Company Rehabilitation Hospital Krimulda) lost the status of a state statutory company as a 
result of privatisation; total initial shar e capital of the said statutory companies 
amounts to 889 000 lats. 
 
- Purchase agreements for 12 state owned prope rty objects (state enterprises, statutory 
companies, state owned assets) were conclude d, the total sale price of the sold state 
owned property objects amounted to 772 071 lats. 26.25% of the total purchase price 
had to be paid in tats and 73. 75% - in privatisation vouchers. 
 
- Pursuant to purchase agreements, the purch asers assumed obligations in the amount of 
117 006 lats. The concluded purchase agreements did not stipulate any investment conditions. 
 
- The purchase agreements stipulated retention of 173 jobs. 
 
- Purchase agreements of 13 state owned real estate properties (buildings) were 
concluded, total sale price of the property objects - 876 660 lats. Means of payment for 
the property objects were 34.5% lats  and 65.5% privatisation vouchers. 
 
- State owned equity holdings in nine companies were sold for the total purchase price 
of 655 215 lats. Means of payment: 34.5% lats and 65.5% priv atisation vouchers. 
Natural persons paid 47.6% of the total purch ase price, legal entities paid 52.4% of the 
total purchase price. 
 
- 660 purchase agreements were concluded for th e sale of state owned land plots.  The 
total sale price of land plots – 11.62 milli on lats. Means of payment: 14% lats and WT/L/563 
Page 2  
 
86% property compensation vouchers.  Total area of the land plots sold was 10 453 795 square metres. 9 purchase agreements of land plots stipulated also the sale of newly planted forests for the total sale price of 53 235 thousand lats. 
 
- Purchase agreements of 12 state owned real  estate properties (buildings with land 
plots) were concluded.  Total sale price of the above properties - 3.3 million lats. 
Means of payment: 25.7% lats, 11.1% pr ivatisation vouchers and 63.2% property 
compensation vouchers.  Total area of the land plots sold was 29 317 square metres. 
 
- Liquidation process was completed for seven enterprises. 
 
- The LPA concluded eight pledge agreements  to secure for the purchasers' obligations. 
 
- Shares of two companies were sold for priv atisation vouchers via the public offering 
(State JSC Latvijas gaze, and State JSC Latvian Shipping Company!  Total nominal 
value of the sold shares was 65.45 milli on lats; 15 158 natura l persons and legal 
entities became shareholders. 3.01 million priv atisation vouchers were used in the 
public offering. 
 
- 340 107 shares of four enterprises (State Limited Liability Company Rehabilitation 
Hospital Krimulda, State Limited Liability Company Neirožu stacion ārs, State Limited 
Liability Company R īgas jūrmala, State Enterprise Rehabilitation Hospital Baltezers) 
were sold to the employees of these comp anies for the total sale price 467 442 lats, 
using as payment means 100% privatisation vouchers. 
 
- Three agreements were concluded for the sale of the state owned equity holdings 
established as a result of debt capitalisation for the total sale price of 317 009 lats.  
Means of payment:  96.3% lats a nd 3.7% privatisation vouchers. 
 
- One purchase agreement following the enterpri se lease buy-out for the sale of shares of 
the State Enterprise Sigfarm was concluded. Sa le price stipulated in the agreement was 
63 771 lats. 
 
- Purchase novation agreements of 5 objects were concluded. 
 
- 3.52 million privatisation vouchers for the nominal value of 98.55 million lats have 
been transferred to the LPA privatisation voucher accounts.  75 632 vouchers have 
been transferred for the enterprise  lease buy-out and purchase agreements, 
2 965 969 vouchers - for the public offering, 44 636 vouchers - for transformation of enterprises into statutory companies, 433 494 property compensation vouchers - for 
land privatisation. 
 
- The LPA revenue from the privatisation of state owned property amounted to 
145 863 936 lats, incl. revenues in cash 47 311  468 lats, in privatisation vouchers 
98 552 468 lats. 
 
- The LPA operational expenses - 4.638 million lats.
1 
 
- 1.68 million lats were transferred to the St ate Property Privatisation Fund, 6.29 million 
lats - to the Municipal Property Privatisa tion Funds, 0.65 million lats - to the state 
budget for the budget debt capitalisation, and 30.98 million lats were transferred in 
                                                      
1 Non-audited results  WT/L/563 
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compliance with special orders of the Cabinet of Ministers.2 5.994 million lats were 
reserved for the implementation of the Latvian National Library project, 
 
- The LPA allocated 1.33 million lats for the settlement of employee claims, incl. 
888 965 lats were transferred for social ta x and state social insurance payments, 
206 401 lats for residential income tax, 81 30 8 lats for the reimbursement of detriment 
at work, 148 922 lats for repayment of debts to employees. 
 
- Privatisation of 114 state owned property objects was acknowledged to be completed. 
Investments of 164.2 million lats or 1.8 times more than envisaged in the privatisation 
regulations of these objects were performed in these objects.  In 2002, 
44 968 employees or 1.23 times more than stipulated by the privatisation regulations were employed in the mentioned 114 state owned property objects. 
 
- Since the establishment of the LPA, 914 state owned property objects (state 
enterprises, statutory companies, state owned assets), 188 state owned equity holdings, 
211 state owned real estate objects have been designated for privatisation, 77 state owned enterprises and companies have  been designated for liquidation, 
342 denationalisation cases have been assigned for review. 
 
- From 1994 till 2002, total revenue from the state property privatisation has amounted 
to 1694.47 million lats, incl. 278.79 million la ts in cash and 1415.8 million lats worth 
of privatisation vouchers. 
 
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2 Including payments for the se ttlement of employees’ claims