Latvia, Legislation, Markets and Companies, Technology

As reported, the Justice Ministry has concluded that there are several problems with the current procedure of auctions that have a negative impact on auction results as well as the overall insolvency process. For instance, fraudulent persons may reach agreement before an auction to act jointly with the intent to influence other bidders so as to reduce the value of an item being sold. Likewise, third parties may participate in an auction who may always bid higher and therefore those who sincerely wish to buy a given item have to overpay.

After the amendments come into force, auctions and insolvency procedures will all take place electronically, which will eliminate all the said problems. The bill stipulates that a debtor's property is sold at auction organized by and held at the Electronic Auctions Portal. The bill also lays down the procedure for creating the portal where auction announcements would be posted and where bidders would be able to register for an auction. This is also where information about registered bidders would be accumulated, where bidders would log in to participate in an auction, and where auction results could be contested.

The portal will also offer opportunity for any person to follow the process of an auction online, although the identity of the bidders will only be known to the entity responsible for maintenance of the portal. The electronic auction portal will be part of the state information systems. The Court Administration has already begun to work on the development of the portal.

According to the Justice Ministry, the development of the electronic auction portal will cost EUR 450,000.