Baltic States – CIS, Banks, Financial Services, Latvia, Legislation

The court did not comply with the time-limit and hence delayed the appeal because the court postponed the date of the hearing seven times in a row. Once commenced, the hearing lasted only a few hours during which the court rejected absolutely all of the lawyers’ requests and dismissed the challenge of the composition of the panel. Contrary to the requirements, not a single defence witness was examined and only 7 documents of thousands of the documents contained in the case materials were studied in the court.

The court judgment will be challenged in the High Court. The judgment therefore is not recognised and is not enforced in Republic of Latvia, the European Union and other civilized countries.

At some other trial recently held in Kyrgyzstan, Former President of the Kyrgyz Republic Roza Otunbayeva called the judicial system of Kyrgyzstan a “Yezhov-style judiciary”. Having appeared in the court to testify as a witness, the Ex-President was deprived of the opportunity to speak to the court. 

According to Kyrgyz news agency www.24.kg, the Ministry of Foreign Affairs of the Republic of Latvia is considering the inclusion of Kyrgyz officials involved in the Manas Bank story on EU blacklist.

The Ministry of Foreign Affairs of the Republic of Latvia has submitted a diplomatic note concerning Kyrgyzstan’s unlawful conduct against the Latvian citizens, requested Kyrgyzstan to explain its violations committed against the Latvian citizens and called on Kyrgyzstan to ensure the protection of the procedural rights of the Latvian citizens.

Inese Laizāne, the Chairperson of the Saeima’s (Parliament’s) Human Rights and Public Affairs Committee, gave her view of the unlawful sentencing rendered in absentia in Kyrgyzstan against the Latvian citizens as a manifest human rights violation done in a spirit of the evil totalitarian regime of Joseph Stalin.

It has been obvious from the beginning that the lawsuit has been politicized and the charges have been completely fabricated in apparent revenge for the unfavourable ruling handed down by the International Court of Arbitration. The International Court of Arbitration ordered the Kyrgyz Government to pay to a Latvian citizen Valeri Belokon US$16.5 million as compensation for unlawful expropriation of his bank at the time.

For three consecutive times, the Kyrgyz courts themselves returned the criminal case for further investigation and for elimination of gross deficiencies while pointing out that the case was investigated in a desultory and superficial manner and demonstrated a strong inclination towards conviction. This proves that the case is quite politicized.

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We would like to recall the following facts. In 2010, after the coup (a forcible overthrow of the government) in Kyrgyzstan, the new political regime actually expropriated Manas Bank owned by Valeri Belokon.  V.Belokon made multiple attempts to talk to the new Kyrgyz Government to recover his investments under the Agreement between the Government of the Republic of Latvia and the Government of the Kyrgyz Republic for the Promotion and Protection of Investments. The Ministry of Foreign Affairs of the Republic of Latvia supports V. Belokon’s stance and has repeatedly called on the Kyrgyz Government to respect the obligations arising from international treaties.

Although the Kyrgyz Financial Intelligence Service (FIS) officially acknowledged in 2011 that no patterns of infringement were found at Manas Bank and there were no grounds to impose sanctions on the bank, the Kyrgyz Government was eager to employ illegal methods in an effort to get revenge for their failure to win the case in the International Court of Arbitration.

The International Court of Arbitration determined that the Kyrgyz Government took possession of Manas Bank (owned by Valeri Belokon) illegally and without any legitimate grounds to do so (an indirect expropriation has occurred). As for the evidence submitted by Kyrgyzstan to the International Court of Arbitration, the Court described it as merely anecdotal evidence. The Court said its ruling (award) in V. Belokon’s favour repaired the damage done to his reputation.

The Kyrgyz Government still continues to violate the Agreement between the Government of the Republic of Latvia and the Government of the Kyrgyz Republic for the Promotion and Protection of Investments signed in 2008. Under the Agreement, all investment-related disputes should be resolved amicably through good faith negotiations and within maximally short timeframes, and court rulings are binding upon the parties, mandatory and enforceable.

According to the latest Corruption Perceptions Index (CPI) published by Transparency International, Kyrgyzstan’s index remains unchangeably high: the score is 28, and the rank ranges between 123 and 129. The Index covers perceptions of public sector corruption in 168 countries. 

According to the 2015 U.S. State Department’s Report on the Kyrgyz investment climate, “since most of these disputes are between foreign investors and the Kyrgyz Government, local courts serve as an executor of the authorities’ political agenda”. Amnesty International also repeatedly pointed out serious breaches committed in Kyrgyzstan while investigating crimes (criminal justice issues are too politicized). 

www.belokonholding.com