Energy, Financial Services, Latvia, Legislation, Oil, Transport

"I don’t understand how it would affect the transit sector. Nobody has explained it. Looking at the companies belonging to Vitol group, I don’t see how these legislative changes could affect us. If you are in business, if you have real assets, I don’t see any problems," said Kirkup.

He assumed that the main objections have been raised against the requirements to reveal true beneficiaries in companies and some people are dissatisfied with these amendments.

As reported, Saeima in late April adopted amendments to the Law on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) aimed at strengthening the Latvian finance system by reducing the number of risky transactions with high-risk customers that meet the definition of a shell company. The bill is also intended to increase the exchange of information between the financial institutions and the law enforcement agencies.

Under the draft law, the shell company is defined as an entity that fits one or several of the following three criteria. Firstly, there is no actual economic activity and no documentary proof to the contrary. Secondly, the entity is registered in a jurisdiction where companies are not required to submit to the authorities their financial statements. Thirdly, the entity has no place of business in its country of domicile.

Representatives of transit sector have been complaining in mass media that such amendments would harm the sector, and shell companies in the transit sector is a common practice in Europe.

Vitol Baltics runs Vitol group companies operating in Latvia – Latvijas Kugnieciba, LSC, VNT, LatRosTrans, Ventspils Nafta and LASCO Investments.