Category: Latvia

Cobalt has advised Estonia’s Helmes on its acquisition of all shares of software development company T2T from Latvia’s Tet. 

Cobalt’s team included Specialist Counsel Ott Aava, Associate Liina Saaremets, and Assistant Lawyer Kerli Paasoja. 

The Latvian office of BDO Law has provided legal analysis to the European Investment Bank regarding a EUR 80 million financing agreement with the Latvian state.

According to BDO Law, “on March 19, 2020, [Latvia’s] Cabinet of Ministers adopted special regulations on working capital loans to economic operators affected by the spread of Covid-19, establishing a procedure by which the state provides financial support to the economy to overcome the consequences of the Covid-19 economic crisis. The allocation of state funding is organized by the Development Financial Institution Altum joint-stock company, which in turn has concluded periodic financing agreements with the European Investment Bank.”

BDO Law’s team included Partner Vita Liberte, Senior Associate Rolands Valdemars, Senior Associate Anda Beinare, Junior Associate Stella Kaprane.

The Latvian office of Cobalt has advised AirBaltic on a EUR 250 million investment in its shares by the Latvian Government.

According to Cobalt, “the decision of the Latvian government to recapitalize AirBaltic was approved by the European Commission. In its announcement, the Commission stated that AirBaltic plays a major role in the Latvian economy, notably because it ensures essential connectivity services within Latvia and from Latvia to other European and international destinations. The Commission also added that the company contributes significantly to foreign trade, as several Latvian businesses rely on its air services to connect with business centers in Europe and worldwide.”

Cobalt’s team included Managing Partner Dace Silava-Tomsone, Partners Gatis Flinters and Guntars Zile, Senior Associate Diana Zepa, and Associates Janis Sarans and Toms Krumins.

“In terms of national politics, when it comes to Latvia, the word of the day is ‘stability,’“ says Raimonds Slaidins, Senior Partner at Ellex Klavins in Riga. “The current coalition government has been in power for about one and a half years now, and other than the COVID-19 crisis this has been a good, stable period of time for us — there aren’t any indications that something might change in the near future regarding the national government.“

On the other hand, Slaidins says that the situation in the country’s capital is a bit contentious. “The biggest upcoming event in politics is, probably, the snap municipal elections in Riga which are planned for the end of August,” he says. Riga, which contains almost half of Latvia’s population, has been under the control of an appointed administrator since early March, he says, because the “elected officials of Riga [were] unable to make decisions for the city, which triggered the National Government appointing an administrator until elections could be organized.“ The elections were initially planned for spring, but were postponed by the COVID-19 crisis, which led to the administrator being in charge “longer than initially envisaged.”

But in terms of its response to the coronavirus, Slaidins says, “Latvia has been a success story, considered by most public and international commentators as having done a good job from the very outset, in March.” Indeed, he says, although the government “clamped down, enacted strict measures, and sealed off the country,“ there has never been a “complete and total lockdown,“ and the social distancing measures proved effective. At the time of writing, the total number of COVID-19 cases in Latvia stands at 1203, with 31 deaths.

“Our success story has been pretty much the case in other Baltic countries as well, so a Baltic-bubble was formed to allow travel between the three countries, and now the country has opened up to other EU members as well,“ Slaidins adds. He points out that there have been some “flare-ups“ since this happened, but insists that the government is maintaining a “high level of diligence.”

Finally, on the subject of Latvia’s economy, Slaidins says that, “as everywhere else, a major blow was dealt to sectors like tourism and hospitality by COVID-19, but the government tried to help by propping up a support mechanism for the unemployed and the businesses that were hit the most.“ He says that business sectors that have performed well are, “like in most other countries, food, IT, pharma and transport.“ Slaidins concludes by saying that he believes things will get better for the economy as long as the “virus situation remains under control and people begin to feel more confident again.“

Cobalt has provided pro bono advice to the Apeirons Foundation regarding an opinion the latter submitted to the Constitutional Court of Latvia as amicus curiae.

According to Cobalt, “on July 9, 2020, the Constitutional Court ruled that Paragraph 2 of Cabinet Regulation No. 1605, in so far as it determines the amount of the social security benefit for unemployed persons with disabilities and seniors, does not conform with Articles 1, 91 and 109 of the Constitution of the Republic of Latvia and is void from 1 January 2021. The Constitutional Court emphasized that the current amount of the social security benefit does not ensure the satisfaction of the basic needs of its beneficiaries and enable them to live a life with dignity. Moreover, the Court condemned the approach the Cabinet of Ministers took when determining the amount of the benefit, which only took into account matters related to the state budget and not the actual increase in living expenses and the overall economic situation. Furthermore, the Cabinet of Ministers had failed to review the amount of social security benefit.“

Cobalt‘s team included Managing Partner Lauris Liepa, Associates Toms Krumins and Gabriela Santare, and Assistant Lawyer Maira Puzule.

Cobalt has successfully represented Latvian Television in a copyright and competition dispute against All Media Latvia that reached Latvia’s Supreme Court.

Ultimately, the Supreme Court upheld a lower court’s decision dismissing All Media Latvia’s claim that alleged a breach of copyright, unfair competition, and sought damages.

All Media Latvia, previously known as Latvijas Neatkariga Televizija, claimed that Latvian Television’s morning show “Rita Panorama” imitated the format of its “900 Sekundes” show, in breach of the country’s Copyright Act and Competition Act.   

According to Cobalt, in making its decision, the Supreme Court for the first time discussed a TV format as the property of its creator. According to the firm, “the Supreme Court explained that, in principle, a TV format may be protected, but no one has the right to monopolize an entire class of television programs (genre). Having recognized that the prohibition of unfair competition is actionable in a dispute over a TV format, the court listed the criteria of an infringement and agreed that in the case at hand they had not been fulfilled.” 

Cobalt’s team consisted of Senior Associate Linda Birina and Associate Ivo Maskalans.

TGS Baltic has successfully represented the Anti-Doping Bureau of Latvia in the Court of Arbitration for Sport.

According to TGS Baltic, the Anti-Doping Bureau of Latvia is “a national anti-doping organization, internationally known as LAT-NADO, which in accordance with Sports Law, inter alia, performs also doping control, conducts examination and investigation of infringements of the anti-doping regulations, ensures control of execution of the decisions taken by the competent anti-doping bodies, [and] implements educational and research measures in the field of anti-doping.”

According to TGS Baltic, “in 2018, a Latvian powerlifting athlete was disqualified by … the Latvian Powerlifting Federation’s Disciplinary Commission for a period of four years. The athlete was [found] guilty of infringing the provisions of the World Anti-Doping Code. On June 17, 2020, the Court of Arbitration for Sport ruled that it lacks jurisdiction to hear the appeal filed by the athlete.”

TGS Baltic’s team was led by Partner Agnese Hartpenga.

Cobalt Riga has created Patents, Trademarks, and Designs and Data Protection, IT, and Media subgroups within its IP&IT Practice Group, “to address ever-growing demand for legal services in the fields of intellectual property, data protection, information technology, pharmaceuticals, and life sciences.”

Cobalt Senior Associate Liga Fjodorova heads the new Patents, Trademarks and Designs subgroup. Cobalt reports that Fjodorova “is a licensed Latvian and European Trade Mark Attorney,” and claims that “for more than ten years [she] has been one of the leading intellectual property law experts in Latvia.”

The new Data Protection, IT and Media subgroup will be headed by Senior Associate Linda Birina, who is, according to Cobalt, “one of the leading Latvian experts in the field of media law and privacy protection.”

Cobalt’s IP&IT practice group, which was formerly headed by Ingrida Karina-Berzina, will, going forward, be headed by Partner Indrikis Liepa, who will also continue to lead the Pharmaceuticals, Healthcare and Life Sciences subgroup. Karina-Berzina has left the firm, Cobalt reports, “to focus on full-time Ph.D. studies of law at a top-ranked European university while continuing teaching at the Stockholm School of Economics in Riga and the Riga Graduate School of Law.” 

In an official statement, Cobalt announced that it “extends sincere thanks for Ingrida’s significant contribution to the development of the firm and wishes her every success in academical research and educating new generations of IP&IT lawyers.”

In accordance with statistical data from 2018 and 2019, Latvia’s State Agency of Medicines concluded that there is a high risk of unavailability of state-reimbursed medicines in the Latvian pharmaceutical market, mainly as a consequence of the behavior of the wholesalers. The same conclusion was reached by the Competition Council of the Republic of Latvia which, in late 2018 and 2019, published two reports on the availability of medicines. Accordingly, it was concluded that the existing regulatory framework was unable to provide an effective market protection mechanism to reduce the risk that patients in Latvia might not have access to state-reimbursed medicines, because after these medicines are made available in Latvia by producers or importers, they are exported to third countries or other EU member states by other market participants.

On March 17, 2020, Latvia’s Cabinet of Ministers adopted Regulation No.416 “Procedures for the distribution and quality control of medicinal products” (the “Regulation”), comprehensively amending the existing regulatory framework to protect Latvian patients. The Regulation is expected to solve the insufficiencies in the supply of medicines in Latvia.

First, the amendments to the Regulation implement a procedure for controlling and even banning the export of state-reimbursed medicines for which the National Health Service and the producer have concluded an agreement on financial participation. Thus, the National Health Service will be able to exercise control over the amount of medicines that may be exported under any agreements involving it and a producer and, under strictly defined conditions, even ban their export altogether. Imposition of an export ban will only be available where the risk of a potential deficit is demonstrated either by referring to existing interruption of the supply, which has been properly communicated to the National Health Service, or the fact that insufficient availability of the medicines in question has been identified during the previous three-month period. As a result, it is expected that the primary goal of the wholesale activity, which ought to be the local supply of the state-reimbursed medicines, especially within the context of public service obligations, will be ensured.

Second, the amendments to the Regulation establish a system for exchanging information between wholesalers and the State Agency of Medicines (SAM) about the inventory of medicines held by each wholesaler. It imposes a duty on each wholesaler to inform SAM of their inventories on each business day, using an electronic data transfer system. As this information is already available to most wholesalers, only technical modifications were necessary to provide SAM with access as well. In addition, individual pharmacies will also be able to access the system to verify availability of medicines in the inventory of any specific wholesaler.

Third, the amendments to the Regulation establish a more transparent mechanism for ordering both state-reimbursed and non-reimbursed medicines by pharmacies, when their own inventory does not have the necessary amounts. Previously, many wholesalers failed to live up to their public service obligation to provide medicines to requesting pharmacies within a 24-hour timeframe. The new regulatory framework will help to monitor wholesaler compliance with supply obligations and to reduce the risk that wholesalers may prefer to supply their own integrated pharmacies and not dispense the medicines to the pharmacy where the end patient requests it.

Some of the minor amendments to the Regulation involve, inter alia, requirements for complying with good distribution practices for medicinal products in customs warehouses and temporary storage facilities, requirements for the distribution of non-registered medicines, and conditions for provisions of medicines as gifts to medical treatment institutions.

It is yet to be seen whether the new regulatory framework can actually provide a solution to the growing problem of insufficiency of medicines locally. Nevertheless, it is worth noting that the creation of a transparent and functional export and inventory control system is the way forward, in order to balance the interests of all the parties concerned and not to usurp the interests of patients that ought to be the true beneficiaries of the mechanism for state-reimbursed medicines.

By Indrikis Liepa, Partner, and Janis Sarans, Attorney, Cobalt

This Article was originally published in Issue 7.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Sorainen has advised Nasdaq CSD SE on a cross-border merger with Nasdaq CSD Iceland hf. 

Nasdaq CSD is headquartered in Latvia and also provides central securities depository services in Lithuania and Estonia. “With this transaction, it has consolidated Baltic and Icelandic CSD services under one company, thus achieving higher efficiency and greater competitiveness,” Sorainen reports. “After the merger, Nasdaq CSD SE will operate in Iceland via a branch.”

Sorainen’s team included Partner Rudolfs Engelis, Counsel Martins Rudzitis, and Senior Associate Zane Paeglite.