Latvia acts in accordance with principle of self-protecting democracy by taking over Moscow House in Riga - ministry

RIGA - By taking over the ownership Moscow House in Riga, Latvia is acting in accordance with the principle of self-protective democracy, which is aimed at protecting Latvia's national security, Foreign Ministry's press secretary Diana Eglite told LETA.

She noted that in the current geopolitical circumstances, when the owner and users of the property at 7 Marijas Street in Riga are carrying out activities that pose a significant threat to national security, the state needs to take special measures to protect the stability and effectiveness of the democratic system.

The Foreign Ministry's press secretary drew attention to the fact that on December 21 last year the Saeima approved in first reading the draft law on the actions with the real estate property necessary to prevent a threat to national security.

The Saeima declared this draft law urgent and accordingly it will be adopted in two readings. 

As reported, Rietumu Banka has called on the Saeima not to rush with the takeover of the Moscow House into state ownership, as the consequences of this law will affect Latvian merchants whose assets are located in Russia.

The bank drew the attention of MEPs to the fact that the adoption of such a law would give the aggressor state grounds to take identical action against Latvian companies, including Rietumu Banka, whose assets have been frozen in Russia in connection with Russian sanctions, in order to nationalize them.

Rietumu Banka's 2022 annual report states that the bank's exposure to Russia at the end of 2022 is EUR 129 million and to Belarus - EUR 18 million. By asset type, the main exposures are loans to customers and receivables (94 percent).

In 2022, a decision was taken to stop financing new leasing transactions and to start full amortization of the group's Belarusian leasing portfolio in order to reduce the overall exposure to Belarus. In 2023, the Bank planned to significantly reduce the credit exposure to Russia and Belarus by refinancing loans or selling them to professional market participants.

LETA also reported that Kremlin spokesman Dmitry Peskov said late last year that Russia had prepared a list of assets of foreign investors that it intended to seize in case of confiscation of the Central Bank's frozen reserves. He said that the idea of confiscation discussed by the West violates international law and is theft in the truest sense.

As reported, a bill providing for a takeover of Moscow House at 7 Marijas Street in Riga by the Latvian state is currently making its way through the Saeima.

The draft law is intended to ensure Latvia's national security, including by a timely prevention of threats to Latvia's democratic order.

According to the authors of the draft law, it will ensure that political activities that may threaten Latvia's national security and that take place under the guise of cultural events and interest education in Moscow House will be stopped, Moscow House as a "brand" of Russian compatriots' politics will be closed and the threat to Latvia's statehood and national security will be prevented.

The international sanctions introduced against Russia have made it more difficult for Moscow House to operate, but have not completely curtailed or stopped them. The State Security Service has noted that, even after February 24, 2022, the premises of Moscow House have been leased to persons whose activities suggest of support for Russia's aggressive foreign policy.

As Moscow House has been serving as a venue for hostile and harmful activities for a long time and the concentration of such dangerous political ideas threatens the security of the Latvian state and its democratic order, Latvia is obliged to take active measures against the existence of a venue supporting such activities, the annotation of the draft law states.

Moscow House officially belongs to the Property Department of Moscow City. JSC Moscow Culture and Business Centre Moscow House, owned by Moscow City's Property Department, has historically been Moscow House's legal representative. Since March 10, 2020 this function has been taken over by the State Unitary Enterprise Moscow Centre for International Cooperation. Its rights to use the property indefinitely has been registered in the Land Register of Latvia. The structure of both these legal entities is linked to a direct influence of Russia and Moscow, according to the annotation to the draft law.

The transitional provision of the draft law stipulates that the Cabinet of Ministers has until March 31, 2024 to submit a report to the Saeima on the further management of the property. The authors of the bill suggest using the property to provide assistance to Ukraine or Ukrainians, taking into account that Latvia has no intention to enrich itself or benefit from the takeover of Moscow House.