We invite merchants operating in the fields of defence, electronic communications, mass media, electricity, heating supply and natural gas circulation to pay special attention to this news.
On 14 November, amendments to the National Security Law (the Law) adopted by the Saeima entered into force. With these amendments, the range of subjects to which the Law applies is expanded, which means that these amendments are especially important for merchants who have become subjects of the Law as a result of these amendments. Also, with the amendments, a new case is defined when companies important to national security need to receive permission from the Cabinet of Ministers (CM).
The most important changes are:
Extended range of subjects
With these amendments to the Law, the legislator has significantly expanded the range of subjects to which the Law applies. Previously, it was determined that the restrictions apply to a commercial company registered in the Republic of Latvia that meets specific conditions, but with the new amendments the subject can be not only a commercial company, but also a foundation or an association. The Law also sets new conditions/types of activities for commercial companies, associations or foundations to be considered to be of national security importance (e.g. manufacturers, developers, exporters of dual-use goods, companies with access to voter data). At the same time, it is stipulated that the same restrictions and obligations imposed on other companies of importance to national security shall also apply to companies owning or holding critical infrastructure.
A new case when the permission of the CM is required
The Law stipulates that companies important to national security need to obtain the permission of the CM to carry out certain activities. With the amendments, the legislator has included in the Law a new case when companies important to national security need the permission of the CM: to receive a loan if its total amount exceeds 10 per cent of assets and it is received from a natural person who is a national of a country that is not a member of the European Union, the European Free Trade Association, the North Atlantic Treaty Organisation or the Organisation for Economic Cooperation and Development, or from a legal person whose beneficial owner is a national of a country that is not a member of the European Union, the European Free Trade Association, the North Atlantic Treaty Organisation or the Organisation for Economic Co-operation and Development.
What should commercial companies, associations and foundations do?
It is important for commercial companies, associations and foundations to check whether they do not meet the extended conditions of the Law that would classify them as “important for national security”. In the event that this status is established, the relevant commercial company, association or foundation is obliged to perform specific actions, for example, to submit a notification to the Register of Enterprises of the Republic of Latvia on the status of the association or foundation important to national security, as well as to provide the responsible authorities with other information provided by the Law.