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  In effect as of 11 April 2000. 

  Text consolidated with amending laws of:
  27 July 2001;
  22 May 2003.

The Saeima has adopted and
the President has proclaimed the following Law:

The Freeport of Riga Law

Chapter I
General Provisions

Section 1. Terms used in this Law
The following terms are used in this Law:
1) territory of the freeport – a part of the territory of the Republic of Latvia, corresponding to the Freeport of Riga borders determined by the Cabinet;
2) Port Authority – the Riga Port Authority established in accordance with the Law On Ports;
3) licensed company – an undertaking (company), which has entered into a contract with the Port Authority regarding entrepreneurial activity under a free zone regime and has obtained permission of the Port Authority for such activity;
4) free zone regime – a set of tax relief and special customs control measures that are to be applied to undertakings (companies) whose territories have obtained the status of free zones in the Freeport of Riga, as well as to the Port Authority;
5) free zone – a demarcated part of the territory of the freeport where imported goods in respect of the application of customs duties and trade policy measures are treated as equivalent to goods which are outside the customs territory of the Republic of Latvia;
6) territory of a licensed company – a territory, wherein land is used by a licensed company on the basis of property rights, a lease agreement or other legal basis; and
7) port clients – consignees, consignors, their authorised representatives – forwarding agents, ship-owners, their authorised representatives – shipping agents and other persons who on a legal basis use the services of the Port Authority and licensed companies but who do not have their own territory in the freeport.

Section 2. Purpose of this Law
This Law determines the principles of operation and management procedures for the Freeport of Riga (hereinafter – the Freeport) in order to promote the participation of Latvia in international trade, attract investments, develop manufacturing and services, as well as create new jobs.

Section 3. Basic Provisions regarding Entrepreneurial Activities Carried out at the Freeport
(1) Entrepreneurial activities in the territory of the Freeport may be carried out by licensed companies as well as by undertakings (companies) which have not obtained permission for carrying out entrepreneurial activities under a free zone regime.
(2) Tax relief and special customs control measures determined by this Law shall apply to undertakings (companies) which have entered into a contract with the Port Authority regarding entrepreneurial activity under a free zone regime, and have obtained permission in accordance with the procedures set out in this Law for the carrying on of such an activity, as well as with the Port Authority. The territories of the referred to undertakings (companies) are free zones.
(3) The importation of goods into the existing free zones in the Freeport from the rest of the customs territory of the Republic of Latvia and the exportation of them from the referred to zones into the rest of the customs territory of the Republic of Latvia may only be effected through the customs border entry and exit points in accordance with the procedures provided for by the Customs Law, other laws and Cabinet regulations.

Section 4. Legal Relations in the Territory of the Freeport Pertaining to Land
(1) State and local government land within the territory of the Freeport may not be sold, gifted or otherwise alienated.
(2) The waters (aquatorium) of the Freeport are the property of the State.
(3) The land in the Freeport owned by natural persons and legal persons may be sold, gifted, exchanged or otherwise alienated in accordance with the procedures prescribed by the Law On Ports.
(4) With this Law, a personal servitude on the land owned by natural persons and legal persons that, pursuant to this Law, is occupied by the Freeport, is established for the benefit of the Port Authority. The Port Authority is entitled to use the land owned by natural persons and legal persons in its territory for the needs of the port, as well as to lease it to undertakings (companies) operating in the territory of the Freeport, without any right to sublet it.
(5) The user of the servitude may construct such buildings and structures as are necessary for the operation of the port on the land in its territory, as well as allow the construction of such by undertakings (companies) to which the land has been leased out, providing in the contract for action with such buildings and structures in the case of termination of the land lease contract.
(6) Upon the cessation of servitude rights, the owner of the land may not request that the land be returned to him or her until he or she has paid compensation for the buildings and structures.
(7) The Port Authority shall pay taxes and cover expenses relating to the maintenance of the land referred to in Paragraph four of this Section, whereas the other burdens resting upon the land shall be attached to and fulfilled by the owner of the land.
(8) The user of the land shall pay compensation for the servitude to its owner in accordance with their contract, however, such compensation shall not exceed five per cent annually of the cadastral value of the land.
(9) The Port Authority has the right to unilaterally enter the servitude rights established by this Law into the Land Register.
[22 May 2003]

Chapter II
Organisation of the Freeport Management

Section 5. Management of the Freeport
(1) Management of the Freeport shall be carried out by the Riga Port Authority (hereinafter – the Port Authority) whose competence is determined by this Law, the Law On Ports, the By-laws of the Riga Freeport Authority and the Riga Freeport regulations, which regulate the internal regime of the Freeport.
(2) The Port Authority is a legal person. It shall enjoy the same customs duty relief as licensed companies.

Section 6. The Board of the Port
(1) The Board of the Port shall be the highest decision-making institution of the Port Authority. Its members shall be appointed to and released from their positions in accordance with the procedures set out in Section 8 of the Law On Ports.
(2) The administrative staff of the Port Authority shall be managed by a Chief Executive Officer who is appointed to and released from his or her position by the Port Authority after co-ordination with the Minister for Transport.

Chapter III
Customs Regime in the Freeport

Section 7. Importation of Goods into Free Zones and Exportation Therefrom
Procedures as to how goods are to be imported into free zones from the rest of the customs territory of the Republic of Latvia and exported to the rest of the customs territory of the Republic of Latvia shall be regulated by this Law, as well as other laws and Cabinet regulations.

Section 8. Registration of Goods in the Freeport
Licensed companies shall ensure the registration of the goods imported into, and produced within, their territory and of the goods exported therefrom.

Section 9. Natural Persons Subject to Customs Control
Natural persons when entering a free zone and leaving it are subject to customs control.

Chapter IV
Entrepreneurial Activity in the Freeport

Section 10. Regulations regarding Entrepreneurial Activities in the Freeport
(1) The loading, supply, storage, processing of goods (freight) and other services, and the production of goods under a free zone regime shall be carried out by undertakings (companies) which are registered in the Republic of Latvia, have entered into a contract regarding entrepreneurial activity under a free zone regime and have obtained a permit from the Port Authority for the carrying out of such activities.
(2) The Port Authority shall establish a register of licensed companies.
(3) Undertakings (companies) which have not entered into a contract with the Port Authority regarding entrepreneurial activity under a free zone regime may, within the territory of the Freeport, carry out entrepreneurial activity without the application of the relief prescribed for licensed companies and subject to the control of the Port Authority within the scope of its competency. The said undertakings (companies) have no right to carry out entrepreneurial activity within the territory of free zones.
(4) [22 May 2003]
[27 July 2001]

Section 11. Conditions for the Application of the Freeport Regime
(1) A free zone regime shall apply only to such undertakings (companies) whose territory in the Freeport is demarcated and secured by one or more adequately organised customs border entry and exit points and by guards who ensure that the movement of goods and persons to and from the territory of the licensed company complies with customs requirements. Each licensed company shall ensure the security of its territory.
(2) Undertakings (companies) to which a free zone regime is applied may not carry out entrepreneurial activities outside the territory of the Freeport, except for the activities referred to in Paragraph three of this Section.
(3) The following shall not be considered as an entrepreneurial activity outside the territory of a licensed company:
1) the location of the administrative body or an agency of an undertaking (company) outside the demarcated territory;
2) the negotiation of transactions and contracting outside the demarcated territory;
3) other activities which do not have goods-money transaction characteristics; and
4) the transit of goods through the demarcated territory.

Section 12. Procedures for Entering into a Contract regarding Entrepreneurial Activity in the Freeport and the Issue of Permits
(1) An undertaking (company) which has already been established or will be established in the future (the applicant is the founder) in the Freeport is entitled to apply for the entering into of a contract and the obtaining of a permit, in observation of the following prerequisites:
1) the profile of activities and the development prospects of the undertaking (company) shall conform to the development programme of the Freeport which has been approved by the Board of the Port; and
2) the founders and the shareholders of the undertaking (company) shall have a good reputation, a stable financial position and experience in the field of entrepreneurial activities (such information shall not be requested in respect of local governments and the State as founders and shareholders, however, it may be requested in respect of State and local government undertakings).
(2) Contracts regarding entrepreneurial activity in the Freeport may be entered into regarding specific types of activity. A contract may be entered into regarding several types of activities.
(3) An applicant shall submit to the Board of the Port the following documents for entering into a contract and obtaining a permit:
1) an application;
2) a notarially certified extract of the registration certificate issued by the Enterprise Registry;
3) a notarially certified copy of the articles of association;
4) annual accounts for two years approved by sworn auditors (auditors) (or – with the consent of the Board of the Port – an extract of abridged accounts); and
5) a programme of operations, including an investment programme.
(4) A decision regarding the entering into a contract with an applicant shall be taken by the Board of the Port within a three-month period after the submission of the documents referred to in Paragraph three of this Section. The application of an applicant shall be rejected if the prerequisites referred to in Paragraph one of this Section are absent.
(5) If an applicant is the founder of an undertaking (company) to be founded, a decision regarding the entering into a contract with the applicant may be taken by the Board of the Port on the basis of the documents of incorporation and a draft programme of operations, issuing simultaneously a temporary permit. The decision regarding the entering into a contract shall be in effect for six months. If, during this time, the undertaking (company) is not founded, the decision shall cease to be in effect.
(6) A contract regarding entrepreneurial activity under a free zone regime shall be entered into for a term that is not less than five years.
(7) A contract regarding entrepreneurial activity under a free zone regime shall be the basis to issue a permit for the carrying out of entrepreneurial activities in the Freeport. The permit shall be issued for the term of the contract after the readiness of the undertaking (company) for operations in the Freeport has been checked. The Port Authority shall ensure the registration of permits.

Section 13. Procedures as to How a Contract regarding Entrepreneurial Activity in the Freeport is to be Terminated Prior to the Expiration of its Term and the Cancellation of Permits
(1) A contract regarding entrepreneurial activity in the Freeport may be terminated prior to the expiration of its term by a decision of the Port Authority, if it is determined that the licensed company violates laws, other regulatory enactments or the contract that has been entered into.
(2) Concurrently with a decision on the early termination of a contract, the Board of the Port shall take a decision on the cancellation of the permit and specify the date by which the decision is to be executed.
(3) An undertaking (company) for which a permit for entrepreneurial activity under a free zone regime is to be cancelled, is entitled to carry out entrepreneurial activities in accordance with general provisions unless, due to the nature of the violation, it is prohibited from entrepreneurial activities in accordance with the procedures prescribed by law.

Section 14. Liability for Early Termination of a Contract and the Adjudication of Disputes
(1) The Port Authority shall be held liable, in accordance with The Civil Law, for the early termination of a contract or the cancellation of a permit without any grounds for it.
(2) Disputes concerning the early termination of a contract, the cancellation of a permit or compensation for losses shall be adjudicated by a court according to jurisdiction or – after mutual agreement between the parties – by an arbitration court or a foreign court.

Section 15. Duty-Free Shops
[27 July 2001]

Section 16. Issue of a Certificate of the Origin of Goods
The Port Authority, in accordance with procedures determined by the Cabinet, is entitled to issue a certificate of general form (non-preferential) which certifies the manufacture or processing of goods in a licensed company, as well as a certificate which certifies the fact that the goods transported through the territory of a licensed company located in the Freeport have not been processed in this territory.

Section 17. Payment of Tax Regime
[27 July 2001]

Section 18. Liquidation of the Freeport
The Saeima shall decide on the liquidation of the Freeport by adopting a special law.

Transitional Provisions

1. With the coming into force of this Law, the Riga Commercial Freeport Law is repealed (Latvijas Republikas Saeimas un Ministru Kabineta Ziņotājs, 1996, No.23).
2. To ensure the operation of this Law in all the territory of the Freeport and the continuity of operations of the undertakings and companies located in the territory of the Riga Commercial Freeport, to settle the financial relations between the Port Authority, the State joint stock company Rigas tirdzniecības osta [Riga Trade Port] and the subjects of economic activities of the Riga Commercial Freeport, as well as to adopt decisions concerning property and other questions, the Cabinet shall, within a one-month period from the date of the coming into force of this Law:
1) establish and approve the reorganisation commission of the State joint stock company Rigas tirdzniecības osta;
2) determine the procedures as to how the State joint stock company Rigas tirdzniecības osta is to transfer to the Port Authority berths, surface and underground communications systems and other objects of property in its possession, including immovable property together with all the encumbrances associated with it, as well as the credit liabilities guaranteed by the State, and other rights and obligations; and
3) determine the status of further actions of the State joint stock company Rigas tirdzniecības osta.
3. The Port Authority shall, within a six-month period from the date of the coming into force of this Law, take over the administration of the Riga Commercial Freeport and berths, surface and underground communications systems and other objects of property in its possession, including immovable property together with all the encumbrances against it, as well as credit liabilities guaranteed by the State and other rights and obligations, and renew contracts with licensed companies which operate in the Riga Commercial Freeport.
4. [27 July 2001]

This Law has been adopted by the Saeimaon 9 March 2000.

President V.Vīķe-Freiberga

Riga, 28 March 2000