NCCL condemns the discriminatory practice against shopping centre owners and operators in Latvia
08 April 2021
On April 8, the Norwegian Chamber of Commerce in Latvia, representing the biggest Norwegian investors in Latvia sent a letter to the Prime Minister of Latvia and the Cabinet of Ministers condemning the discriminatory practice when it comes to government-imposed COVID-related restrictions on operation and available support measures to shopping centres in Latvia.
"With this letter NCCL expresses our support to the appeal by Latvian shopping centres to the Latvian government to develop and implement a support mechanism that compensates the losses caused by the restrictions aimed at combating the COVID-19 pandemic, which are as of this date still kept in place with respect to shopping centres.
Norway is among the largest foreign investors in Latvia, with investments exceeding EUR 350 million in 2021. Among Norwegian investors a large share have invested in the real estate sector, including in the development of Latvian shopping centres. This is more than 100 million worth of investments in Latvia's economy and development of the urban environment of Riga, as well as many millions paid in taxes into Latvian tax system. Following the COVID-19 pandemic, the rules adopted by the Latvian government that restrict the business of shopping centres have made a substantial negative impact on the operation of the centres by preventing them from operating in their sector and generating revenue that could be used to cover their maintenance costs. Last week's decision to open shops outside of shopping centres further aggravates the situation and increases unfair competition.
In the current situation, the restrictions imposed by the Latvian government prevent foreign investors from exercising the right to property provided in the Constitution of Latvia and place them in an unequal position compared to other economic sectors and players. Furthermore, unlike other sectors, for which the government of Latvia has decided to develop compensation mechanisms, these existing mechanisms do not reach the developers and managers of shopping centres. From the point of view of existing and potential foreign investors this signals that different, less favourable conditions are applied to them, as compared to local market players.
The large shopping centres are not only buildings and structures; instead, they are important infrastructure in the retail ecosystem of Latvia, and their bankruptcy would not only hurt the foreign investors, but also Latvia's residents - small company owners and tenants, those working in retail and the related supply chains. The above-mentioned investors are not only developers of shopping centres - they have invested and are developing also other commercial properties and thus represent an important driver of Latvian economy. The decisions of the government of Latvia, which discriminate against foreign investors, undermine Latvia's image in the eyes of foreign investors. This will have a negative effect on attracting foreign investment to Latvia in the long term, causing material harm to all commercial property sectors and to Latvia's regional competitiveness."
Chairman of the Board
Norwegian Chamber of Commerce in Latvia
The original letter in Latvian is enclosed here!
< Back to news