The government of Latvia is purposefully performing all necessary measures in order to introduce the euro as the official currency in Latvia starting from 1st January, 2014. As regards the transition from Latvian lats to euro the Parliament of Latvia, Saeima, has issued the Law on the Procedure for the Introduction of the Euro, hereinafter referred to as the Law. The Law came into force on 1st March, 2013. The purpose of this Law is to ensure the efficient and transparent introduction of the euro to the Republic of Latvia.
According to the Law the day of introduction of the euro to the Republic of Latvia shall be the day with the effect when the exemption for the Republic of Latvia is abrogated in accordance with provisions of the Consolidated version of the Treaty on European Union and the Treaty on the Functioning of the European Union. It is important to note that the introduction of the euro shall not affect the continuity of contracts and other legal instruments. References to lats in legal instruments existing on the day prior to the day of introduction of the euro, starting from the day of introduction of the euro, shall be considered as references to the euro. At present 1st January, 2014, is set as the day for the introduction of the euro to the Republic of Latvia.
● Principles of Rounding
The Law provides that when exchanging lats to euros the exchange rate specified by the European Council shall be applied. In addition the Law sets provisions for the rounding of exchanges from any kind of money resources as well as the unit price for goods and services from lats to euros.
● Introduction of Euro in cash, non-cash and electronic money
Cash changeover. Regarding the cash changeover the Law provides for a parallel circulation period lasting two weeks, starting from the day of introduction of the euro. The changeover of lat cash to euros in credit institutions shall be six months, starting from the day of introduction of the euro. However, the Bank of Latvia shall provide for an unlimited changeover period with regard to the term and amount of money for exchanges starting from the day of introduction of the euro. The exchange of money is free of charge.
Non-cash resources, electronic money or single-purpose payment instruments. Regarding non-cash resources, electronic money or single-purpose payment instruments, the Law determines that merchants or public persons holding non-cash resources, electronic money or single-purpose payment instruments at the beginning of the day of introduction of the euro shall be able to convert all the balances of lat non-cash resources, electronic money and single-purpose payment instruments into euros free of charge, and preserve the unchanged unique identifier of the account where before mentioned money resources are stored. Persons who, prior to the day of introduction of the euro, have payment accounts, including electronic money accounts, in lats and euros, are entitled, within two months of the day of introduction of the euro, to request the closing of one payment account and the transfer of the balance to the other payment account free of charge.
● Converting Prices for Goods and Services
The Law provides for a dual displaying period for prices of goods and services three months prior to the day of introduction of the euro, but not earlier than the day when the European Council specifies the exchange rate. This period shall last for six months following the day of introduction of the euro.
● Redenomination of Equity Capital Stocks (Shares) of Capital Companies
Denomination of equity capital stocks (shares) from lats to euros shall be performed, preserving the current proportion among the current participants (shareholders) of the capital company and minimising changes in the equity capital. Subject to the Law the nominal value of equity capital stocks of a limited liability company shall be expressed in euros, but of stocks of a joint stock company in euros and cents.
A capital company of which the nominal value of the equity capital stock (share) is expressed in lats, shall, within 30 months from the day of introduction of the euro, notify the authority of the Enterprise Register of any amendments to the statutes , providing for the nominal value of the equity capital stock (share) to be expressed in euros, and submit a document thereto, which includes information about the capital stocks owned by the participants.
Six months prior to the day of introduction of the euro but not earlier than the day when the Council has determined the conversion rate, the founders of a capital company have the right to express the equity capital and the nominal value of the equity capital stock (share) in euros in incorporation documents of the capital company on condition that the nominal value of the equity capital stock (share) shall be expressed in the euro equivalent and the amount of the equity capital shall not be less than the minimum amount of the equity capital specified in the Latvian Commercial Law and recalculated in euros.
Author
Mag.iur. Diana Lapina, ECOVIS Convents, Riga, Latvia
diana.lapina@ecovis.com
According to the Law the day of introduction of the euro to the Republic of Latvia shall be the day with the effect when the exemption for the Republic of Latvia is abrogated in accordance with provisions of the Consolidated version of the Treaty on European Union and the Treaty on the Functioning of the European Union. It is important to note that the introduction of the euro shall not affect the continuity of contracts and other legal instruments. References to lats in legal instruments existing on the day prior to the day of introduction of the euro, starting from the day of introduction of the euro, shall be considered as references to the euro. At present 1st January, 2014, is set as the day for the introduction of the euro to the Republic of Latvia.
● Principles of Rounding
The Law provides that when exchanging lats to euros the exchange rate specified by the European Council shall be applied. In addition the Law sets provisions for the rounding of exchanges from any kind of money resources as well as the unit price for goods and services from lats to euros.
● Introduction of Euro in cash, non-cash and electronic money
Cash changeover. Regarding the cash changeover the Law provides for a parallel circulation period lasting two weeks, starting from the day of introduction of the euro. The changeover of lat cash to euros in credit institutions shall be six months, starting from the day of introduction of the euro. However, the Bank of Latvia shall provide for an unlimited changeover period with regard to the term and amount of money for exchanges starting from the day of introduction of the euro. The exchange of money is free of charge.
Non-cash resources, electronic money or single-purpose payment instruments. Regarding non-cash resources, electronic money or single-purpose payment instruments, the Law determines that merchants or public persons holding non-cash resources, electronic money or single-purpose payment instruments at the beginning of the day of introduction of the euro shall be able to convert all the balances of lat non-cash resources, electronic money and single-purpose payment instruments into euros free of charge, and preserve the unchanged unique identifier of the account where before mentioned money resources are stored. Persons who, prior to the day of introduction of the euro, have payment accounts, including electronic money accounts, in lats and euros, are entitled, within two months of the day of introduction of the euro, to request the closing of one payment account and the transfer of the balance to the other payment account free of charge.
● Converting Prices for Goods and Services
The Law provides for a dual displaying period for prices of goods and services three months prior to the day of introduction of the euro, but not earlier than the day when the European Council specifies the exchange rate. This period shall last for six months following the day of introduction of the euro.
● Redenomination of Equity Capital Stocks (Shares) of Capital Companies
Denomination of equity capital stocks (shares) from lats to euros shall be performed, preserving the current proportion among the current participants (shareholders) of the capital company and minimising changes in the equity capital. Subject to the Law the nominal value of equity capital stocks of a limited liability company shall be expressed in euros, but of stocks of a joint stock company in euros and cents.
A capital company of which the nominal value of the equity capital stock (share) is expressed in lats, shall, within 30 months from the day of introduction of the euro, notify the authority of the Enterprise Register of any amendments to the statutes , providing for the nominal value of the equity capital stock (share) to be expressed in euros, and submit a document thereto, which includes information about the capital stocks owned by the participants.
Six months prior to the day of introduction of the euro but not earlier than the day when the Council has determined the conversion rate, the founders of a capital company have the right to express the equity capital and the nominal value of the equity capital stock (share) in euros in incorporation documents of the capital company on condition that the nominal value of the equity capital stock (share) shall be expressed in the euro equivalent and the amount of the equity capital shall not be less than the minimum amount of the equity capital specified in the Latvian Commercial Law and recalculated in euros.
Author
Mag.iur. Diana Lapina, ECOVIS Convents, Riga, Latvia
diana.lapina@ecovis.com
