Latvia was allowed to continue implementing the mandatory procurement component (OIK) mechanism, according to a letter from the Ministry of Finance of Latvia to the Saeima Requests Commission.
In its response to a parliamentary request regarding allegedly unlawful OIK payments, the ministry stated that the institution responsible for introducing and supervising the mechanism is the Ministry of Climate and Energy of Latvia, while until 2023 these responsibilities were carried out by the Ministry of Economics of Latvia.
The ministry explained that the European Commission had found the OIK support measures to have been introduced unlawfully due to procedural reasons. However, the Commission simultaneously determined that the scheme was compatible with the European Union internal market. As a result, Latvia was permitted to continue the mechanism and was not required to recover the support that had been granted.
Regarding the support scheme for TEC‑2 Combined Heat and Power Plant, the Finance Ministry emphasised that a separate evaluation was required due to technical procedural criteria and was not related to the collection of OIK payments from households or businesses.
The ministry also stated that there is no legal basis for creating a compensation mechanism,
because EU state aid control rules apply to market participants rather than to private individuals. It also reminded lawmakers that the responsibility of officials had already been examined by a parliamentary investigation commission and that there are no grounds for launching another review.
Members of the opposition United List faction have submitted a request in the Saeima, which has been referred to the Requests Commission. The request is addressed to Finance Minister Arvils Ašeradens and Economics Minister Viktors Valainis and describes the OIK system introduced in the past as unlawful.
The request, titled “On the responsibility of officials and state inaction regarding unlawful mandatory electricity procurement payments,” is based on a 2017 report by the European Commission, which the opposition claims indicated that Latvia’s state aid for renewable energy in the form of OIK was unlawful because it had not been approved by the Commission in advance.
A similar position has been promoted by the organisation Tiesiskums,
which has launched an initiative seeking to recover what it considers unlawfully collected OIK payments.
Opposition lawmakers argue that the OIK system was introduced in violation of EU state aid rules and that the Commission identified a breach of the so-called standstill obligation in 2017, which allegedly created an unjustified financial burden for households and businesses.
They are now seeking clarification on which officials in the Finance Ministry and the Economics Ministry allowed the OIK mechanism to be implemented without a final decision from the European Commission, and whether their responsibility has been assessed. They also want to know why the collection of OIK payments continued after 2017, including in relation to the TEC-2 power plant, and what measures were taken to stop allegedly non-compliant payments. In addition, they are asking how the state plans to compensate the sums collected before and after the 24th of April 2017.
Energy expert Juris Ozoliņš previously told LETA that the OIK system implemented in Latvia was legal. In his view, the initiative by the organisation Tiesiskums to reclaim OIK payments is unfounded and may serve primarily as a questionable way to make money.
Ozoliņš described references to the European Commission’s 2017 report as “completely fabricated,”
stating that the report does not say the support scheme was unlawful or illegal. Instead, it was a response to Latvia’s notification explaining how the country was applying an EU support scheme under existing directives. The only remark from the Commission, he said, was that it would have been preferable if Latvia had notified the scheme earlier.
Meanwhile, the Prosecutor General’s Office of Latvia has launched a review following a submission by Jānis Patmalnieks, a member of parliament from New Unity. The review is examining whether the activities of the organisation Tiesiskums may conflict with the Advocacy Law or provisions of the Criminal Law.
Patmalnieks has pointed to possible violations of lawyers’ ethical rules and legislation in the campaign to reclaim OIK payments. These include alleged unauthorised provision of legal services, contracts that may disadvantage clients, misleading advertising and the use of prohibited success fees.
He also stressed that promises to recover OIK payments are legally unfounded, as final consumers have no legal basis to claim repayment of those funds.
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