Baltic Report: January 31, 2003

NOTE TO READERS:
This issue covers events in the Baltic states from 18 to 24 January 2003.
KALININGRAD TRANSIT SQUABBLE FLARES UP.
Lithuania has decided to halt the transit through its territory of Russian military personnel traveling between Kaliningrad Oblast and the rest of Russia as of 1 February, nns.ru reported on 21 January, citing a Russian Foreign Ministry statement. As of that date, Lithuania will stop recognizing military identification cards and birth certificates as legitimate travel documents. The Russian Foreign Ministry charged that the new policy violates the agreement reached by Moscow and Vilnius concerning Russian access to Kaliningrad (see "RFE/RL Newsline," 12 November 2002). However, the Lithuanian Bureau for European Integration responded that the agreement contains a complete list of acceptable travel documents and that list does not include military identification cards or birth certificates, "Nezavisimaya gazeta" reported on 21 January. A spokesman for the Kaliningrad Oblast-based Baltic Fleet said that 95 percent of its servicemen do not have foreign passports, "Kommersant-Daily" reported on 21 January (see related item in Lithuanian section below).

FISH FROM BALTIC SEA FAIL EU DIOXIN TESTS.
Latvia's Food and Veterinary Service announced on 22 January that tests conducted in the United Kingdom found excessive dioxin levels in six of the 16 Baltic herring and sprat samples from the Gulf of Riga and Latvia's Baltic Sea coast, BNS reported. The service stated that it believes tests should be carried out in Latvia, as the busy EU laboratories are unable to provide results more quickly than six months. The EU forbids the export of fish and fish products contaminated with dioxin. Since Latvia, Estonia, Finland, and Sweden are the only countries undergoing such dioxin tests, the EU has no data on the situation in other waters, such as the Mediterranean Sea. The head of an Estonian fishery company said that if tests being conducted in Germany confirm excessive dioxin levels in Estonian-caught herring, the Estonian fishing industry, which depends on exports, will be ruined, ETA reported the next day.

BALTIC, NORDIC ARMY CHIEFS STRESS CONTINUED COOPERATION.
A meeting of commanders of the Nordic and Baltic states in the northern Estonian town of Rakvere on 24 January discussed regional security and the future of joint projects, emphasizing the importance of continued cooperation, BNS reported. The last such working meeting took place in January 2002 in Norway. Estonian Vice Admiral Tarmo Kouts said joint Baltic defense projects supported by the Nordic countries should continue and be adapted to NATO needs. He said, "Small countries can make an efficient contribution to the alliance if they develop and specialize in a particular capacity."

* The Finnish daily "Helsingin Sanomat" on 24 January quoted the head of the HEX Group Jukka Ruuska as stating that the Helsinki, Tallinn, and Riga stock exchanges, which the group owns, should merge into a single trading house by May 2004 when Estonia and Latvia become members of the European Union, BNS reported. The merger should not result in a great expansion since there are only 14 and 62 companies, respectively, being traded on the Tallinn and Riga stock exchanges.

UNIONS THREATEN TO SUE GOVERNMENT.
Estonian Central Trade Union Association (EAKL) Chairwoman Kadi Parnits told parliament on 21 January that labor unions are planning to take the government to court over alleged compliance with the Collective Agreements Act, BNS reported. She said the move was prompted by a 14 January letter from Social Minister Siiri Oviir announcing that the ministry will not endorse an agreement reached between the Estonian Employers Central Union, the EAKL, and the White-Collar Trade Unions Organization (TALO) concerning minimum wages for 2003. The minister's action "violates the stipulations of the Collective Agreements Act on the registration and extension of collective agreements that rely on Article 4 of ILO [International Labor Organization] Convention 98," Parnits alleged. She also blamed the government for not having complied with agreements signed with the trade union concerning the tax-exempt income level, unemployment benefits, and greater financing of employment measures. Parnits is second behind party Chairman Ivari Padar on the opposition Moderates party lists for the March parliamentary elections. The Moderates control 17 seats in the 101-member parliament. Prime Minister Kallas said in a radio interview on 24 January that a court battle with the unions would be a good thing as it would make clear the status of the agreement, BNS reported.

FUTURE OF EU DISCUSSED WITH FINNISH PREMIER.
In talks in Helsinki on 22 January, Prime Ministers Siim Kallas and Paavo Lipponen discussed bilateral relations and the future of the European Union, BNS reported. Lipponen expressed satisfaction that both countries have maintained similar positions at the European Convention on the future of the EU, opposing proposals that would curb the interests of small countries and create problems for the EU's stability. The prime ministers also agreed on the need for greater cooperation on safety and environmental issues in the Baltic Sea, in which Estonia has proposed banning single-hulled oil tankers. Kallas on 23 January was scheduled to visit the Loviisa nuclear-power plant and the Santahamina cadet school, where many Estonian officers have received specialized training, before returning to Tallinn.

PARLIAMENT PASSES NEW BANKRUPTCY LAW.
Lawmakers approved a new bankruptcy act on 22 January with 54 votes in favor in the 101-seat legislature, BNS reported the next day. The government had proposed the legislation, which is aimed at speeding up bankruptcy proceedings and making supervision of trustees more effective. The new law reduces the number of stages in which creditors are entitled to payments from bankrupt estates, establishes a limit on the extent to which holders of secured claims must cover the cost of proceedings, and introduces special terms for bankruptcy proceedings for individuals. Backers say it also offers an improved framework for the recovery of companies facing insolvency, rather than liquidation, and provides more clearly defined rules for preventing abuses by people involved in bankruptcy proceedings.

MODERATES APPROVE ELECTION PLATFORM.
A conference of Moderate party candidates for the March parliamentary elections approved their election platform in Tallinn on 18 January, BNS reported. Its first and foremost pledge is to ensure speedy, sustainable economic growth, particularly taking into account the interests of employees. It also includes support for a package of employment measures titled "Working Estonia," which is being discussed in the parliament. The party also favors the introduction of an income-tax rate of 33 percent for incomes greater than 300,000 kroons ($20,400) per year instead of the current uniform rate of 26 percent. The platform also calls for gradually raising the income-tax exemption to the level of the minimum wage. It also contains a pledge to pay a parent who stays at home after the birth of a child a tax-exempt annual salary of 50,000 kroons ($3,400). While avoiding any pre-election coalitions, the party conference expressed its willingness to form a postelection alliance with any parties that share its views on labor policy and the demographic situation. Party Chairman Ivari Padar said the People's Union, Pro Patria Union, and Res Publica are considered the Moderates' most likely allies.

* Foreign Minister Kristiina Ojuland and Japanese Ambassador to Estonia Norimasa Hasegawa signed an agreement on 22 January for a Japanese state cultural grant of 46.3 million yen ($400,000) to the Heino Eller Music School in Tartu, ETA reported. The funds would be used to purchase various wind and percussion musical instruments as well as pianos, including a concert grand piano.

* A meeting of the Russian Citizens Union of Narva decided to hold rallies in front of the U.S. and British embassies in Tallinn to protest the preparations of military operations against Iraq, BNS reported on 23 January. Union chairman Yuri Mishin signed an appeal calling on political and public organizations to join the protest actions outside the embassies at a still to be determined date.

* The Coalition Council of the Center and Reform parties on 20 January decided that both parties favor signing a national accord but would like to postpone it until after the parliamentary elections in March, BNS reported. It noted that there were matters such as the tax system in which there are different views so that it would be best not to let them become campaign issues and spoil a good thing by emphasizing the differences between the two opposition parties and the ruling coalition.

* The opposition Pro Patria Union asked Prime Minister Kallas to fire Interior Minister Ain Seppik as he was responsible for corruption among police officials, BNS reported on 20 January. The Pro Patria faction also blamed the ministry for losing almost 16 million kroons ($1.1 million) intended for the development of different regions due to its negligence, inadequacy, and carelessness as well as failing to draw up correct electoral lists of Estonian expatriates.

* The upcoming parliamentary elections on 2 March are expected to cost about 75 million kroons ($5.2 million), 24.6 million kroons paid by taxpayers and the rest spent by the competing political parties, ETA reported on 22 January. The National Election Commission budget is 21.2 million kroons supplemented by expenses of 3.5 million kroons by the Interior Ministry. Most parties intend to spend amounts similar to those spent in the October local elections when the Center Party spent 12.2 million kroons, Res Publica about 11.76 million kroons, the Reform Party 8.75 million kroons, the Moderates some 5 to 6 million kroons, and the Pro Patria Union 5.6 million kroons. The People's Union plans to increase its spending from 2.8 million kroons to 5 million kroons.

* Center Party deputy Tonu Kauba filed on 22 January a bill to increase the base amount of pensions by 100 kroons ($6.94) to 544.44 kroons on 1 March, BNS reported. The party had wanted earlier to increase pensions from 1 February, but failed to get the support of its coalition partner, the Reform Party, and its chairman, Kallas. The cabinet meeting on 21 January discussed the pension hike, but postponed a decision on whether to send it to the parliament for approval.

* A ship transporting 13 used railway locomotives from the United States for Estonian Railways was rerouted due to the ice situation in the port of Tallinn and arrived at the Latvian port of Ventspils on 22 January. The locomotives were unloaded the following evening. The question remains how to ship them to Estonia because of their heavy weight. It is unclear if they will be allowed to ride the Latvian rail lines or be placed on special platforms and transported to Estonia, BNS reported on 24 January.

* The Tallinn city government asked the Tallinn City Council on 23 January to hand over a chapel and a church in northern Tallinn to the Estonian Orthodox Church of the Moscow Patriarchate to use for 36 years, BNS reported. The congregations must assume maintenance and management of the buildings, insure them for 400,000 kroons ($27,800) and 500,000 kroons, respectively, and are not permitted to hand the buildings over to third parties.

APPEAL TO WTO OVER RUSSIA'S OIL POLICIES WEIGHED.
Foreign Ministry spokesman Rets Plesums said on 21 January that Latvia is considering lodging a complaint with the World Trade Organization (WTO) over a decision by Russian state-owned oil exporter Transneft not to ship any oil to the port of Ventspils in the first quarter of 2003, AFP reported. On 17 January, Foreign Minister Sandra Kalniete sent a letter to the European commissioner for external relations, Chris Patten, expressing concern that Russia might wield undue political influence through its decisions on the transit of oil through Latvia's ports. "In our view it is incompatible with Russia's aspirations to become a member of WTO," Kalniete wrote, reaffirming Latvia's wish to resolve issues jointly with the EU and become actively involved in the EU-Russia energy dialogue.

GOVERNMENT BACKS MEDICS' PARTICIPATION IN OPERATION IN AFGHANISTAN.
During an extraordinary session on 20 January, the cabinet approved a proposal to send eight Latvians to Afghanistan as part of a Dutch military contingent, LETA reported. The contingent is part of the UN's International Security Assistance Force (ISAF). Latvia is ready to send two volunteer teams -- including one physician, two paramedics, and a driver -- for a term of six months at an estimated cost of 260,000 lats ($450.000), which would be covered from the Defense Ministry budget. The decision still requires parliamentary approval. This would be Latvia's first direct support for peacekeeping operations in Afghanistan. An Estonian mine-detection unit has just had its tour of duty extended, while Lithuania contributed a 4-doctor medical team over the last year and in November 2002 sent a 40-member special forces team to Afghanistan.

PEOPLE'S PARTY DEMANDS DISMISSAL OF HEALTH MINISTER.
The opposition liberal-right People's Party on 23 January demanded the dismissal of Health Minister Aris Auders for allegedly receiving double payment for surgery he performed in the fall of 2002, LETA reported. Prime Minister Einars Repse requested a written explanation from Auders, adding that he thinks the claims are "exaggerated" and linked to the minister's recent probes at a number of hospitals. Both officials believe the case should be looked into by the Office for Prevention and Abatement of Corruption. Repse expressed greater concern about the recent purchase without a tender of a Volvo S80 automobile for Auders's use by the State Obligatory Health Insurance Agency. Political observers in Latvia speculate that the scandal may be used to call a vote of no confidence in the government.

* The cabinet decided at an extraordinary meeting on 20 January not to appeal the decision of the Copenhagen Maritime Affairs and Commercial Court earlier in the month and to pay more than $4 million compensation to Sweden's SwemBalt company for dismantling the ship "Feederchif" in Riga in 1996, LETA reported. A criminal trial for negligence has been started in Riga against four former Riga officials.

* Defense Minister Girts Valdis Kristovskis attended the Annual Conference of Defense and Society in Salen, Sweden from 19-22 January, LETA reported. He gave a report about Latvia's security policy after its accession into NATO. Other speakers included Swedish and Finnish Defense Ministers Leni Bjorklund and Jan-Erik Enestam, as well as Russia's permanent ambassador to NATO, Sergei Kislak. Kristovskis also held unofficial talks with Swedish parliament Chairman Bjorn von Sydow and Bjorklund's adviser, General Karlis Neretnieks.

* Defense Ministry State Secretary Edgars Rinkevics, National Armed Forces Deputy Commander Admiral Gaidis Zeibots, and Frank Boland, the head of the Force Planning Section of NATO's Defense Planning and Operations Division, discussed in Brussels on 21 January the draft reform plan for Latvia's participation in NATO, BNS reported. Latvia's plan, along with those of the other six countries invited in November to join NATO, is expected to be discussed in a meeting of ambassadors from NATO counties in Brussels on 4 February.

* Agnija Strausa, the press and information officer at the Armed Forces Headquarters, told LETA on 23 January that the Latvian unit, which carried out the peacekeeping mission in Bosnia-Herzegovina, was transferred to Kosova on 12 January. Baltic Squadron BALTSQN-6 began its peacekeeping mission in Kosova on 20 January. The unit is scheduled to return to Latvia at the end of February and be replaced by Estonian soldiers.

* According to the daily "Diena" of 22 January, Deputy Prime Minister Ainars Slesers doubts that Latvia will be able to implement the planned reform of changing the language of instruction in Russian schools to Latvian by 2004, BNS reported. Social Integration Minister Nils Muiznieks said that he supports the planned changes, but noted that some schools which would not be ready for the change could undergo an "individual approach" with individual transition periods and "flexibility in the process." This year Latvia has 166 schools teaching in the Russian language, 124 schools teaching in both Russian or Latvian, and more than 700 schools teaching only in Latvian.

* National Harmony Party (TSP) Chairman Janis Jurkans told reporters on 23 January that the congress of the coalition called For Human Rights in a United Latvia (PCTVL) on 15 February should result in the liquidation of the party and its replacement by a new Social Democratic party, LETA reported. If the new party is not formed, the TSP would still leave the PCTVL. The next day TSP board member and Riga City Council Deputy Chairman Sergejs Dolgopolovs said that Jurkans does not have the authority to declare the party's stance on issues such as withdrawing from the coalition that are the prerogative of a party congress.

* The cabinet followed the recommendation of Interior Minister Maris Gulbis and approved State Police Criminal Police Chief Janis Zascirinskis as the new state police chief on 21 January, LETA reported. Zascirinskis said that he was not planning any major reforms in the police system, but noted that increasing the salaries of police officers would increase competitiveness in the profession and maybe help attract experienced and better-educated employees.

* Defense Ministry spokesman Airis Rikveilis announced on 22 January that National Armed Forces (NAF) commander Raimonds Graube will be appointed the ministry's NATO integration executive-secretary after completing his term as NAF commander on 1 February, BNS reported. The executive secretary post has been vacant since last spring when its holder, Admiral Gaidis Zeibots, became deputy army commander.

* The cabinet approved nine members of the Latvian Privatization Agency council on 21 January, LETA reported. The council, which has suffered from charges of conflict of interest throughout the past decade, will have 10 members: four proposed by Prime Minister Repse and one each by the parliament's six political parties. Economy Minister Juris Lujans of Latvia's First Party will head the council. For the Fatherland and Freedom/LNNK had not yet selected its nominee.

* Eighteen women parliament deputies from both the ruling coalition and opposition met on 23 January and formed a women's parliamentary group for the first time in the history of the Latvian parliament, BNS reported the next day. Inara Ostrovska from the New Time party was elected as the group's head unanimously with former Justice Minister Ingrida Labucka from Latvia's First Party as her deputy. Parliament Chairwoman Ingrida Udre from the Union of Greens and Farmers and two women deputies from the People's Party did not attend the meeting.

LAND SALES TO FOREIGNERS APPROVED.
By a vote of 116 to four with four abstentions, parliament on 23 January amended Article 47 of the constitution to grant foreign legal entities and natural persons the right to acquire agricultural land in Lithuania, BNS reported. The law will come into force in a month, but the land sales will effectively become possible only in 2011 -- seven years after Lithuania officially joins the EU -- since the country negotiated a transition period in its membership negotiations. The land-sale amendment to the constitution was first approved last year (see "RFE/RL Newsline," 8 March 2002), but the required second approval by a two-thirds majority following an interval of at least three months was postponed while the transition period was being negotiated with Brussels.

CENTRAL BANKER SAYS EURO COULD REPLACE LITAS IN 2006.
After a meeting with parliamentary Chairman Arturas Paulauskas, Bank of Lithuania Chairman Reinoldijus Sarkinas told a press conference in Vilnius on 20 January that he sees no obstacle to Lithuania's adoption of the euro in 2006 or January 2007 at the latest, BNS reported. Sarkinas previously mentioned 2007 or 2008 as possible dates for introducing the euro, but after the Estonian and Latvian prime ministers stated that their countries expect to join the European Exchange Rate Mechanism (ERM II) in 2004 and enter the euro zone in 2006, he revised his position. Sarkinas said Lithuania should be able to meet the ERM II criteria that the national budget deficit and state debt be less than 3 percent and 60 percent of GDP, respectively, and that annual inflation not exceed average inflation among the three lowest EU states plus 1.5 percentage points. Lithuania's expected budget deficit for 2003 is 2.4 percent of GDP, the state debt in November 2002 was 26.4 percent of GDP, and there was a 1.0 percent deflation in 2002 -- although the consumer price index was significantly reduced by a repegging of the currency, the litas.

ARMY TO BE DOWNSIZED.
Defense Minister Linas Linkevicius told parliament on 21 January that Lithuania's entry to NATO will result in considerable changes within the country's armed forces, BNS reported the following day. He said an earlier idea that the armed forces should be prepared only to defend Lithuanian territory must be amended because, after joining the alliance, NATO will contribute to defending Lithuania. Linkevicius noted that NATO expects Lithuania to create smaller but more efficient and mobile units, resulting in an increase of professional soldiers and a reduction in the number of conscripts and active reservists. The size of the armed forces will be reduced from the current 14,000 to 13,000 and the active reserves from 20,000 to 6,000 by 2008. The functions of the National Defense Volunteer Forces will change significantly, as their major functions will be supporting allied reinforcement units, the protection and defense of strategic sites, and support for civil authorities.

LITHUANIA ANNOUNCES KALININGRAD TRAVEL CONCESSION...
Foreign Ministry Secretary Darius Jurgelevicius on 23 January announced a list of documents required of Russian citizens for transit to and from Kaliningrad Oblast that includes an apparent concession but does not recognize a military identification card as a legitimate travel document, as Moscow has urged, BNS and ITAR-TASS reported. Jurgelevicius was speaking after consultations with Russian Deputy Foreign Minister Sergei Razov aimed at hammering out details of the new travel policies, which will take effect on 1 February. Jurgelevicius said Lithuania decided not to accept a Russian request to include military IDs because they are not mentioned in the agreement signed between the EU and Russia in November (see "RFE/RL Newsline," 12 November 2002).

...REGARDING CHILDREN'S BIRTH CERTIFICATES.
Vilnius's primary compromise concerns travel for children: Lithuania will regard children's birth certificates as valid travel documents if they are traveling with their parents, provided there is an entry about the child in the parents' passport, BNS reported on 23 January. Jurgelevicius said that, from February, Russian citizens will only be able to enter Lithuania if they can show one of the following documents: a Russian diplomatic, service, or international passport; an international passport with Soviet seal and a stamp denoting Russian citizenship; a Russian internal passport; an internal passport with Soviet seal and a stamp denoting Russian citizenship; or a maritime passport and special return permit, which is issued to soldiers and sailors as well as to citizens who lose their documents abroad. Jurgelevicius also rejected the Russian demand that Lithuania not stamp internal passports because Russian law does not recognize the validity of internal passports that have been tampered with. He called that issue "a problem of Russian internal laws."

PREMIER WANTS TO LOWER THE BAR IN EU REFERENDUM.
Algirdas Brazauskas told a national radio audience on 21 January that getting a valid "yes" vote in a referendum on EU membership will be more demanding in Lithuania than in neighboring countries, BNS reported. Lithuania's referendum law requires that at least half of all eligible voters participate and that at least one-third of all voters, or about 900,000 people, cast "yes" ballots. Parliament Deputy Chairman Vytenis Andriukaitis proposed that the referendum be held over two days, rather than one, to allow more people to vote. Central Electoral Committee Chairman Zenonas Vaigauskas questioned whether the extra day would really increase participation, adding that it would require amending the law on referendums.

* Interior Minister Juozas Bernatonis and his Latvian counterpart Maris Gulbis said in Vilnius on 24 January that the close cooperation between their ministries should continue, ELTA reported. Noting that 3.5 million people and 1.2 million vehicles cross the Lithuanian-Latvian border each year, they agreed that the procedure for checking documents at border crossings should be simplified and accelerated. The ministers also discussed streamlining coordination between police forces in fighting organized crime. Before the meeting, Gulbis visited the Salociai border checkpoint and the Lithuanian Migration Department.

* The State Security Department (VSD) issued a press release on 21 January announcing that law enforcement officials had arrested members and leaders of an international criminal group linked with terrorist organizations, BNS reported. The group was involved in large-scale smuggling and contributed to the financing of international terrorist organizations, money laundering, corruption, and other serious crimes. VSD Director Mecys Laurinkus did not reveal the terrorist organizations or the countries to which the detained group was linked, saying that international practice banned this.

* The delegation headed by Foreign Ministry Secretary Giedrius Cekuolis successfully completed the second round of NATO membership negotiations in Brussels on 23 January, ELTA reported. NATO Deputy Secretary-General Guenter Altenburg led the NATO delegation. Lithuania confirmed its commitment to allocate sufficient funds to defense needs, make contributions to NATO's civil and military budget, implement a security investment program, and take part in the activities of the alliance agencies as well as observe the measures indicated by NATO's security bureau, security policy requirements, and undertake all means to ensure adequate protection of restricted information.

* Deputy Transportation Minister Valerijus Ponomariovas told BNS on 21 January that Russia is requesting permission to transport 1,200 tons of toxic rocket fuel from the Kaliningrad Oblast via Lithuania to plants in Russia. Russia wants to be allowed to ship the rocket fuel three times and if this were allowed the next earliest shipment of rocket fuel would be in 30 years. Ponomariovas is heading a delegation to Kaliningrad to get more information about the stored fuel and has presented a list of questions on Russia's readiness to cover the damages in case of fuel spilling during the transit through Lithuania.

* Three representatives of the Lithuanian army headed by Major Liutauras Kavaliunas and a Danish inspector carried out an inspection of the Russian Baltic Fleet in the Kaliningrad Oblast from 20 to 22 January, BNS reported. The aim of the inspection, in compliance with an OSCE document signed in Vienna in 1999, is to check if the country is involved in "unsanctioned military activity." The four inspectors checked the land forces; a marine guard brigade, a military engineers unit, and a military aviation unit and found no violations.

* Fulfilling a request by the government, President Valdas Adamkus on 21 January signed and sent to the parliament for ratification the Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and on their Destruction, BNS reported. Lithuanian Ambassador to the UN Oskaras Jusys had signed the convention in 1999. Some 145 countries have signed and 129 have ratified the convention to date.

* During a visit to Vilnius on 23 and 24 January, American Jewish Committee European Affairs Director Rabbi Andrew Baker held talks with President Valdas Adamkus, President-elect Rolandas Paksas, Prime Minister Algirdas Brazauskas, Justice Minister Vytautas Markevicius, Vilnius Mayor Arturas Zuokas, and other officials, ELTA reported. Baker praised the progress being made in returning property to the Jewish community and the plans to restore parts of the former Jewish quarter in Vilnius.

* A draft constitutional amendment supported by 50 lawmakers was registered at the parliament's secretariat on 24 January, BNS reported. The amendment proposed by Christian Democrat Petras Grazulis would prohibit members of the parliament from serving as ministers.

* The Constitutional Court ruled on 24 January that the procedure, established two years ago by the parliament, of appointing the country's prosecutor general violates the country's constitution, ELTA reported. Former Prosecutor-General Kazys Pednycia had filed a case with the Vilnius Area Administrative Court arguing that his dismissal was not legitimate and demanding compensation. The court ruled in his favor.