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. Last Updated: 07/27/2016

Latvia Slams Russia on 'Offshore' Status

RIGA, Latvia -- Russia's Central Bank, which recently listed Latvia as an offshore banking zone, was condemned by Riga on Tuesday for the move, and the country said it may file a complaint with international institutions such as the World Trade Organization.

"This unfortunately is [a matter of] Russian Central Bank policy that is aimed at making Latvian and Russian cooperation more difficult. ... It is unacceptable," Latvian Foreign Minister Valdis Birkavs said on state radio.

The Central Bank earlier this year included Latvia on a list of offshore zones, making it necessary for local bankers to fill out reports of foreign currency transactions involving Russian goods or services within 10 days of their execution.

Besides creating more paperwork for businesses, Latvian officials are concerned the move will also slow down the flow of goods and services between the two countries and could discourage some firms from doing business entirely.

Russia is one of Latvia's largest trading partners, accounting for between 20 and 30 percent of the Baltic nation's trade.

"Latvian Central Bank analysis shows that not a single Latvian law paragraph or legal norm can serve as a basis for such a conclusion by the Russian Central Bank," Birkavs said.

He said Latvia has given orders to its ambassador in Moscow to appeal to the Russian Foreign Ministry.

"We should not get hysterical about it. Undoubtedly, we will inform relevant international economic and financial institutions about that," Birkavs said.

In February, Latvia became a full member of the WTO, and only the second former Soviet republic to gain such status behind Kyrgyzstan. Russia has been negotiating for similar status for the past four years.