It is planned that in the future the Ministry of Justice will have to supervise insolvency administrators.
“The proposed amendments ensure the division of competences in the field of insolvency, strengthen the quality of supervision and at the same time reduce the administrative burden. This is an important step in improving insolvency processes, which will promote the efficiency of public administration,” Andrejs Judins (New Unity), the chairman of the Saeima Legal Committee responsible for the draft law, stated ahead of Thursday’s first reading of the parliamentary bill.
The Ministry of Justice will continue to ensure the supervision of insolvency administrators and persons supervising the legal protection process, the examination of administrative violation cases, as well as the appointment, removal and initiation of disciplinary cases of administrators.
The Court Administration, in turn, will take over the functions related to the Employees’ Claims Guarantee Fund, including the consideration of applications for the satisfaction of claims of employees of insolvent employers, the payment of deposits and the maintenance of the electronic insolvency accounting system. Meanwhile, disciplinary cases, similar to those in the professions of sworn advocates and bailiffs, will be provided by the industry association.
The amendments also provide for the improvement of the regulation of the examination and disciplinary liability of administrators. Similar to what happens in the professions of sworn advocates and bailiffs, these functions will be provided by the industry association. The amendments also provide for the harmonization of the norms with the judgment of the Constitutional Court, which clarifies the restrictions for candidates for the position of insolvency administrators.
The changes are intended to improve the efficiency of public administration and optimize the use of resources in the field of insolvency supervision – which has in the past been highly controversial and in some cases subject to abuse. It is planned that out of 55 full-time positions in the Insolvency Control Service, 16 will be eliminated, 22 will be transferred to the Ministry of Justice, and 17 – to the Court Administration.
To ensure the transition to the new procedure, it has been determined that the amendments to the law will enter into force on October 1 of this year.
In order for changes to come into force, they must be adopted by the Saeima in the second – final – reading and then promulgated by the President.
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