Regulations Regarding Disciplinary Matters of Administrators of Insolvency Proceedings and Persons Supervising Legal Protection Proceedings

Issued pursuant to
Section 31.¹, Paragraph three, Section 31.⁴,
Paragraph six, and Section 31.⁶,
Paragraph two of the Insolvency Law

I. General Provisions

1. This Regulation prescribes:

1.1. the procedures for initiating a disciplinary matter against an administrator of insolvency proceedings (hereinafter - the administrator) and the person supervising legal protection proceedings (hereinafter - the supervising person);

1.2. the procedures for the operation of the Disciplinary Matters Commission (hereinafter - the Commission);

1.3. the procedures for the hearing of a disciplinary matter;

1.4. the procedures by which the Commission shall take a decision.

2. Circulation of information and documents related to the initiation and examination of a disciplinary matter between the Insolvency Administration, the Commission, the administrator or the supervising person and other invited persons shall take place electronically in accordance with the laws and regulations regarding drawing up of electronic documents.

3. Materials of a disciplinary matter shall be registered and stored by the Insolvency Administration.

II. Initiation of a Disciplinary Matter

4. Prior to initiating a disciplinary matter the director of the Insolvency Administration shall request written explanations from the administrator or the supervising person, concurrently informing the administrator or the supervising person regarding the circumstances serving as the basis for the potential initiation of the disciplinary matter.

5. The administrator or the supervising person shall provide written explanations within 10 working days after receipt of the request referred to in Paragraph 4 of this Regulation. Failure to provide explanations shall not preclude the initiation of a disciplinary matter.

6. The director of the Insolvency Administration shall take a decision to initiate a disciplinary matter against the administrator or the supervising person or to refuse to initiate a disciplinary matter within 15 working days after receipt of explanations or after the end of the period for the provision of explanations.

7. The following shall be indicated in the decision to initiate a disciplinary matter or to refuse to initiate a disciplinary matter:

7.1. the given name, surname and office licence number (for the administrator) or personal identity number (for the supervising person) of the administrator or the supervising person (if the person has no personal identity number - the date of birth, number of a personal identification document, its date of issue, country and institution which issued the document);

7.2. the justification for the initiation of the disciplinary matter against the administrator or the supervising person or to refuse to initiate the disciplinary matter;

7.3. the violated legal norm or the norm of the code of conduct not conformed to which is the basis for the initiation of the disciplinary matter;

7.4. the circumstances and nature of the potential disciplinary offence (consequences of infringement, affected persons (if any), estimation of damages (if any), affected interests).

8. The following shall be appended to the decision to initiate a disciplinary matter or to refuse to initiate a disciplinary matter:

8.1. documents justifying the circumstances referred to in the decision;

8.2. written explanations of the administrator or the supervising person;

8.3. materials on the administrator or the supervising person available to the Insolvency Administration, if any (information regarding the previous activity of the administrator or the supervising person, complaints submitted regarding the administrator or the supervising person, decisions taken by the Insolvency Administration in relation to the administrator or the supervising person and their validity).

9. The Insolvency Administration shall forward the decision to initiate a disciplinary matter to the administrator or the supervising person against whom the disciplinary matter is initiated not later than within the following working day after taking of the decision, concurrently explaining the right of the person concerned to submit requests to the Commission.

10. The director of the Insolvency Administration shall forward the decision to initiate a disciplinary matter together with the materials of the disciplinary matter to the Commission for examination not later than within the following working day after taking of the decision.

III. Procedures for the Operation of the Commission

11. The Commission meetings shall be convened and the work of Commission shall be managed by the chairperson of the Commission.

12. The work of the Commission shall be provided and organised by the secretary of the Commission who shall be appointed by an order of the director of the Insolvency Administration. The secretary of the Commission shall not be a member of the Commission.

13. Meetings of the Commission shall be recorded in minutes. The minutes shall be signed by the chairperson of the Commission and the secretary of the Commission.

14. The Commission meetings are closed.

15. A quorum of the Commission shall be not less than three members of the Commission present at a meeting.

16. The Commission shall take a decision, acting by a simple majority. If the number of votes is divided equally, the chairperson of the Commission shall have the casting vote.

17. A member of the Commission may not abstain from voting (except the case referred to in Paragraph 18 of this Regulation).

18. A member of the Commission shall notify the Commission and not participate in further examination of the disciplinary matter, if his or her participation in the examination of the relevant disciplinary matter causes a conflict of interest within the meaning of the Law on Prevention of Conflict of Interest in Activities of Public Officials.

19. If a member of the Commission does not agree with the decision of the Commission, he or she is entitled to request that his or her separate opinion is recorded in the minutes.

20. The code of conduct of administrators and supervising persons (hereinafter - the Code of Conduct) and its amendments shall be approved in a meeting of the Commission. Before the meeting of the Commission, the chairperson of the Commission shall forward the draft of the Code of Conduct or its amendments and determine the term for the submission of proposals and objections.

21. The Commission may issue by-laws of the Commission determining therein the procedures for convening and conducting meetings, the procedures for drawing up and harmonisation of the minutes of the Commission, as well as other organisational matters of the work of the Commission. The by-laws of the Commission shall be approved in a Commission meeting, and they shall be signed by the chairperson of the Commission.

22. Upon proposal of a member of the Commission, the Commission shall examine proposals regarding amendments to the Code of Conduct and the by-laws of the Commission. The members of the Commission shall submit their proposals to the chairperson of the Commission who shall convene a Commission meeting to examine the proposals.

23. The decision on availability of the materials of the disciplinary matter (including the decision taken during the disciplinary matter) shall be taken by the chairperson of the Commission.

IV. Examination of a Disciplinary Matter

24. A disciplinary matter shall be heard in a Commission meeting. The administrator or the supervising person against whom a disciplinary matter is initiated, as well as the persons referred to in Section 31.⁵, Clause 1 of the Insolvency Law are entitled to participate in a Commission meeting. The failure of the administrator or the supervising person to participate in a Commission meeting does not preclude the examination of the disciplinary matter.

25. If, during the examination of a disciplinary matter, the Insolvency Administration has obtained information regarding the administrator or the supervising person against whom the disciplinary matter is initiated, the Insolvency Administration shall notify the Commission without delay. The Commission shall evaluate whether the information submitted by the Insolvency Administration should be added to the materials of the disciplinary matter.

26. Upon request of the Commission, the administrator or the supervising person shall provide explanations to the Commission within five working days after receipt of the request for explanations. Failure to provide explanations does not preclude the examination of the disciplinary matter.

27. The date and time of the Commission meeting shall be notified to the administrator or the supervising person against whom the disciplinary matter is initiated, as well as the persons referred to in Section 31.⁵, Clause 1 of the Insolvency Law not later than three working days prior to the meeting.

28. The examination of the disciplinary matter at a Commission meeting shall be opened with the report of the chairperson of the Commission. Afterwards, the Commission shall hear the requests and explanations provided by the administrator or the supervising person against whom the disciplinary matter is initiated, as well as those provided by other persons invited to the meeting, and it shall examine the materials of the matter and other documents.

29. The administrator and the supervising person against whom the disciplinary matter is initiated, as well as other persons invited to the meeting shall leave the meeting room upon request of the chairperson of the Commission.

30. The Commission shall conclude the examination of the disciplinary matter by taking a decision.

31. If the Commission finds that the examination of the disciplinary matter does not fall within its competence, the Commission shall refer the materials in its possession to the competent authority and take a decision to close the disciplinary matter.

32. The following shall be indicated in the decision of the Commission:

32.1. the date of the Commission meeting when the disciplinary matter was examined on its merits;

32.2. the given name, surname and office licence number (for the administrator) or personal identity number (for the supervising person) of the administrator or the supervising person (if the person has no personal identity number - the date of birth, number of a personal identification document, its date of issue, country and institution which issued the document);

32.3. the circumstances identified in the decision to initiate a disciplinary matter;

32.4. the facts identified by the Commission and materials in which they are recorded;

32.5. legal analysis of the facts identified by the Commission;

32.6. assessment of explanations of the administrator or the supervising person (including explanations provided during the Commission meeting) and arguments rebutting or justifying the abovementioned explanations;

32.7. conclusions as to whether a disciplinary offence has been committed, specifying the legal norms and circumstances which justify the conclusion drawn;

32.8. the decision taken by the Commission;

32.9. the procedures for appeal of the decision.

33. If the Commission has imposed a disciplinary sanction on the administrator or the supervising person referred to in Section 31.⁷, Paragraph one, Clause 1 or 2 of the Insolvency Law by imposing a fine, the decision of the Commission shall notify the administrator or the supervising person of his or her right to request a delay of payment of the fine until a set period, or payment by instalments.

34. The decision of the Commission shall be signed by the chairperson of the Commission.

35. The Commission shall notify the Insolvency Administration of the decision taken not later than on the following working day after the decision has been signed.

36. If the Commission has taken the decision referred to in Section 31.⁶, Paragraph one, Clause 1, 5 or 6 of the Insolvency Law, it shall notify the administrator or the supervising person of the decision taken within one working day after the decision has been signed.

37. The administrator or the supervising person shall address the request referred to in Section 31.⁷, Paragraph six of the Insolvency Law to the Commission and submit it to the Insolvency Administration. The Insolvency Administration shall forward the application to the Commission within one working day. The Commission shall examine the request of the administrator or the supervising person within two weeks after its receipt.

V. Closing Provision

38. Until appointment of the administrator in accordance with Section 13.¹ of the Insolvency Law, the certificate number of the administrator shall be indicated in the decision to initiate a disciplinary matter or to refuse to initiate a disciplinary matter, as well as in the decision of the Commission.

Prime Minister Māris Kučinskis

Acting for the Minister for Justice -
Minister for Environmental Protection
and Regional Development Kaspars Gerhards

Translation © 2017 Valsts valodas centrs (State Language Centre)