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Under Action 14, countries have committed to implement a minimum standard to strengthen the effectiveness and efficiency of the mutual agreement procedure (MAP). The MAP is included in Article 25 of the OECD Model Tax Convention and commits countries to endeavour to resolve disputes related to the interpretation and application of tax treaties. The Action 14 Minimum Standard has been translated into specific terms of reference and a methodology for the peer review and monitoring process. The minimum standard is complemented by a set of best practices. The peer review process is conducted in two stages. Stage 1 assesses countries against the terms of reference of the minimum standard according to an agreed schedule of review. Stage 2 focuses on monitoring the follow-up of any recommendations resulting from jurisdictions' stage 1 peer review report. This report reflects the outcome of the stage 2 peer monitoring of the implementation of the Action 14 Minimum Standard by Latvia, which is accompanied by a document addressing the implementation of best practices.

Regulators act as 'market referees', balancing often competing interests of stakeholders in the sector, including governments, current and future actors in the markets, and consumers. At the same time, markets are changing at an unprecedented pace due to new technologies, the international drive toward carbon-neutral economies, shifts in consumer needs and preferences, and, most recently, the profound changes brought by the coronavirus pandemic. Assessing the performance of economic regulators must therefore be a continuous process. This progress review evaluates the changes put in place by Latvia’s Public Utilities Commission since the previous OECD performance assessment review in 2016, in the interest of increasing the effectiveness of its regulatory activities and improving final outcomes for consumers and the economy.

The Impact of Regulation on International Investment in Finland examines what drives FDI into Finland and which domestic regulatory aspects may discourage foreign investment. The report analyses trends in FDI flows towards Finland and other Nordic-Baltic countries and discusses the benefits of foreign investment for the Finnish economy. It provides a comparative overview of the regulatory frameworks in force in Finland and its Nordic-Baltic peers, outlining both economy-wide and sector-specific findings, and explores how changes in these regulatory frameworks are linked to changes in FDI inflows in the region. Foreign investors’ views on Finland’s business environment complement these findings. The report underlines potential areas for reform and suggests policy actions that could further improve Finland’s investment climate and contribute to attracting and retaining more FDI, while also strengthening its positive impact.

Going Digital in Latvia analyses recent developments in Latvia’s digital economy, reviews policies related to digitalisation and make recommendations to increase policy coherence in this area, based on the OECD Going Digital Integrated Policy Framework. The review uses strategic foresight to explore three alternative future scenarios, which could result from the digital transformation of the global economy and society. It also examines the availability and quality of communication networks and services in Latvia as well as related policies and regulations. Further, it reviews trends in digital technology usage among individuals, businesses and the government, and examines policies to foster diffusion. Finally, the review analyses opportunities and challenges raised by digitalisation in key areas, from innovation and skills to digital security and data governance, and evaluates policy responses to these changes in Latvia.

Latvia has embarked on an ambitious agenda to tackle the challenges posed by complex types of criminality to public prosecution services, with particular emphasis on economic and financial crimes. This report carries out a benchmark analysis of Latvia’s prosecution practices along with those in ten OECD member countries, international good practices and the experience of globally renowned prosecution experts. It takes stock of the good practices implemented in the prosecution to date, and examines the importance of a broad range of policy aspects that can drive better performance. These include strategic management tools, the use of data and strengthening co-operation across the whole of the justice chain. Finally, it formulates policy recommendations to support Latvia in strengthening the performance of its prosecution services.

Latvia sees high rates of obesity, smoking and alcohol consumption. In turn, this results in a high incidence of preventable diseases, such as heart disease, diabetes and many cancers. This puts a burden on a health system which is already operating on a very tight budget as compared to other OECD countries. This OECD report shows that Latvia has many of the policies it needs to address these problems in place. However, Latvia needs to go further to ensure the health system can effectively prevent diseases, not just cure them. This will require redesigning policies to reach a larger population and efforts to educate the population to understand how to protect their health. Better screening programmes are needed, as is a stronger primary care sector, and access to essential medicines for all Latvians.

This country policy profile on education in Latvia is part of the Education Policy Outlook series. Building on the first policy profile for Latvia (2017), it offers a concise analysis of where the education system stands today in terms of strengths, challenges and ongoing policy efforts, and how this compares to other systems. The profile brings together over a decade’s worth of policy analysis by the Education Policy Outlook, as well as the latest OECD data, relevant thematic and country-specific work and other international and national evidence. It also offers analysis of the Latvian education system’s initial responses to the COVID-19 crisis and provides insight into approaches to building greater responsiveness and resilience for the future

The COVID-19 crisis has had a profound impact on SME access to finance. In particular, the sudden drop in revenues created acute liquidity shortages, threatening the survival of many viable businesses. The report documents an increase in demand for bank lending in the first half of 2020, and a steady supply of credit thanks to government interventions. On the other hand, other sources of finance declined, in particular early-stage equity. This paper, a special edition of Financing SMEs and Entrepreneurs, focuses on the impacts of COVID-19 on SME access to finance, along with government policy responses. It reveals that the pre-crisis financing environment was broadly favourable for SMEs and entrepreneurs, who benefited from low interest rates, loose credit standards and an increasingly diverse offer of financing instruments. It documents the unprecedented scope and scale of the policy responses undertaken by governments world-wide, and details their key characteristics, and outlines the principal issues and policy challenges for the next phases of the pandemic, such as the over-indebtedness of SMEs and the need to continue to foster a diverse range of financing instruments for SMEs.

In order to pave the path to future success, Latvia has developed its Education Development Guidelines 2021-2027, which identifies key policy initiatives that are critical for skills development. The Guidelines outline how Latvia will equip its citizens with skills to flourish in work and in society. Evidence on the strengths and weaknesses of Latvia’s education and skills systems has informed the prioritisation of relevant policies in the Guidelines. A wide range of Latvian actors across ministries, levels of government, education and training providers, employers, trade unions, the non-profit sector and learners have been involved in the development of the Guidelines, demonstrating their commitment to work together to implement these initiatives. Looking to the future, more can be done to position Latvia to successfully implement the policy priorities and reach the targets encompassed by the Guidelines. As the COVID-19 crisis has reminded us, the future is uncertain and therefore all plans must be designed to be responsive and adaptable to overcome future challenges and seize future opportunities. Building on the OECD Skills Strategy Assessment and Recommendations phase, the Implementation Guidance phase has supported Latvia in the development of the Education Development Guidelines 2021‑2027 by providing guidance on selecting policy actions, improving Latvia’s indicator system, and selecting performance indicators.