Raivis Kronbergs has stepped down today as Director of Latvia’s State Chancellery by mutual agreement with outgoing Prime Minister Evika Siliņa, four days after the Corruption Prevention and Combating Bureau (KNAB) detained him in the so-called “timber industry case.” That is according to Latvia’s Public Broadcaster, which reported Deputy Director for Legal Affairs Inese Gailīte will perform the duties until a new head is appointed.
The criminal investigation centres on a late-2023 Cabinet decision that instructed state forester Latvijas Valsts Meži (LVM) to apply significantly lower weighted-average prices to long-term softwood sawlog contracts from 1 January 2024, rather than the higher prices companies had bid in the original auctions. The Office of the Prosecutor General is examining possible abuse of office and alleged negligence in the unlawful provision of state support, following the price cut, which has cost LVM more than €30 million.
KNAB detained Kronbergs and Agriculture Minister Armands Krauze of the Union of Greens and Farmers (ZZS) on Thursday, 14 May, for procedural actions, conducting searches at the homes and workplaces of both men before releasing them the same evening. The detentions came hours before Siliņa announced her resignation as Prime Minister and dismissed Krauze from the cabinet.
Siliņa told a media briefing she could not “tolerate any shadow of suspicion over ministers” in announcing the dismissal ahead of her own departure, with the resignation collapsing the New Unity-led coalition four months out from October’s elections. President Edgars Rinkevics has held consultations with parliamentary factions at Rīga Castle since 15 May to chart the path to a successor government.
Wood Central understands the report behind the price cut was prepared by Krauze and the then-Agriculture Ministry state secretary Kronbergs, who at the time also held the post of state representative on LVM’s shareholder register. The decision cut LVM’s quarterly profit by €7.54 million from the start of 2024.
LVM’s board had warned the changes would represent wasteful use of state resources and could constitute unlawful state aid under EU competition rules, according to a written response signed by board members ahead of the Cabinet vote. TV3 investigative programme Nekā personīga later reported an additional €12 million in contract discounts arranged for Uldis Mierkalns’s PATA group through the Agriculture Ministry.
An internal Agriculture Ministry investigation concluded the financial situation of the timber companies that received the contract reductions was not systematically or structurally unstable through 2023, despite the ministry report justifying the price cut on competitiveness grounds. The Prosecutor General’s Office, the State Audit Office, and the Competition Council are now conducting parallel assessments of whether the price reductions were lawful.
It comes as Latvia’s wood processing sector — the country’s largest industrial sector, with forests covering 53 per cent of the national territory and forest product exports worth €3.3 billion in 2023 — faces scrutiny on supply-chain integrity grounds beyond the Kronbergs and Krauze proceedings. The Baltic state is among the countries named in Source Certain’s wood-DNA traceability work that exposed Russian timber being sold into UK supply chains under Estonian, Latvian and Lithuanian labels.
Wood Central understands that Kronberg assumed the State Chancellery directorship on 12 August 2024, following Cabinet approval on 23 July, succeeding the post he had previously occupied as Agriculture Ministry state secretary during the period in which the disputed LVM price cut was prepared. The Prosecutor General’s Office has confirmed the timber industry case is continuing in cooperation with the State Audit Office.
Latvia’s wood and forest product exports were worth €3.3 billion in 2023, down 22 per cent on 2022 but still the country’s largest single export category, accounting for 17.3 per cent of total export value, according to the Investment and Development Agency of Latvia.
