Hereby  JSC  "Latvijas  kuģniecība" (LASCO) informs that on December 5,

2003  LASCO  product  tanker  Zoja  II  was transferred to Latvian Ship

Register and will again fly Latvian flag.



Considering  regulations  on seafarers social security tax incorporated

in  Latvian  Maritime  Policy Concept adopted in April 2002, a decision

was  made  by JSC " Latvijas kuģniecība" to transfer one of its product

tankers  Zoja II to Latvian Ship Register, and the vessel will now sail

under  the Latvian flag. Due to unfavourable taxation policy in Latvia,

until  now  all LASCO Group's vessels were registered in countries with

the  legislation  more flexible for shipping companies, and were flying

"flags  of  convenience". To assess the economic aspects of reflagging,

tanker  Zoja  II  is so far the only LASCO vessel to enter Latvian Ship

Register.



A number of significant changes related to both employees and employers

are  expected  to  be made in the Latvian legislation. According to the

new  Maritime Policy, tonnage tax, which is not dependent on the profit

or loss of the company, will be payable by LASCO for each of its vessel

registered  with  Latvian  Ship  Register. Tax allowances for employees

will  encourage  seafarers  to pay income and social security tax, thus

enabling  themselves  to  use  all  the  benefits  of  social insurance

provided for in the Latvian legislation.



Subject  to positive reflagging experience also other LASCO vessels are

planned  to  be  transferred  to  Latvian Ship Register and fly Latvian

flag.



M/v Zoja II will be operated by LASCO subsidiary SIA Kuģu menedžments .