The third quarter of 2026 brought developments across criminal enforcement, legislation and case law. For businesses and public-sector bodies, the central message is twofold: enforcement scrutiny remains high, particularly in relation to public funds, financial crime and national security; at the same time, the Supreme Court continues to require a precise evidential basis before commercial disputes are treated as criminal matters.
Investigation and enforcement priorities
Public-sector integrity and economic crime remained prominent in the work of Latvia’s investigative authorities. Recent cases concern both the conduct of public officials and the involvement of private businesses in the use of public funds.
A case has been referred to court against an official of the Rēzekne City Municipality, who is alleged to have assumed long-term financial commitments exceeding EUR 8 million without a council decision and while in a conflict-of-interest situation. A separate case concerning the alleged misappropriation of state budget funds in educational institution price surveys has also been referred to court; proceedings for the application of coercive measures are being pursued against an advertising agency. In addition, KNAB, working with the European Public Prosecutor’s Office, is investigating suspected fraud in hospital procurements worth more than EUR 657,000, where technical specifications may have been tailored to a particular bidder. KNAB has also requested criminal prosecution of a ministry state secretary for the disclosure of restricted-access information.
Economic-crime enforcement continues to focus on organised fraud and smuggling. Cases referred to court include an alleged fraud scheme operated through a call centre located in Russia, in which callers impersonated police officers and bank employees, and a large-scale cigarette-smuggling case involving customs officials. The State Police is also continuing its investigation into an extensive illegal cigarette-production and smuggling operation. These developments underline that the illicit trade in excise goods, including potential official involvement, remains an enforcement priority.
National security is becoming a more visible part of the criminal-law landscape. Four espionage cases involving alleged activity in the interests of the Russian Federation have been referred to court. The State Security Service has detained a person suspected of financing the Russian armed forces and has requested prosecution for glorifying Russia’s aggression and promoting separatist ideas concerning Daugavpils on social media. The State Police has also referred a case to the prosecutor’s office concerning modified TV consoles that allegedly enabled access to television programmes prohibited in Latvia. The geopolitical environment is therefore continuing to shape enforcement priorities directly.
Legislative developments
Suspension from civil service at the suspect stage
The Cabinet of Ministers has supported and submitted to the Saeima amendments to the State Civil Service Law. The amendments would expand an institution head’s power to suspend a civil servant from performing official duties due to their procedural status in criminal proceedings. At present, suspension without pay on this ground is possible only once criminal prosecution has been initiated. Under the proposal, suspension could be considered once a person is designated as a suspect.
Suspension would not follow automatically from suspect status. The institution head would need to assess the nature of the official’s duties, the powers entrusted to that person, the potential risk to the public interest or the institution’s reputation, and the possibility of transferring the official to another position. The explanatory memorandum expressly describes suspension as a preventive measure, not a penalty imposed before guilt has been established.
Review of confiscation proceedings and the EU Anti Corruption Directive
In August, the Prosecutor General submitted third-reading proposals to the Saeima Legal Affairs Committee for amendments to the Criminal Procedure Law concerning the reopening of proceedings relating to criminally acquired property in light of newly discovered circumstances. The proposals would specify that a final acquittal in the criminal case from which materials were previously separated into proceedings concerning criminally acquired property may constitute such a circumstance.
The wider legislative context is also shaped by Directive (EU) 2026/1021 on combating corruption. The Directive harmonises minimum rules on the definition and sanctioning of corruption offences, including bribery in the public and private sectors, misappropriation, trading in influence and the proceeds of corruption. It also establishes requirements for the liability of legal persons, including where a lack of supervision or control by a person in a leading position enabled an offence to be committed by a subordinate. Member States must transpose most of the Directive’s requirements by 1 June 2028.
Criminal liability for bid rigging in public procurement
On 24 September 2026, the Saeima adopted final amendments to the Criminal Law introducing criminal liability for individuals involved in prohibited agreements in public procurement, commonly described as bid rigging. Until now, administrative liability could be imposed on legal persons. The amendments will also permit liability for the individuals who organise or implement prohibited arrangements in practice, for example by agreeing prices or coordinating bids.
Where a prohibited agreement concerns a large-scale procurement, the maximum penalty is three years’ imprisonment. Where it concerns a public procurement, the maximum is five years. A procurement is considered large-scale where the contract value, excluding VAT, is at least EUR 750,000, or at least EUR 1 million for construction works. An individual may be released from criminal liability if they are the first to voluntarily report the agreement and actively assist in its detection and investigation.
COBALT will discuss the practical implications of the new rules for companies and their employees at its client webinar, “Criminal liability for procurement cartels: what is changing for businesses and their employees”, on 8 October. The webinar will be led by Julija Jerčeva, Senior Specialist and Attorney-at-Law at COBALT.
Key case law
The boundary between criminal and civil law
Several Supreme Court rulings this quarter reaffirm that criminal law cannot replace the resolution of civil or commercial disputes. The Court drew this boundary particularly clearly in cases involving commercial transactions, delivery arrangements and the transfer of title.
SKK-19/2026: In a fraud case related to the delivery of a wind turbine and the receipt of public funding, the Court held that breach of contract alone is insufficient for fraud. The prosecution must establish specific deception, the victim’s resulting error, an act against the victim’s interests, pecuniary loss and causation. A commercial profit motive alone does not prove a mercenary motive or direct intent.
SKK-20/2026: In a cross-border commercial transaction involving the delivery of spare parts by a German company to a Latvian company, the Court distinguished misappropriation from a civil claim for unpaid purchase price. If the goods became the buyer’s property under the applicable law, non-payment does not automatically mean misappropriation of another person’s property. INCOTERMS governs delivery and the transfer of risk, but does not by itself determine the transfer of title.
SKK-56/2026: The Court held that the later inability to register a tractor, due to an attachment imposed in another criminal proceeding, did not in itself prove the pecuniary loss and mercenary intent required for fraud. Vehicle registration is not constitutive of title, and the buyer had received, owned and used the tractor.
Criminally acquired property and confiscation
SKK-51/2026: A specific predicate offence need not always be identified to establish autonomous money laundering, but the laundering acts and the criminal origin of the property must still be proven. Where an asset was acquired using both criminally derived and lawful funds, confiscation must be limited to the amount of the criminally derived funds, rather than automatically extending to the entire asset.
SKK-49/2026: Spending criminally derived funds is not, in itself, concealment or disguise. To qualify a purchase as money laundering, it must be established which characteristic of the funds was concealed or disguised and why the transaction was capable of achieving that result.
SKK-98/2026: Where criminally acquired property has been confiscated and the same offence caused pecuniary damage to the State as victim, that confiscation must be taken into account when determining the outstanding amount of compensation. To that extent, confiscation restores the victim’s financial position while serving the aims of confiscation and compensation.
Procedural limits and judicial control
SKK-363/2026: A breach of institutional jurisdiction does not automatically make evidence absolutely inadmissible. Such inadmissibility is to be interpreted narrowly and primarily concerns situations in which the person conducting the procedural act had no relevant legal status or statutory power at all.
SKA-680/2026: In administrative proceedings, the Court clarified that a police internal review is not an administrative act directed at producing final public-law consequences for an individual. A request to conduct a new internal review is therefore not subject to administrative court review.
SKK-316/2026: An appellate court may issue a conviction in written proceedings after an acquittal at first instance, provided that the accused has been informed of the written procedure, has had an opportunity to object, and an oral hearing is not necessary for an objective determination of the case.
SKK-166/2026: The value of the object of an offence cannot automatically be equated with the victim’s loss. To award compensation for lost profit, the court must establish that the goods would in fact have been sold and that the victim would have received the benefit. The Court also found that a specialist who is simultaneously the victim’s representative is not automatically disqualified; the court must assess whether the potential conflict affected the objectivity of the proceedings or the opinion itself.
Constitutional Court proceedings on compensation after the lifting of an attachment
During the third quarter, the Constitutional Court initiated two cases concerning the right to compensation after an attachment of property has been lifted: Case No. 2026-10-01, initiated following a constitutional complaint prepared by COBALT, and Case No. 2026-13-01. Both cases concern the rules in force until 31 May 2026, under which a legal person’s right to compensation for harm caused in criminal proceedings was linked to the conclusion of proceedings on the application of a coercive measure to a legal person.
The issue is whether the right to compensation may be deferred until the entire criminal process ends even where the specific attachment has already been lifted. It forms part of the broader debate of recent years on asset attachment, proceedings concerning criminally acquired property and the protection of affected property owners. Amendments in force from 1 June 2026 address the issue differently; the Constitutional Court will assess whether the earlier framework was compatible with the Constitution.
What this means in practice
The quarter shows two developments operating in parallel. Investigative activity is broadening, with closer attention to the use of public funds, national security and financial flows. At the same time, the Supreme Court continues to insist on a disciplined application of criminal-law concepts, especially where the underlying dispute arises from civil or commercial relations.
For businesses and public-sector organisations, the practical conclusion is clear: criminal-law risk remains material, but allegations must still be supported by precise proof of the elements of an offence, the criminal origin of property, the individual’s state of mind and the proportionality of the procedural measures used.
