The first quarter of 2026 has highlighted several clear trends in criminal law. Case law is consolidating a broader approach to confiscation and the enforcement of sanctions. At the same time, economic crime, oversight of the use of public funds and scrutiny of the lawfulness of public officials’ conduct remain key areas of focus for investigative authorities. On the legislative front, changes are expected in the near future concerning the management of confiscated property, the collection of electronic evidence and the fight against prohibited agreements in public procurement.
What was: key developments in case law
Judgment of the Court of Justice of the European Union in Case C-8/24
The Court of Justice of the European Union (CJEU) confirmed that an EU Member State is required to recognise and execute a confiscation order issued by another Member State even where the person concerned has not been convicted – including where that person has been acquitted but the court has established that the property is of criminal origin.
The Court’s focus is on the origin of the property rather than the conviction of a particular individual. Refusal to execute a confiscation order issued by another Member State should therefore be the exception rather than the rule.
An alleged breach of fundamental rights may serve as grounds for refusal only where there is specific and objective evidence of a manifest and serious risk. Furthermore, where a person has not made use of the legal remedies available in the Member State that issued the order, that person cannot, as a rule, raise those arguments in the executing Member State.
In practical terms, this means a stricter application of the principle of mutual recognition and more limited scope for the executing Member State to review the substance of a decision taken in the issuing Member State.
Judgment of the Court of Justice of the European Union in Case C-84/24, UAB “EM SYSTEM”
The CJEU confirmed that, under the EU sanctions regime, the freezing of funds may also extend to companies that are not themselves included on a sanctions list. It is sufficient for their assets to be effectively owned, held or controlled by a sanctioned person.
Where a sanctioned person owns 50% or more of a company’s capital, the CJEU considers the company’s funds to be controlled by the sanctioned person and therefore subject to freezing. A presumption of control may also arise below the 50% threshold where the sanctioned person is in fact able to exercise a dominant influence.
At the same time, a company whose funds have been frozen because of its links to a sanctioned person is entitled to challenge the freezing and seek its removal if it can demonstrate that the sanctioned person does not in fact own, hold or control the assets concerned.
Findings of the Senate in Case SKK-28/2026
In this case, the Senate of the Supreme Court of Latvia reinforced a strict approach to assessing breaches of EU sanctions. In particular, a mistaken understanding as to whether certain conduct is prohibited does not, in itself, exempt a person from criminal liability.
The Senate emphasised that EU regulations are directly applicable and binding on both natural and legal persons from the moment they are published in the Official Journal of the European Union, irrespective of whether national authorities have actively communicated the restrictions concerned.
In the case at hand, the company’s management argued that it had relied on information being provided by ministries and the relevant sectoral agencies. The Senate rejected this argument, finding that the obligation to monitor directly applicable EU legislation rests with the company and its management rather than with public authorities.
In practical terms, companies, management board members and persons involved in transactions have an active obligation to ensure that their activities comply with the applicable sanctions regime. A lack of awareness or reliance on other parties to take the initiative will not, in this context, provide a defence.
Findings of the Senate in Case SKK-4/2026
In this case, the Senate considered the appropriate legal classification of unlawful conduct by a public official. A customs officer had effectively facilitated smuggling by replacing cargo scanner data with falsified data, thereby enabling undeclared tobacco products to be imported and causing losses to the State of almost EUR 1.84 million.
The lower courts classified the conduct solely as forgery of documents, without addressing the constituent elements of either smuggling or exceeding official authority.
In an ancillary decision, the Senate drew the prosecution’s attention to the incorrect legal classification. It noted that the objective elements of smuggling are not limited to the physical movement of goods across a border, but also encompass any unlawful means of circumventing customs controls, including concealing the contents of a shipment or using falsified data. The customs officer was therefore to be regarded as a co-perpetrator of the smuggling offence.
At the same time, conduct which in itself constitutes another criminal offence may also constitute exceeding official authority. The Senate stressed that an incorrect legal classification is unacceptable where it places a public official in an unjustifiably more favourable position than a private individual.
Accordingly, the liability of public officials must be assessed in full and should not be confined to the provision that appears most readily applicable as a matter of form.
Decision of the Senate in Case SKA-222/2026
An individual has a right to seek judicial review of the conduct of municipal police during a public event even where the police formally took action but, in the individual’s view, that action was insufficient. The prerequisite is the existence of an individualised legal interest.
In other words, a person who may have been directly and materially affected by police inaction – for example, the owner of property located near the event – has standing to bring the matter before the court.
At the same time, the Senate expressly stated that an association or other legal entity may not bring such proceedings in the general public interest unless the legislature has specifically provided for such a right. Nor may a legal entity rely on a threat which, by its nature, can affect only natural persons, such as a threat to health or personal safety.
Accordingly, anyone whose rights or legitimate interests may have been affected during a public event as a result of inadequate police action may seek review by the administrative courts. NGOs and associations, by contrast, do not have such standing in the absence of an express statutory mandate.
What is: current focus of investigative authorities
Publicly available information for Q1 2026 points to two predominant areas of focus: economic crime and integrity in public administration.
In the area of economic crime, there continues to be a strong focus on tax evasion, VAT schemes, money laundering and fraud involving public funds. Cases brought before the courts include large-scale tax evasion, artificially constructed transaction chains designed to conceal income, VAT fraud and money-laundering schemes carried out by organised groups, as well as fraud within the healthcare system involving manipulation of data relating to reimbursable medicines.
This demonstrates that controlling financial flows, uncovering artificial business structures and recovering proceeds of crime remain key priorities for the authorities.
Sanctions violations also warrant particular attention. Compliance with sanctions remains an area of focus for investigative authorities, and violations are increasingly being treated as a material criminal law risk.
The second significant area concerns offences involving public officials and the public sector. Here, attention is focused on exceeding official authority, the use of public office for private interests and integrity in public procurement.
Particularly noteworthy are the activities of the European Public Prosecutor’s Office and Latvian authorities in connection with suspected fraud involving IT procurement, in which both business representatives and public officials are implicated. This indicates that criminal law risks are particularly significant where public funding intersects with the exercise of influence over decision-making.
Overall, developments in the first quarter show that investigative authorities are concentrating on cases involving significant financial impact, complex organisational structures and areas in which public trust is particularly important.
What lies ahead: upcoming legislative developments
Among the current legislative initiatives, three areas are likely to have the greatest practical significance: seizure and confiscation of property and related property matters, electronic evidence, and the criminalisation of cartels.
Management and confiscation of seized property
First, changes are expected in the management and confiscation of seized property. Amendments to the Criminal Procedure Law prepared by the Ministry of Justice envisage a shift from the current approach of merely preserving seized property towards a more active asset management model.
The objective is not only to preserve seized property but also to prevent depreciation in its value and, in certain cases, to enable more effective management of the property. The regulatory framework governing the confiscation of instrumentalities of crime is also expected to be expanded, thereby strengthening the State’s asset recovery mechanisms.
A draft law amending the Law on Compensation for Damage Caused in Criminal Proceedings and Administrative Offence Proceedings has been returned to the Saeima for reconsideration following objections raised by the President of Latvia, bringing renewed attention to the protection of the rights of owners whose property has been affected by criminal proceedings.
The amendments seek to provide more timely, fair and effective compensation in cases where a person’s property rights have been unjustifiably restricted. Most notably, it is proposed that entitlement to compensation could arise once the seizure of property is lifted, without requiring the person to wait until the underlying criminal proceedings have been terminated.
Discussions also continue on broader procedural safeguards, including informing affected property owners when criminal proceedings are terminated and establishing clearer grounds for lifting the seizure of property.
Electronic evidence
Second, the EU E-evidence Regulation and Directive establish a uniform mechanism for obtaining electronic evidence from service providers located in other Member States.
At national level, amendments are being prepared to the Criminal Procedure Law, the Law on Information Society Services and the Electronic Communications Law. These changes will enable electronic data to be obtained more quickly and directly, reducing reliance on traditional instruments of international mutual legal assistance.
The new framework is expected to apply from 18 August 2026.
Criminal liability for prohibited agreements in procurement
Third, amendments progressing through the Saeima envisage supplementing the Criminal Law with new provisions directly criminalising prohibited agreements in procurement.
The significance of this initiative extends beyond competition law. It sends a clear signal that the distortion of procurement procedures is being treated as conduct warranting criminal sanctions under a distinct and clearly defined criminal offence.
Two further legislative initiatives also merit attention.
First, amendments to the Law on Operational Activities have been developed in response to findings of the Senate and are intended to establish clearer rules governing the use of information obtained through operational activities in other proceedings.
Second, the draft Law on Integrity in Public Administration and Prevention of Conflicts of Interest, prepared by the Corruption Prevention and Combating Bureau (KNAB), is currently undergoing public consultation.
The new law would replace the legislation adopted in 2002 and expand its scope from public officials to all persons employed in public administration – approximately 287,000 people. The emphasis is expected to shift from prohibitions towards internal risk management. The concept of an “apparent conflict of interest” would be introduced, while responsibility for establishing internal control systems would be placed on the heads of public institutions.
Although this regulatory framework primarily concerns the public sector, it is also relevant to businesses whose activities involve or interact with public administration institutions.
Key takeaways
The direction of criminal law developments in Q1 2026 has been clear. Case law is reinforcing broader mechanisms for confiscation and sanctions enforcement while maintaining high standards of procedural safeguards.
Investigative authorities continue to focus on economic crime, scrutiny of the use of public funds and the liability of public officials. At the same time, the legislature is moving towards stricter and more modern tools for asset recovery, obtaining digital evidence and safeguarding the integrity of public procurement.
Developments in criminal law are increasingly moving beyond the boundaries of “traditional” criminal law. Instead, they sit at the intersection of financial supervision, sanctions compliance, public administration and business risk management.
