Legislative Review June 12–25, 2026
COMMERCIAL LAW AND CORPORATE LAW
– The announced amendments to the Insolvency Law will abolish the Insolvency Control Service and transfer its functions to other entities
– Joint-stock companies must update their articles of association by July 1, 2026
REAL ESTATE AND CONSTRUCTION
– Amendments to Cabinet Regulations No. 693 “Construction Normative LBN 200-21, General Requirements for Buildings”
– Clarification of regulations on the unified construction process
– The Senate confirms that suspended ceilings are not considered part of a building structure
ENERGY
– Regarding “Recognition of the Law on the Procedure for Construction of Facilitated Energy Supply Structures Necessary for Promoting Energy Security and Independence as Having Lost Force”
– Amendments to the Law “On Environmental Impact Assessment” have been announced
– Amendments to the Electricity Market Law have been announced
– SPRK awaits opinions on amendments to the methodology for calculating natural gas distribution system service tariffs
LABOR LAW
BANKING AND FINANCIAL LAW
ENVIRONMENTAL LAW
– Amendment to the Law on Protection of Species and Habitats requires adopting a definition of old-growth forest
– A deposit system for the collection and recycling of e-cigarettes will be introduced
TAXES
– Infographic “Accumulation and Investment of Financial Resources by Public Benefit Organizations”
– Updated methodological material “Income from an Investment Account”
CUSTOMS
– Individuals will be prohibited from performing customs operations until the applicable administrative fine is paid
– Notice on valid proofs of origin for exports from the EU to Pacific countries
SANCTIONS
DISPUTE RESOLUTION
– Strengthening court powers for the protection of the property interests of a bona fide acquirer in situations where a choice must be made between returning real estate to the injured party or the bona fide acquirer
– Compensation in cases of damage caused by military incidents
– Motor vehicle owner’s civil liability insurance: EU law does not prohibit the assignment of a compensation claim against an insurance company
– The Senate refers questions to the Court of Justice of the European Union regarding exclusion periods and reliability assessment in public procurement
– The Senate overturns the judgment in the second Digital Television case and points to violations in the evaluation of evidence
ECONOMIC CRIMES
COMMERCIAL LAW AND CORPORATE LAW
Regulatory Acts
The announced amendments to the Insolvency Law will abolish the Insolvency Control Service and transfer its functions to other entities (Promulgated version)
Effective October 1, 2026.
Amendments to the Insolvency Law and related laws have been adopted. The Insolvency Control Service is being abolished, and its functions transferred to the Ministry of Justice, the Court Administration, and the Latvian Association of Insolvency Administrators.
The Ministry of Justice will henceforth ensure the supervision of insolvency administrators and legal protection process supervisors, review administrative offense cases, and appoint, remove, and initiate disciplinary proceedings against administrators. The Court Administration will take over functions related to the employee claims guarantee fund, including reviewing applications for satisfying claims of insolvent employers’ employees, disbursing deposits, and maintaining the electronic insolvency accounting system.
Industry News
Joint-stock companies must update their articles of association by July 1, 2026
01.07.2023. amendments to the Commercial Law came into force, stipulating that a joint-stock company may only have one type of shares (registered or dematerialized). The amendments also removed the requirement to specify the form of shares in the articles of association of a joint-stock company (previously, the Commercial Law provided that shares could be in paper and dematerialized form), as well as information on share conversion (if such was provided for in the articles of association). In view of the foregoing, joint-stock companies were required to make appropriate changes to their articles of association.
Amendments to the articles of association, which provide for the exclusion of the share form, must be submitted by the joint-stock company to the commercial register office simultaneously with other changes to the articles of association, by July 1, 2026.
REAL ESTATE AND CONSTRUCTION
Regulatory Acts
Amendments to Cabinet Regulations No. 693 “Construction Normative LBN 200-21, General Requirements for Buildings” (Project ID: 26-TA-510)
Adopted at the Cabinet of Ministers’ State Secretaries’ Meeting on June 18, 2026.
Clarifies what is included in the building’s footprint, stating that it only includes the largest above-ground external perimeter of the building, but does not include outdoor landscaping elements built next to the building, a terrace, gangway, porch-type area, etc., built next to the building. It is clarified that if a terrace is covered, it is a canopy. A freestanding terrace, on the other hand, is an outdoor landscaping element. In a construction project that has been approved (accepted) or submitted for approval to the construction authority in the prescribed manner by the date these amendments come into force, the building’s footprint, total area, and room area do not need to be recalculated, but this does not prevent these indicators from being clarified at any time in a previously initiated construction project, if desired. In the case of renovation and reconstruction of a building, insofar as it concerns improving the energy efficiency of the building’s structures, changes in the distance of the building’s enclosing structures to other buildings or land unit boundaries are not re-evaluated, nor is the building’s footprint, density, and building intensity re-evaluated. It should be noted that such energy efficiency improvement works must be carried out in compliance with the boundaries of one’s land plot, and they must not reduce the fire safety of the building.
Draft Regulatory Acts
Clarification of regulations on the unified construction process (Draft Law No. 1417/Lp14)
Adopted in the 1st reading on June 18, 2026. Proposals awaited until July 2, 2026.
06.01.2026. amendments to the Construction Law, the Land Register Law, and the Law “On Registration of Real Estate in Land Registers” came into force, introducing a unified building registration process (a process where the application for a construction intention is simultaneously an application for registration in the State Real Estate Cadastre Information System or the land register). The draft law provides for extending the unified building registration process to all construction cases, regardless of land ownership, i.e., by removing references to land ownership from the relevant article. The changes will expand the unified building registration process, allowing the simplified procedure to be used also in the construction of multi-apartment residential buildings, as well as in cases where the building is erected on another person’s land or on the basis of building rights. It is planned that the law will come into force on January 8, 2027.
Case Law
The Senate confirms that suspended ceilings are not considered part of a building structure (Case No. SKK-30/2026)
Two persons are accused in the case, one of whom is a construction supervisor, and the other is the project manager and author of the construction project. The indictment alleges that due to the negligent performance of duties by the accused, workers did not have access to specific specifications on how suspended ceilings should be constructed, and sufficient control and supervision were not carried out. Therefore, the suspended ceiling structure collapsed during operation. Respectively, they are accused of violating construction regulations, which resulted in the collapse of the building or part thereof.
The Senate found that for a criminal offense to be established, harmful consequences must have occurred – namely, the collapse of a building or part thereof as a result of violating norms or regulations. The concept of “part of a building” included in the historical version of the Criminal Law (version until October 28, 2014) is not identifiable with any building product or finishing element incorporated into a building, but rather with such a part of a building that, in the understanding of regulatory acts governing construction, can be an independent object of construction design documentation and commissioning. In the specific case, the ceiling served only as a finishing solution or a decorative aesthetic element, not as a load-bearing structure or an element ensuring the building’s strength, rigidity, or stability. Its replacement is considered a simplified reconstruction that does not require the development of a construction project and the issuance of a building permit. Since the harmful consequences provided for by law have not occurred, no elements of a criminal offense can be found in the actions of the accused.
ENERGY
Regulatory Acts
Regarding “Recognition of the Law on the Procedure for Construction of Facilitated Energy Supply Structures Necessary for Promoting Energy Security and Independence as Having Lost Force” (Version)
Adopted on June 18, 2026. Effective July 1, 2026.
The promulgated version stipulates that by August 31, 2026, the Cabinet of Ministers will make decisions on accepting or rejecting the proposed activity in accordance with the law that has lost force, regarding those draft orders submitted to the Cabinet of Ministers by June 14, 2026. The loss of force of the law does not affect building rights established under this law, and they remain in force for the entire term for which they were granted.
Announced Amendments to the Law “On Environmental Impact Assessment“ (Version)
Adopted on June 18, 2026. Effective July 1, 2026.
The promulgated version stipulates that the initiator of a proposed activity, who has doubts about the compliance of the proposed activity, consults with the local government regarding the compliance of the activity with the relevant local government’s territorial plan or local plan before submitting the application to the competent institution. The local government, upon receiving a written application from the initiator, provides a written opinion on compliance within one month. If the proposed activity does not comply with the relevant local government’s territorial plan or local plan, the initiator has the right to initiate the local government to start the development of amendments to the territorial plan or a new local plan. These requirements also apply to the submission of the proposed activity to the competent institution (not applicable to applications submitted by June 30, 2026) and the acceptance of the proposed activity (not applicable to proposed activities for which the State Environmental Service has made a decision on the application of environmental impact assessment by June 30, 2026). The initial assessment or environmental impact assessment of the proposed activity, initiated by June 30, 2026, in accordance with the law that has lost force, shall be continued and completed in accordance with Cabinet Regulations No. 18 “Procedure for Assessing the Environmental Impact of a Proposed Activity and Accepting the Proposed Activity.”
It is stipulated that an impact assessment is required for newly built roads if their length is 10 kilometers or more, and for the construction of wind power plants if their number is 5 or more, or if the total capacity is 35 megawatts or more. An initial assessment for wind power plants is required if their number is from 1 to 4 or if their total capacity is from 1 to 34.99 megawatts.
Announced Amendments to the Electricity Market Law (Version)
Adopted on June 18, 2026. Effective June 27, 2026.
The promulgated version stipulates the obligation for the Ministry of Economics (KEM) to issue requirements by December 31, 2026, as well as the procedure for their implementation and supervision, for wind power plant operation requirements regarding: (1) permissible noise limits, (2) visual impact during daylight hours, and (3) technical equipment for nature protection, environmental protection, and safety regulations. The amendments also stipulate the obligation for the Cabinet of Ministers to develop regulations by December 31, 2026, regarding the dismantling and demolition of renewable electricity generation facilities and storage units.
Draft Regulatory Acts
SPRK awaits opinions on amendments to the methodology for calculating natural gas distribution system service tariffs (Consultation Document)
Deadline for submitting opinions: July 1, 2026
The planned changes foresee clarifying the procedure for planning operating costs, supplementing the regulation with conditions for using the regulatory account, and making technical clarifications to ensure a clearer and unambiguous application of the methodology. It is planned that the amendments will come into force on August 1, 2026.
LABOR LAW
Case Law
The Senate changes case law and terminates proceedings in a case regarding termination of an employment contract during probation (Case No. SKC-35/2026)
Judgment adopted on June 10, 2026.
From the circumstances of the case, it appears that the plaintiff and the defendant concluded an employment contract that included a probationary period, but on the morning of the first working day, even before starting work, the defendant informed the plaintiff that they did not need to come to work and the employment contract would be terminated. The plaintiff filed a lawsuit in court.
The Senate recognized that, considering the essential features of the probationary period, in accordance with the law’s intent, an employee does not have the right to claim invalidation of a termination made during the probationary period and reinstatement, nor does he have the subordinate right to compensation for forced absence from work. The Senate recognized that an employee can only appeal to court against the termination of an employment contract during the probationary period with a claim for compensation for damages (both pecuniary and non-pecuniary) if the employment contract was terminated by the employer in violation of the prohibition of discriminatory treatment or the prohibition of creating unfavorable consequences. The employer has the right to terminate an employment contract during the probationary period before the employee has actually started performing work duties if, after concluding the employment contract, the employer has obtained information about the employee that gives grounds to conclude that the employee does not meet the requirements for the work to be performed and has not passed the probation.
In view of the foregoing, the Senate departed from previous case law findings regarding an employee’s right to claim reinstatement due to unjustified termination during the probationary period.
REGULATED LAW
Case Law
The temporary reduction of the second-pillar pension contribution rate by one percentage point is recognized as constitutional (Case No. 2025-14-01)
Judgment adopted on June 17, 2026.
The Court recognized as constitutional Paragraph 40 of the transitional provisions of the State Funded Pension Law, which reduced the mandatory contribution rate to the second pension pillar from six to five percent for four years, allocating one percentage point to the first pension pillar.
The case was initiated based on an application by 21 Saeima deputies. The deputies believed that the disputed norm violated the right to social security, as well as the principle of a socially responsible state and the principle of protection of legitimate expectations.
The Court concluded that the said norm aims to protect individual rights and ensure the well-being of society as a whole, balancing the interests of current and future pension recipients.
BANKING AND FINANCIAL LAW
Draft Regulatory Acts
Regulations for insurance intermediaries will be improved to promote insurance accessibility and higher quality services (Project ID: 24-TA-480)
Adopted at the Cabinet of Ministers’ meeting on June 16, 2026.
The amendments to the Insurance and Reinsurance Distribution Law foresee simplifying certain registration and supervision processes. One of the most significant innovations provides for centralizing the registration of insurance agents and ancillary insurance intermediaries in the electronic environment of the Bank of Latvia. It is also planned to simplify certain requirements for the registration of insurance and reinsurance brokers, reducing the volume of documents and information to be submitted. The draft law will still be submitted to the Saeima for consideration.
ENVIRONMENTAL LAW
Draft Regulatory Acts
Amendment to the Law on Protection of Species and Habitats requires adopting a definition of old-growth forest (Draft Law No. 1430/Lp14)
Submitted to the Saeima on June 18, 2026.
Currently, Latvia does not have an approved, nationally binding definition of old-growth forest, although it is required by European Commission guidelines and European Union Regulation 2024/1991 on nature restoration. The draft law stipulates that until the date when the Cabinet of Ministers adopts a definition of old-growth forest and its application criteria, it is prohibited to issue felling permits, as well as to otherwise allow tree felling in stands in accordance with EU law.
A deposit system for the collection and recycling of e-cigarettes will be introduced (Draft Law No. 1270/Lp14)
Adopted in the 3rd reading on June 18, 2026.
Amendments to the Waste Management Law foresee the creation of a unified national deposit system for e-cigarettes with non-rechargeable batteries. Manufacturers and distributors will have to conclude an agreement with the system operator, while consumers, when purchasing such a cigarette, will pay a deposit fee. This will be refunded upon returning the used device. The manufacturer will have to provide information about the device’s participation in the deposit system both on the packaging and on the device itself. The Cabinet of Ministers will have to determine the procedure for ensuring the operation of the deposit system, the coverage of deposit points, collection and recycling volumes, as well as requirements for system accounting and operator reports, as provided by the changes.
TAXES
Industry News
Infographic “Accumulation and Investment of Financial Resources by Public Benefit Organizations” (Infographic)
The infographic explains that a public benefit organization may accumulate financial resources in credit institutions and invest funds in securities issued on a regulated securities market. Accumulated funds must be used in accordance with the organization’s statutory, constitutional, or regulatory objectives and areas of activity, as well as the conditions specified in the donor agreement. At the same time, the accumulation of funds must comply with internal financial management principles, ensuring transparency and preventing private benefit for persons associated with the organization.
Updated methodological material “Income from an Investment Account” (Methodological Material)
In the section “Declaration and Tax Payment,” the annual income declaration images and appendix names have been clarified in accordance with the amendments of October 21, 2025, to Cabinet Regulations No. 662 of October 30, 2018, “Regulations on Personal Income Tax Declarations and the Procedure for Their Completion.” The changes are effective from March 1, 2026, when submitting the annual income declaration for 2025. Additionally, a reference has been added as an explanation to example 12 in the methodological material, and examples 16 and 17 have been clarified.
CUSTOMS
Draft Regulatory Acts
Individuals will be prohibited from performing customs operations until the applicable administrative fine is paid (Draft Law No. 1214/Lp14)
Adopted in the 3rd Reading on June 11, 2026.
Amendments to the Customs Law foresee restrictions for individuals and carriers who have not paid administrative fines for violations in the customs or sanctions area on time. Until the fine is paid, individuals will be prohibited from performing customs operations, and carriers will be prohibited from transporting goods subject to customs clearance in the territory of Latvia.
Industry News
Notice on valid proofs of origin for exports from the EU to Pacific countries (Notice)
Published in the Official Journal of the EU on June 11, 2026.
The notice states that from September 1, 2026, for goods of EU origin, the benefits provided for in the partnership agreement may be used when they are released for free circulation in Pacific countries, if an invoice declaration prepared by an exporter registered in the REX system is submitted. However, movement certificates EUR.1, currently issued to prove preferential origin from the EU, will no longer be accepted by Pacific countries for the application of preferences from the said date.
SANCTIONS
Draft Regulatory Acts
Information on companies cooperating with Russia and Belarus will be published (Draft Law No. 1308/Lp14)
Adopted in the 2nd Reading on June 18, 2026.
Amendments to the Law on Support for Ukrainian Civilians foresee the obligation for the Central Statistical Bureau (CSB) to publish information on its website once a month about companies that export or import goods to or from Russia or Belarus. At the same time, it is stipulated that the confidentiality restrictions specified in the Law “On Taxes and Fees” regarding data obtained from the tax administration will not apply to this information.
Draft Regulatory Acts
The EU expands sanction lists (FID: News)
Decision adopted on June 15, 2026.
The Council of the European Union (EU) adopted a decision to expand the sanction lists against Russia, imposing restrictive measures on additional persons. The changes foresee supplementing the lists of natural and legal persons to whom targeted financial sanctions apply.
DISPUTE RESOLUTION
Draft Regulatory Acts
Strengthening court powers for the protection of the property interests of a bona fide acquirer in situations where a choice must be made between returning real estate to the injured party or the bona fide acquirer (Draft Law No. 1243/Lp14)
Adopted in the 2nd reading on June 11, 2026. Proposals awaited until July 10, 2026.
It is planned to supplement the Criminal Procedure Law, stipulating that the owner of affected property has the right to submit applications for investigative and other actions regarding the property and to request information on the progress of the criminal proceedings. Additionally, it is planned to stipulate that the process manager informs the owner of the affected property about the adoption of the final decision in the criminal proceedings. It is also planned to stipulate that in exceptional cases, if criminally acquired property is real estate and a fair settlement of criminal law relations cannot be achieved by returning it to the injured party, with respect to a third party who is a bona fide acquirer of the property, the court may, with special justification, leave it in the ownership of the third party if their ownership rights are registered in a public register.
Compensation in cases of damage caused by military incidents (Draft Law No. 1429/Lp14)
Adopted in the 2nd reading on June 18, 2026.
The adopted amendments to the Civil Protection and Disaster Management Law provide authorization for the Cabinet of Ministers to determine the procedure, deadlines, and amount of compensation for residents, businesses, and owners of public infrastructure if damage is caused by a military incident in peacetime.
Case Law
Motor vehicle owner’s civil liability insurance: EU law does not prohibit the assignment of a compensation claim against an insurance company (Case No. C-277/25)
Judgment adopted on June 25, 2026.
In Poland, several individuals whose vehicles were damaged in road traffic accidents received compensation from the insurance companies of the at-fault parties. They believed that the amounts received did not fully cover the damages, and therefore assigned their compensation claims to companies specializing in debt collection. These specialists then filed lawsuits against the respective insurers. The Polish court hearing these disputes referred the case to the Court of Justice of the European Union (CJEU) to clarify whether the EU directive on civil liability insurance in respect of the use of motor vehicles and control of the obligation to insure such liability permits or prohibits such assignment of compensation rights.
The CJEU states that the purpose of the said directive is to ensure the protection of victims of road traffic accidents and to guarantee compulsory civil liability insurance for vehicles. The scope of protection of the directive applies to persons who are victims within the meaning of the directive. The CJEU considers that a person who has acquired the right to claim compensation on behalf of the victim is not considered a victim within the meaning of the directive, as their rights do not arise from national civil liability laws, but from a contract concluded with the person who suffered material damage as a result of a road traffic accident. However, the CJEU notes that the directive does not prohibit national laws that allow the assignment of compensation claims and authorize the assignee to bring an action in court on behalf and in the interests of the victim to recover claims from the said company.
The Senate refers questions to the Court of Justice of the European Union regarding exclusion periods and reliability assessment in public procurement (Case No. SKA-109/2026)
Decision adopted on June 25, 2026.
The applicant in the case is a commercial company that had submitted a bid in a municipal tender for vehicle rental. Since the Competition Council had previously fined the applicant for a horizontal cartel agreement and the applicant had not convinced the tender organizer of its reliability, the applicant was excluded from participating in the procurement. The Procurement Monitoring Bureau upheld this decision and allowed the contracting authority to conclude an agreement with the tender winners.
When examining the applicant’s cassation appeal, the Senate recognized that for the proper resolution of the case, it is necessary to clarify whether the Latvian legal norms applied in the case are compatible with European Union law. According to the CJEU’s findings, the contracting authority has the freedom to independently assess issues regarding the honesty and reliability of tenderers and the obligation to justify its decision, but there are doubts as to whether the contracting authority, in circumstances where the decision of the competition authority has been appealed, can itself refrain from verifying the existence of a possible violation of competition law. Doubts also exist as to whether the European Union legal norms on the maximum exclusion period are consistent with the regulation according to which a tenderer may be excluded from public procurement procedures for three years from the adoption of a competition authority’s decision establishing a violation of competition law by the tenderer, and then for three years from the final entry into force of such a competition authority’s decision. Furthermore, the fundamental rights of the tenderer may be affected in the case. The Senate has suspended the proceedings in the case and referred three preliminary questions to the Court of Justice of the European Union.
The Senate overturns the judgment in the second Digital Television case and points to violations in the evaluation of evidence (Case No. SKK-1/2026)
Adopted on June 25, 2026.
Nine persons are accused in the case of fraud, i.e., obtaining another’s property by abusing trust and deceit, which occurred on a large scale and in an organized group, and one of these persons is also accused of legalizing criminally acquired funds on a large scale. In the prosecutor’s opinion, the accused acted in such a way as to unlawfully involve a specific company as an intermediary in the digital television implementation project, as a result of which it obtained financial resources amounting to several million euros, and this national project was unjustifiably inflated. The Economic Affairs Court and the Riga Regional Court had found all the accused innocent of the charges brought against them and acquitted them.
The Senate found that the appellate court had not evaluated the evidence in the case in accordance with the requirements of the Criminal Procedure Law. By acknowledging that payments to the intermediary did not cause losses to the winner of the digital television broadcasting tender, the court unjustifiably concluded that profiting from the project excludes causing losses. Similarly, when evaluating the circumstances of the introduction of digital television broadcasting and the development of its legal regulation, the court did not evaluate the witness testimonies and expert opinions provided by state institutions in the case, and therefore the prosecution’s position that the text of the Cabinet of Ministers’ draft regulations was deliberately amended during its drafting, after being submitted for consideration at the state secretaries’ meeting, to create a basis for involving an intermediary in broadcasting, was not refuted by evidence. The Senate also found that the court had incompletely evaluated the findings expressed in the State Audit Office’s audit report regarding the development of the tender regulations and its conduct.
The Senate overturned the judgment and remanded the case for new consideration.
ECONOMIC CRIMES
Industry News
More than 2.7 million euros and three real estate properties recognized as criminally acquired and confiscated in favor of the state (Available here)
2026. In June, the Economic Affairs Court decided to recognize as criminally acquired and confiscate in favor of the state 2,762,186.46 euros and three real estate properties – apartments – in Riga.
The criminal proceedings, from which materials on criminally acquired property were separated, were initiated in September 2021 regarding the possible use of three private individuals’ accounts and one company’s account for the purpose of legalizing funds obtained as a result of an unidentified criminal offense committed abroad. From 2015 to 2019, funds were received in these accounts from foreign companies with characteristics of shell entities, and information was obtained about their involvement in an international scheme for legalizing criminally acquired funds.
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VIKTORIJA Cherkas
PARTNER, ATTORNEY AT LAW
Viktorija is a Latvian legal expert recognized by international directories in project management and mergers and acquisitions (M&A), including energy projects (development of wind and solar park projects).
Viktorija also provides legal advice for day-to-day business operations – from company formation, management, shareholder relations, restructuring, and other business-related matters. At the same time, Viktorija is an expert in real estate development, acquisition, and leasing, and provides assistance to individuals and companies regarding relocation or property acquisition in Spain.
ALISA LEŠKOVIČA
PARTNER, ATTORNEY AT LAW
Alisa is an experienced advocate and a partner at RockBridge Legal. Since 2008, Alisa has advised clients and provided legal assistance in complex tax and customs matters.
Alisa also specializes in anti-money laundering (AML), sanctions, and compliance matters. Alisa has significant experience in corporate crime and investigation cases related to tax, customs, and sanctions issues.
Viktorija Jarkina-Toča
PARTNER, ATTORNEY AT LAW
Dr. iur. Viktorija Jarkina is a partner at RockBridge Legal, ranked by international legal directories Chambers Europe, Chambers Global, Best Lawyers, and Legal 500 among the leading criminal defense attorneys in Latvia.
Viktorija specializes in shareholder disputes, civil and commercial litigation, as well as criminal law, providing representation and defense in white-collar crime cases, including money laundering and environmental offenses. Additionally, Viktorija has extensive experience working with franchises, providing full legal assistance related to franchising.