Legislative Review March 27 – April 9, 2026

COMMERCIAL AND CORPORATE LAW

Draft legislative acts

Implementation of EU Directive requirements for the supervision of financial conglomerates and exchange of information (Project ID: 26-70-418)

The Cabinet of Ministers submitted for public consultation from March 18 to April 1, 2026

Amendments to the Law on the Recovery and Resolution of Credit Institutions and Investment Brokerage Firms have been developed to transpose articles of EU Directive 2025/1 regarding an institution, financial company, or group that is part of a financial conglomerate (a group operating in various financial sectors (banking, insurance, etc.), providing a wide range of services) or where the group itself is a financial conglomerate.

The amendments clarify what information provided or received by insurance supervision and insurance resolution authorities is to be recognized as restricted access information. They will expand the exchange of information between authorities, providing for cases when the Bank of Latvia must report to insurance supervision and insurance resolution authorities. Additional amendments specify cases where certain requirements set out in the Financial Collateral Law, the Share Buyback Law, the Commercial Law, and the Financial Instrument Market Law do not apply.

REAL ESTATE AND CONSTRUCTION

Legislative acts

New amendments will facilitate the consolidation and demolition of telecommunications engineering networks (Project ID: 25-TA-983)

Adopted at the Cabinet of Ministers meeting on March 31, 2026

Amendments to Cabinet Regulation No. 501 “Building Regulations for Electronic Communications Engineering Structures” introduce an “engineering network layout scheme” – a compilation of orthophoto maps, red lines, and cadastral data in a visually perceptible form – which will replace topographical plans. Additionally, the preservation and consolidation of overhead lines are provided for. The right to restore and rebuild legally constructed overhead lines is introduced, maintaining them as overhead lines if their volume is not increased and approval from the building board is received. The amendments are scheduled to enter into force on August 1, 2026.

Draft legislative acts

Construction work will be able to start on one phase in parallel with the design of another phase (Bill No. 1301/Lp14)

Adopted in the 1st reading on April 1, 2026; Proposals awaited until April 24, 2026

The current regulation of the Construction Law stipulates that detailed design of all parts of the building must be completed before any physical work begins. The proposed amendments to the law would allow construction work to start on one phase while the detailing of subsequent phases is still ongoing. Construction phases must be determined in a sequence that guarantees the structural stability of the building; furthermore, coordination with third parties and authorities regarding the placement of buildings must be mandatory from the start. Additionally, the building board will be obliged to make decisions on each subsequent construction phase within 10 working days. The law is scheduled to enter into force on June 1, 2027.

Case law

Privatization of a built-up land plot when the buildings belong to a company but the land belongs to the municipality (Case No. A420206723)

Judgment delivered on March 30, 2026

Company B owned buildings associated with land belonging to the city. Later, Company B entered into an agreement with Company C, as a result of which the buildings passed into the ownership of C. Company C wished to privatize the said land; however, the land plot privatization process was suspended because the city council filed a lawsuit asking to recognize the agreement concluded between the companies as simulative, as well as to recognize the council’s ownership rights to the buildings based on the right of redemption. Within the framework of the litigation, the claim regarding the recognition of ownership rights was rejected, but the agreement concluded between the companies was recognized as a simulative transaction, identifying it as a purchase agreement.

After the conclusion of the litigation, the owner of the buildings still could not privatize the land because the municipal council did not issue the corresponding decision. The owner of the buildings had to continue paying the land rent. Later, the owner of the buildings filed a lawsuit asking the council to issue an official decision on the privatization of the built-up land plot and to pay compensation for damages incurred by the building owner for paying the rent. The Administrative Court rejected the claim regarding the compensation of damages, concluding that there was no causal link between the unlawful actions of the Riga City Council and the losses incurred by the applicant in the form of rent, as the applicant herself had not fulfilled her obligations in a timely manner, including paying the rent, which was an obstacle to concluding the privatization process. Furthermore, the interim relief established during the litigation prevented the municipality from disposing of the disputed land plot.

Industry news

From April, the unified building registration process can also be used for new constructions (SLS: News)

Effective from April 1, 2026

Henceforth, a declaration of an unfinished new construction can be submitted in the Construction Information System (BIS) for buildings whose construction is not yet complete and which have not been commissioned, but which already physically exist in nature and can be registered in the Cadastre Information System and the Land Register.

Recalculation of fiscal cadastral value has been performed for a portion of land units (SLS: News)

Published on March 20, 2026

For land units and parts thereof where at least one of the purposes of use is residential development and which have the status of a cultural monument, a coefficient of 0.7 was applied when calculating the cadastral value until February 1, 2025, which reduced it by 30%. Currently, such a reduction is no longer applied, and the State Land Service, having found that the incorrect coefficient was still erroneously applied to some properties, has recalculated the values accordingly and published them on the relevant portals.

ENERGY

Legislative acts

Regulations on the issuance of permits for the installation of direct electricity lines (Regulations)

Adopted at the Cabinet of Ministers meeting on March 31, 2026

The regulations determine how to obtain and maintain a permit for the construction of a direct electricity line. A construction project must be submitted within 9 months after receiving the permit. It is important that the line is built and commissioned on time. It is stipulated that the responsible authority itself requests a reasoned assessment from the operator that the installation of the direct line will not have a negative impact on the safe operation of the system or technical development.

Regulations on the restriction of flexible and interruptible electricity transmission system services (Published version)

Entered into force on March 31, 2026

The regulations determine the procedure for restricting flexible and interruptible electricity transmission system services, recording the restriction time and the amount of electricity not delivered to the system, as well as performing settlements with the electricity transmission system operator for the implemented restriction and how compensation for restrictions is carried out. Restrictions are determined in priority order, first restricting those connections whose reduction most effectively prevents network overload. The amount of compensation is calculated taking into account the amount of electricity not delivered and a combination of market prices.

Regulations on the change of types of electricity transmission system services (Published version)

Entered into force on March 31, 2026

The regulations determine the procedure by which an electricity producer can change from a flexible transmission system service to a constant one. This transition occurs at the initiative of the system operator. The operator first identifies producers who meet certain criteria, after which an offer to change the type of service is made to these producers, on which the producers must make a decision within 30 days. If the producer agrees, corresponding amendments are made to the system service agreement.

Draft legislative acts

Consultation document on amendments to the methodology for calculating electricity distribution system service tariffs (Consultation document)

PUC awaits opinions until April 23, 2026

The amendments envisage clarifying the determination of the electricity balance, providing for a unified approach regardless of the capacity of the electricity production equipment connected to the distribution system. Communication and public information costs are intended to be limited to 0.2% of the average operating costs included in the tariff project. It is also planned to introduce new criteria for evaluating the costs of outsourced services purchased by operators, stipulating that large operators (more than 100,000 users) must provide justification to the Regulator if costs exceed 0.1%, and small operators if costs exceed 1%. It is planned to clarify that the distribution system operator may determine a different structure for the variable and fixed parts of the tariff at different voltage levels if there is an appropriate economic justification. Significant clarifications are also planned for the procedure for calculating and using the regulatory account. Simultaneously, it is planned to clarify the procedure by which allowed revenues are allocated by voltage levels. Separate amendments are also planned for the process of coordinating the cost allocation model, as well as providing the possibility to change the tariff structure during the regulatory period in certain cases, not only in connection with the use of the regulatory account.

PUC holds a meeting to coordinate opinions on system connection rules for the electricity transmission system (Consultation document)

The coordination meeting will take place on April 13, 2026

At the opinion coordination meeting, the PUC will introduce participants to the opinions received during the public consultation on the system connection rules for the electricity distribution and electricity transmission systems. The amendments envisage introducing two new draft regulations instead of the current three, which will establish a clear procedure for connecting electricity consumption and production equipment, as well as electricity storage facilities, to the electricity transmission and distribution systems.

Consultation document on amendments to the regulations on requirements for the independence of the electricity distribution system operator (Consultation document)

PUC awaited opinions until April 10, 2026

The draft amendments have been developed to ensure the compliance of Regulator’s Decision No. 1/4 “Regulations on requirements for the independence of the electricity distribution system operator” with changes in the legal framework of the electricity sector. Sub-paragraphs 2.1 and 2.2 of the decision have been amended, expanding the scope of the regulation by stipulating that the conditions for independence and prevention of conflict of interest apply not only to members of the system operator’s management board but also to members of the supervisory board and proxies.

Industry news

Applications accepted for the purchase of environmentally friendly energy production equipment for apartment building owners, energy communities, municipalities, and state institutions (MCE News)

Application acceptance starts on April 1, 2026; Applications accepted until June 1, 2026

The total available funding within the Modernization Fund is 26.8 million euros, and it can be received for the purchase of electricity and heat energy production equipment – solar panels (including batteries), heat pumps, and solar collectors, for the construction of infrastructure related to the operation of this equipment, as well as for the preparation of necessary technical documentation. An authorized person of the apartment owners of an apartment building, including a house manager, administrator, or apartment owners’ association, as well as other interested parties – energy communities, state and municipal institutions and their capital companies, as well as public-private capital companies – can apply for support.

REGULATORY LAW

Legislative acts

Amendments to the Law “On Land Privatization in Rural Areas” announced (Published version)

Announced on April 2, 2026; Enters into force on April 3, 2026

Henceforth, the decision on the compliance of an alienation transaction with the requirements of the law in cases of rural land alienation will be made by the chairman of the council.

Case law

Unauthorized construction of an overhead line in the city’s historical center (Case No. A420162724)

Judgment delivered on March 30, 2026

The company submitted an application for the annulment of the decision of the municipal City Development Department, which imposed obligations on the company to dismantle two electronic communications overhead lines. The court annulled the decision regarding the first overhead line, which was built during the Soviet era and privatized, as the legality of its construction is no longer verifiable. Conversely, the second overhead line was installed without a building permit in the territory of the Riga Historical Center. The court recognized it as unauthorized construction and the demand for its dismantling as proportionate, as electronic communications networks in such territory may only be placed in underground cable lines.

The Senate emphasizes the competence of the National Electronic Mass Media Council and annuls the regional court judgment by which the council’s decision was not evaluated on its merits (Case No. SKA-98/2026)

Judgment delivered on March 26, 2026

The Senate annulled the judgment of the Administrative Regional Court by which the regional court groundlessly recognized that the National Electronic Mass Media Council (NEPLP) had exceeded its competence by banning the distribution of television programs in Latvia whose owner is subject to sanctions imposed by the United States Office of Foreign Assets Control. The Senate emphasized the broad autonomous competence and discretion of the NEPLP in the field of electronic mass media, especially considering the geopolitical context and the need to protect state and public security interests. The Senate found that the regional court, by erroneously understanding the council’s competence, had failed to evaluate the decision itself on its merits.

BANKING AND FINANCE LAW

Draft legislative acts

Proposal to transfer the licensing and supervision function of non-bank consumer lenders, as well as the protection of consumer rights and interests in the financial services sector, to the Bank of Latvia (Project ID: 26-UZ-153)

The Cabinet of Ministers submitted for coordination from April 2 to April 20, 2026

Amendments to the Consumer Rights Protection Law provide that a financial service provider whose activities have been authorized by the Bank of Latvia and who has the right to provide consumer credit services under other regulatory acts will not need to obtain an additional separate license specifically for consumer credit. Simultaneously, all supervision of consumer credit and related services will be transferred to the Bank of Latvia, and it will be delegated broader rights to issue binding regulations on credit procedures, information provision, contract requirements, and other matters. Instead of state fees, service providers will pay the Bank of Latvia for license review and supervision; furthermore, the fee will be more closely linked to the volume of the company’s operations. A reporting mechanism for violations in the financial sector is being introduced, and the procedure for applying sanctions is being changed, moving to an administrative process model.

Industry news

Implementation of the non-bank lender supervision reform (MF: News)

Published on April 2, 2026

The aim of the reform is to create simple and effective supervision of financial services while reducing bureaucracy and avoiding duplication of work. The Ministry of Finance, in cooperation with the Bank of Latvia, has prepared a package of 13 bills, which provides for the transfer of the registration, licensing, and supervision functions of consumer lenders and credit intermediaries, currently implemented by the Consumer Rights Protection Centre, to the Bank of Latvia. The package of bills is based on the bill “Amendments to the Consumer Rights Protection Law”; simultaneously, amendments to several related regulatory acts have been prepared to ensure uniform application of the regulation.

IMMIGRATION

Case law

OCMA decision to revoke citizenship recognized as lawful because the person knowingly acquired Russian citizenship (Case No. A420156024)

Judgment delivered on March 27, 2026

The Office of Citizenship and Migration Affairs (OCMA) found that a person holding Latvian citizenship had also received Russian citizenship. Given that upon acquiring Russian citizenship, Latvian citizenship cannot be maintained, and the person had not renounced Latvian citizenship within the period specified by law, the OCMA revoked it. The person submitted an application to the court asking to annul the OCMA decision, claiming that he did not have Russian citizenship at all. The court rejected the person’s application because it found that the person had knowingly become a Russian citizen and the documents submitted regarding the loss of Russian citizenship were forged.

Industry news

Asylum seeker reception standards are being adapted to the requirements of the new European Union (EU) Migration and Asylum Pact (read more here)

Published on April 7, 2026

The Office of Citizenship and Migration Affairs (OCMA) has launched the European Union fund project “Raising Asylum Seeker Reception Standards for the Implementation of the Migration and Asylum Pact,” the aim of which is to modernize the asylum seeker reception infrastructure and improve the provision of support to persons in need of international protection.

ENVIRONMENTAL LAW

Legislative acts

Municipal powers in noise restriction and the use of sound equipment (Published version)

Entered into force on March 28, 2026

The amendments stipulate that the municipality may issue binding regulations providing for the issuance of municipal permits in cases where noise will be generated during events, as well as regulations providing for requirements and procedures for the use of sound-amplifying equipment and requirements regarding sound insulation. Additionally, the municipality may designate institutions authorized to control the implementation of the respective regulations.

Improvement of waste management regulation (Bill No. 1270/Lp14)

Adopted in the 1st reading on April 1, 2026; Proposals awaited until April 28, 2026

The bill “Amendments to the Waste Management Law” proposes to introduce a deposit system for electronic smoking devices and to update the functions of the State Environmental Service following the merger of the Energy and Environment Agency. Changes regarding batteries are also being introduced, and the waste accounting system is being improved.

Industry news

Latvia will strengthen the sustainability of the water management sector in cooperation with the OECD (read more here)

Published on April 9, 2026

In 2026–2027, the Ministry of Climate and Energy is participating in the European Union (EU) project “Promoting Water Resource Resilience in Latvia: Towards a Drinking Water and Wastewater Strategy.” The aim of the project is to evaluate the water management sector in Latvia and determine what improvements are needed to ensure high-quality and continuous water supply and sewerage services in the long term. Likewise, the project will help ensure compliance with the latest EU requirements regarding drinking water quality and wastewater management.

By September 2026, experts from the Organisation for Economic Co-operation and Development (OECD) will prepare a draft report on the situation of the water management sector in Latvia, including recommendations for its development. The project’s closing event is scheduled for February 2027, when the OECD will present the final report on the management and financing of the water management sector in Latvia, as well as an action plan for implementing the necessary improvements.

Report on the development of green industrial areas in the Baltic Sea region (Report)

Published on March 30, 2026

The Ministry of Smart Administration and Regional Development has prepared a report on the GIA project, the aim of which is to help industrial areas become more environmentally friendly and use resources more efficiently. The report evaluates how the project results could be used in policy at various levels – climate, energy, regional development, and industrial policy. In Latvia, the project results are particularly significant in the Zemgale Planning Region, where the green industrial areas approach was tested and proposals for its integration into development planning documents were developed, promoting regional development and the transition to a climate-neutral economy.

INTELLECTUAL PROPERTY (IP) & INFORMATION TECHNOLOGY (IT) & DATA PROTECTION

Draft legislative acts

Regulations on the inclusion, processing, and supervision of personal data processing in the Central Statistical Bureau’s secure information processing environment (Project ID: 26-TA-449)

The Cabinet of Ministers submitted for public consultation from March 25 to April 11, 2026

The Bureau creates and maintains a unified and secure information processing environment where institutions can analyze merged data. The regulations determine the procedure by which institutions request data processing, obtain access, and how data holders transfer information. Access to the environment is granted only after a careful evaluation of the legal basis, purpose, and necessary scope of data processing; furthermore, the Bureau may refuse access if so stipulated by regulatory acts or data protection requirements. An additional supervision mechanism is provided by the Data State Inspectorate, which performs an audit of personal data processing at least once every three years.

Case law

Video surveillance covering neighboring and public spaces is not proportionate and does not comply with data protection requirements (Case No. A420209224)

Judgment delivered on February 24, 2026

Person A had installed a video surveillance camera on her property. The Data State Inspectorate found that the cameras film not only the applicant’s property but also the neighboring territory and public space, which does not comply with the GDPR requirements for data processing for household or personal needs. The Inspectorate imposed an obligation on the applicant to stop the video surveillance and change the camera angles. The applicant challenged this decision, but the court recognized it as justified, stating that the data processing performed by the applicant is not proportionate and necessary for the protection of her legal interests. The circumstances of the case did not indicate immediate, serious threats to the person’s health or life that could allow for exceptions.

Industry news

The first commentary book on the General Data Protection Regulation (GDPR) in Latvian has been launched (the book can be purchased here)

The book “General Data Protection Regulation. Explanations and Commentaries” was created by a collective of 16 authors under the scientific editorship of Māris Ruķers and Jānis Pleps. The book is nearly 1,000 pages thick and explains EU Regulation 2016/679 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation).

The book consists of two parts. The first part explains the articles of the GDPR, while the second part explains the GDPR in specific cases of personal data processing (video surveillance or data processing for the purpose of preventing money laundering). The book will serve as a significant aid for Associates, data protection specialists, students, and other interested parties who wish to gain an in-depth understanding of the application of the GDPR.

TAXES

Legislative acts

Amendments to the Law “On Tax Application in Free Ports and Special Economic Zones” (Published version)

Announced on April 2, 2026; Enters into force on April 16, 2026

The aim of the amendments is to include Alūksne Municipality in the Latgale SEZ to increase the competitiveness, exports, and productivity of companies in Latvia’s eastern borderland, which is defined as all municipalities of the Latgale Planning Region and Alūksne Municipality, which has a border with Russia.

Draft legislative acts

On the introduction of a solidarity payment for fuel retailers in cases of excessive price increases (Project ID: 26-TA-743)

Adopted at the Cabinet of Ministers meeting on March 31, 2026

The bill “Fuel Retailers Solidarity Payment Law” provides for the introduction of a temporary solidarity payment for fuel retailers in cases where their set retail price significantly exceeds the objectively calculated indicative price (IP).

If the retailer’s actual fuel price exceeds the IP by more than 3% (IP × 1.03), the entire portion of revenue above this threshold is subject to a 100% solidarity payment and directed to the state budget.

The aim of the bill is to limit unjustified fuel price increases, protect consumers, and direct excessive retailer revenues to the state budget to mitigate the negative impact of rising fuel prices and strengthen the security of national supply.

On VAT exemptions for postal services (Project ID: 26-TA-694)

The Cabinet of Ministers submitted for public consultation from March 31 to April 14, 2026

The bill “Amendment to the Value Added Tax Law” provides for an exemption from the application of Value Added Tax for the delivery services of subscribed press publications, which are part of the universal postal service.

The bill is planned to be advanced within the package of accompanying bills for the bill “On the State Budget for 2027 and the Budget Framework for 2027, 2028, and 2029.”

Case law

The court recognized that there are no grounds for the applicant’s liability for the company’s tax debt (Case No. A420262525)

Judgment delivered on March 27, 2026

The applicant appealed to the court for the annulment of the State Revenue Service (SRS) decision, which imposed an obligation on her to compensate the budget for the overdue tax payments of a legal entity. The Administrative District Court granted the applicant’s request, finding that the criterion set out in the Law “On Taxes and Fees” – the amount of overdue tax payments exceeding 50 minimum monthly wages during the applicant’s term of office – had not been met. The court found that during the applicant’s term of office, this criterion had not been met because the decision on additional tax payments entered into force after the end of the applicant’s term of office. Furthermore, the court pointed out that the liquidation of the legal entity before the initial decision was made meant the cancellation of the tax debt, thus making its compensation impossible.

SRS justifiedly excluded non-compliant cash registers from the register (Case No. SKA-95/2026)

Judgment delivered on March 26, 2026

The applicant believed that the State Revenue Service, by first registering and then excluding the cash registers from the register, had caused losses, so she filed a lawsuit asking for compensation for damages. The Senate found that the regional court had correctly rejected the application because the exclusion of cash registers from the register was provided for in a legal norm. Cabinet Regulation No. 96 allows for the exclusion of cash registers from the register if non-compliance with technical requirements is found, regardless of whether they existed at the time of registration or arose later. The applicant’s legitimate expectation regarding an unlawful administrative act is not protected, given her professional qualifications and responsibility. Cash register manufacturers have primary responsibility to produce and distribute only compliant cash registers, and the aim of the state system is to ensure correct tax collection, not to mitigate commercial risks for manufacturers.

The Senate reminds that the term “turnover” in the Covid-19 support regulation is to be interpreted within the meaning of the Law on Annual Reports (Case No. SKA-552/2026)

Decision made on March 24, 2026

The SRS submitted a cassation appeal against the judgment of the Administrative Regional Court, which recognized the SRS decision as unlawful and imposed an obligation on the SRS to grant support for compensating the drop in working capital flow.

The term “turnover” in Cabinet Regulation No. 676 “Regulations on Support for Companies Affected by the Covid-19 Crisis to Ensure Working Capital Flow” is to be interpreted as turnover within the meaning of the Law on Annual Reports, not as the total value of transactions indicated in the value added tax declaration. The Senate found that the regional court had correctly interpreted the term “turnover” specified in the Cabinet Regulation and, given that the SRS cassation appeal did not state new arguments that would require a review of the Senate’s previous case law, refused to initiate cassation proceedings.

Wage subsidy support in the context of the Covid-19 crisis is also due in cases of significantly restricted, not only fully prohibited, economic activity (Case No. SKA-506/2026)

Decision made on March 25, 2026

The State Revenue Service (SRS) submitted a cassation appeal against the judgment of the Administrative Regional Court, by which the Applicant was granted wage subsidy support for November 2021, referring to Cabinet Regulation No. 675 “Regulations on Providing Support to Taxpayers for the Continuation of Their Activities in the Context of the Covid-19 Crisis.” The SRS believed that support was due only if economic activity was fully prohibited, not just restricted. The Senate found that the regional court’s interpretation of “restrictions on economic activity,” which includes cases where activity is not fully prohibited but is significantly restricted, corresponds to the Senate’s practice, and the arguments stated in the SRS cassation appeal are not sufficient to doubt the lawfulness of the judgment.

The solidarity tax portion is not to be included in the calculation of personal income tax (Case No. A420222423)

Judgment delivered on March 25, 2026

The Administrative Regional Court rejected Person A’s application for the annulment of the decision of the Director General of the State Revenue Service (SRS). By the said decision, Person A was assessed personal income tax payable to the budget and late payment interest. The court found that the SRS had justifiedly made corrections to Person A’s income declaration, as the solidarity tax portion transferred to the personal income tax distribution account is not considered personal income tax and is not to be taken into account in its calculation.

Industry news

Lottery and gambling supervision functions are being integrated into the SRS (read more here)

Published on March 27, 2026

Henceforth, the industry supervision and control functions will be performed by two units of the SRS Non-Financial Sector Supervision Department – the Gambling and Lottery Supervision Division will handle licensing, compliance, and legal matters, while the Gambling and Lottery Control Division will perform on-site, remote, technical, and financial control.

Application of VAT norms to payment for saved time (despatch) when providing a service (read more here)

Published on April 1, 2026

LLC “Y” carries out economic activity by providing cargo transshipment services to/from its terminal to/from ships. In this type of economic activity, it is common practice to apply so-called “demurrage” or downtime fees and “despatch” or payment for saved time to the work performed. LLC “Y” turned to the State Revenue Service for clarification on the application of VAT to the “despatch” payment. The State Revenue Service, evaluating the economic essence of the transaction and the terms of the contracts, concluded that the “despatch” payment is directly related to the performance of the service provided and is subject to VAT.

Additional 3% personal income tax rate for foreign income (read more here)

Published on March 27, 2026

The State Revenue Service informs that if annual income in Latvia and/or abroad (or only abroad) exceeds EUR 200,000, an annual income declaration must be submitted and an additional Personal Income Tax (PIT) of 3% must be paid.

PIT calculations in Latvia can be affected by the regulations included in interstate treaties and the type of income received abroad; therefore, the automatic PIT calculation in the annual income tax return within the State Revenue Service’s electronic declaration system may be incorrect. To ensure a correct calculation, documents confirmed by foreign tax authorities must be attached to the declaration; the SRS will verify the data and inform about the actual PIT payable.

SANCTIONS

Draft Legislative Acts

The Court of Justice of the European Union confirms the freezing of funds of five businessmen operating in Russia (Joined Cases No. C-696/23, C-704/23, C-711/23, C-35/24, and C-111/24)

Judgment delivered on March 26, 2026

Since the start of Russia’s war against Ukraine, the Council of the European Union has imposed restrictive measures against leading Russian businessmen involved in economic sectors that provide a substantial source of revenue to the Russian government. Five Russian businessmen subject to these restrictive measures brought actions before the Court of Justice of the European Union. With the delivered judgment, the Court dismisses all appeals.

The Court clarifies that it is specifically the “economic sectors,” rather than the leading businessmen involved in those sectors, that must provide a substantial source of revenue to the Russian government. It is also clarified that the concept of “influence” of businessmen must be understood in light of the economic context in which they operate, regardless of any link they may have with the Russian government. Precisely because these individuals are essential to the Russian economy, they could contribute to the financing of destabilizing actions against Ukraine by helping to maintain those economic sectors.

DISPUTE RESOLUTION

Legislative Acts

Amendments to the Criminal Law (Promulgated version)

Promulgated on April 2, 2026; Enters into force on April 16, 2026

The amendments establish criminal liability for the distribution of intimate materials without the consent of the person shown in the video recording or image. Such regulation is necessary to ensure effective protection of a person’s interests and a state response to harmful actions that will promote the prevention of such offenses.

Case Law

The Senate sets aside the judgment in the part regarding the applied penalty due to insufficient individualization and assessment (Case No. SKK-13/2026)

Decision taken on March 26, 2026

The Senate examined the cassation appeals of the accused and his defense counsel regarding the judgment of the appellate court, by which the person was found guilty of large-scale money laundering and sentenced to imprisonment and confiscation of property. The Senate set aside the judgment of the appellate court in the part regarding the determined penalty and the final penalty, sending the case for re-examination. The Senate recognized that the court had not properly evaluated the principles of sentencing and the personality of the accused. Circumstances significant for applying the penalty—the nature of the criminal offense, the personality of the accused, mitigating or aggravating circumstances—were not evaluated. Additionally, the applied penalty was not properly justified and individualized.

Performance of an installment purchase agreement after the merchant’s removal from the commercial register (Case No. SKC-77/2026)

The Senate delivered the judgment on April 7, 2026

To secure a debt, a company temporarily transferred two vehicles to a creditor for use, agreeing that the company would recover them after the debt was repaid. Before the debt was repaid, a tripartite agreement was concluded between the creditor, the company, and the Claimant, by which the Claimant agreed to pay the said debt on behalf of the company in exchange for acquiring ownership of both vehicles. The agreement stipulated that the vehicles would be officially re-registered in the Claimant’s name after the full amount was paid, but the Claimant acquired the use of the vehicles already after the conclusion of the agreement.

The entire debt was paid on August 19, 2022; however, when attempting to re-register the vehicles in her name, the Claimant received a refusal because the company had already been liquidated and the property was considered as escheated to the state. The SRS considered that the transaction had not been completed until the company’s removal from the commercial register (removed on August 13, 2022). The Claimant brought an action in court against the SRS for the recognition of ownership rights to the vehicles.

Firstly, the Senate recognized that the brought action is not to be qualified as a proprietary action within the meaning of Section 1044 of the Civil Law, as according to the said section, such an action can be brought by the owner against anyone who unlawfully withholds their property. In the specific case, the Claimant has not lost possession of the vehicles, nor has the SRS taken them away from the claimant. The dispute has arisen over the legal recognition of ownership rights.

Secondly, the Senate concludes that it is not the registration of a vehicle in a person’s name that establishes the ownership right to the vehicle, but rather the existence of the ownership right itself is a prerequisite for the vehicle to be registered in the person’s name as the owner. Consequently, the decisive question in the case at hand is whether the Claimant has acquired the ownership right to the vehicles. According to the Latvian civil law framework, for a person to acquire ownership rights to a thing, two prerequisites must be met: the thing must be derived and delivered to the new owner. The concluded tripartite agreement is to be qualified as an installment purchase agreement, the governing civil law norms of which stipulate that the seller may retain the ownership right to the sold thing either so that this right remains with them until the purchase price is fully paid, or so that the ownership right passes back to them if the buyer does not pay. If doubts arise regarding the intention of the parties, it is assumed to be agreed that the ownership right remains with the seller until the purchase price is fully paid. This means that in the case at hand, it was determined that the claimant, by concluding the agreement, acquires the disputed vehicles in her actual possession and acquires the ownership right only upon payment of the entire agreed price. Thus, if the thing is already in the Claimant’s possession, then the payment of the entire purchase price is sufficient for its transfer into her ownership.

Thirdly, the Senate recognizes that the applied norms of the Commercial Law are applicable to such property that still belongs to the company at the moment of its removal from the commercial register. If, by this moment, the ownership right to a specific thing has already passed to another person on the basis of a civil law alienation transaction, such ownership right no longer forms part of the company’s remaining property and therefore the respective thing cannot escheat to the state.

The Senate set aside the previously adopted appellate judgment and sent the case for re-examination, stipulating that upon re-examination, it must be verified, firstly, whether the claimant has paid the purchase price in accordance with the terms of the concluded agreement and, secondly, whether the claimant has acquired the ownership right to the disputed vehicles before the company was removed from the commercial register.

The Senate orders a re-evaluation of the KNAB’s refusal to provide information to an Attorney at Law (Case No. SKA-397/2026)

An Attorney at Law submitted an application wishing to find out how the prosecutor in a criminal case, in which her client is accused, has become acquainted with the materials of operational activities, as well as to receive copies of the relevant documents. The KNAB provided a substantive response to the applicant, stating when such acquaintance took place and the legal norms that allow it. The Administrative District Court terminated the proceedings, stating that the evaluation of the KNAB’s actions is not within the court’s competence. The Senate recognized that the lawyer’s actions are independent requests for information within the meaning of the Freedom of Information Law, and they have a public law character; therefore, they are subject to examination in the administrative court.

Industry News

Riga Regional Court recognizes nearly half a million euros as criminally derived and confiscates it (Available here)

Adopted on April 7, 2026

The Riga Regional Court set aside the decision of the Economic Affairs Court and recognized 441,246.31 euros in a company’s account as criminally derived, confiscating them in favor of the state. The decision was taken in proceedings regarding criminally derived property in connection with a criminal process investigating possible bribery and the laundering of funds obtained as a result, committed by a former high-ranking Ukrainian official who is subject to an international search warrant, using a settlement account in a company under liquidation. Previously, the Economic Affairs Court had terminated the process and lifted the attachment on the money. The Regional Court concluded that the first instance had not taken into account signs of document forgery and other evidence. The Court recognized that there is a sufficient body of indirect evidence regarding the criminal origin of the funds and that the owner of the property has not proven its legality. Therefore, a decision was made to confiscate the money into the state budget.

ECONOMIC CRIMES

Industry News

Warning about fraudulent text messages and calls in the name of the Financial Intelligence Unit (FIU) (read more here)

Cases have been recorded where scammers, posing as FIU employees, inform residents about “caught scammers” and promise to recover the money defrauded from them if the person makes additional payments or transfers.

The FIU itself never sends text messages or calls residents to request money transfers. Furthermore, the FIU does not engage in the “recovery” of individual financial funds and does not request payments for such actions.

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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.