Legislative Review March 13–19, 2026
COMMERCIAL AND CORPORATE LAW
REAL ESTATE AND CONSTRUCTION
– Amendments to Cabinet Regulation No. 500 “General Construction Regulations”
– Amendments to Cabinet Regulation No. 156 “Procedures for Market Surveillance of Construction Products”
ENERGY
– Amendments to Cabinet Regulation No. 443 on EU Recovery Fund investments in improving energy efficiency in state buildings
– Amendment to Cabinet Regulation No. 155 on the support program for greening business, use of renewable energy resources, and increasing energy efficiency
LABOR LAW
REGULATED INDUSTRIES
– Amendments to the Electronic Communications Law
– Amendments to the Law “On Regulators of Public Utilities”
BANKING AND FINANCE LAW
ENVIRONMENTAL LAW
– Amendments to the Criminal Law and amendments to the Law “On the Procedures for the Coming into Force and Application of the Criminal Law” adopted for the implementation of the EU Directive
– Amendment to the Law “On Pollution”
TAXES
– Determination of tax residence status does not create legal consequences of a final nature
DISPUTE RESOLUTION
– Expanded competence of the Economic Affairs Court in civil cases
– Amendments to the Criminal Procedure Law
– New Civil Procedure instruments for protection against unfounded and malicious claims against persons involved in public participation
– In the case regarding the actions of an estate trustee, the true will of the deceased must be ascertained
COMMERCIAL AND CORPORATE LAW
Case Law
The Senate recognized that the court erroneously declared insolvency proceedings, ignoring an existing dispute over obligations (Case No. SPC – 6/2026)
Judgment delivered on March 17, 2026
The Prosecutor General submitted a protest against the judgment by which the Company’s insolvency process was declared, stating that the court had erroneously declared it because it had not looked at the existing dispute regarding the obligation, which is being resolved through adversary proceedings.
The Senate recognized that the arguments stated in the protest are justified and decided to annul the contested judgment and remit the case for a new hearing. The Senate concluded that signs of an insolvency process cannot be established if there is a dispute regarding the validity of the obligation, which is being resolved through adversary proceedings. The Civil Procedure Law provides that the existence of a dispute is grounds for rejecting an insolvency application; thus, the Senate recognized that the court committed significant violations of procedural law norms, which could have led to an incorrect adjudication of the case.
REAL ESTATE AND CONSTRUCTION
Draft Legislative Acts
Amendments to Cabinet Regulation No. 500 “General Construction Regulations” (Project ID: 25-TA-1415)
Adopted at the Cabinet meeting on March 17, 2026
It is clarified that an author supervisor, construction supervisor, or construction expert cannot be in an employment relationship with the contractor over whom they exercise control or supervision, except in cases of combined design and construction contracts. To timely prevent fire safety solution errors, which until now were often discovered only before the building was commissioned, causing additional costs and delays, a new specialty has been introduced at the design stage – fire safety construction specialist, who will be responsible for the building’s compliance with fire safety requirements. A new position is also being introduced – deputy responsible construction manager.
Henceforth, when building new buildings with state, local government, or European Union fund resources, construction initiators will have to use environmentally friendly, CO₂-sequestering materials. The design task will have to specify which CO₂-sequestering materials and in what volume to use in structures, finishing, or other solutions. To reduce health risks for employees, the duties of the main contractor in complying with labor protection requirements when performing work with asbestos-containing materials are also established.
Amendments to Cabinet Regulation No. 156 “Procedures for Market Surveillance of Construction Products” (Project ID: 26-TA-340)
Submitted for public consultation March 13, 2026–March 27, 2026
Initially, the regulations were developed based on Regulation (EU) 305/2011, which has already been replaced by the new Regulation (EU) 2024/3110, introducing a new legal framework for construction products in the EU and providing for a gradual transition from the current framework to a new system. The existing national regulation does not reflect this situation, as it does not include references to the new Regulation and does not establish market surveillance procedures for cases where construction products are regulated under the new regulation.
The amendments clearly establish the rights and obligations of market surveillance authorities in both regulatory regimes, including regarding the request for information and documentation, conformity assessment, sampling and expertise, as well as the submission of documents in the official state language. Thus, legal clarity, continuous performance of market surveillance functions, and compliance with European Union law are ensured until the full transition to the framework of the new regulation.
ENERGY
Draft Legislative Acts
Amendments to Cabinet Regulation No. 443 on EU Recovery Fund investments in improving energy efficiency in state buildings (Project ID: 26-TA-20)
Adopted at the Cabinet meeting on March 17, 2026
The amendments clarify deadlines, energy saving targets, and eligible costs, as well as the procedure for supervision and data submission. Additionally, the specific reference to historical buildings is removed from the title of the regulations.
Amendment to Cabinet Regulation No. 155 on the support program for greening business, use of renewable energy resources, and increasing energy efficiency (Project ID: 26-TA488)
Submitted for public consultation from March 13, 2026–March 27, 2026
To ensure territorial balance within the framework of regional policy, it was concluded that support primarily needs to be provided to territories outside Riga, in the Vidzeme region (Saulkrasti municipality, Limbaži municipality, and Ogre municipality) and the Kurzeme region (Tukums municipality), promoting business activity in less developed territories.
LABOR LAW
Case Law
The court recognizes that a different benefit amount for part-time and full-time employees is objectively justified and lawful (Case No. AA43-0237-26)
Adopted on March 16, 2026
The Director of the State Labour Inspectorate, by decision, imposed an obligation on the Company to ensure an equal benefit amount for employees working part-time and those working normal working hours. The Company submitted an application to the court for the annulment of this decision. The court recognized that differentiating the benefit depending on the workload is justified and complies with legal norms. The same rules apply to part-time employees as to full-time employees, unless there is an objective basis for different treatment. The court recognized that differentiating the benefit is objectively justified because it promotes employees’ desire to work full-time and improves the quality of healthcare services.
REGULATED INDUSTRIES
Legislative Acts
Amendments to the Electronic Communications Law (Promulgated version)
Promulgated on March 19, 2026; Enters into force on April 2, 2026
The amendments introduce an obligation for merchants to process location data to more effectively prevent fraudulent calls, especially in cases where Latvian numbering is used from abroad. An opportunity for information exchange between operators is provided, thereby strengthening fraud-fighting mechanisms.
In cases where a communications network is installed or modernized on state or local government property already connected to the public network, construction is included in the local government planning, or network relocation occurs within the boundaries of a protection zone, it will only be necessary to inform the real estate owner instead of the previous coordination procedure. Also, in joint properties, the consent of the majority will henceforth suffice, instead of the previous 100%.
The amendments clarify the responsibility for the relocation of electronic communications networks, determining that the distribution of costs depends on the reason for relocation. Additionally, it is established that indoor mobile communication coverage must be provided in new buildings and significantly reconstructed buildings. The law strengthens national security by granting certain institutions the right to use technical means to jam undesirable radio communications, including drones. At the same time, merchants are obliged to inform the regulator about agreements with landowners, promoting transparency and price formation in accordance with market principles.
Amendments to the Law “On Regulators of Public Utilities” (Promulgated version)
Promulgated on March 20, 2026; Enters into force on April 3, 2026
The amendments provide for the regulator to establish a consultative council, which includes several ministries, the Competition Council, the Consumer Rights Protection Centre, as well as representatives of consumers, merchants, local governments, and social partners, to improve the quality of decisions and involve a wider range of interests in the regulation process. To reduce bureaucracy, it is established that if a merchant determines the tariff themselves and it complies with legislative acts, the regulator does not issue a written administrative act, but only makes a decision and publishes a notice; however, if the tariff does not meet the requirements, the regulator issues a full administrative act. Henceforth, all decisions or notices must be published in the official gazette Latvijas Vēstnesis.
BANKING AND FINANCE LAW
Case Law
CJEU: 50% ownership of shares by a sanctioned person allows the company’s funds to be considered under their control and subject to freezing (Case C-84/24)
Judgment delivered on March 12, 2026
2020. In December of the year, the EU Council included a Belarusian citizen in the list of persons subject to EU sanctions (freezing of all funds associated with the sanctioned person). Later, two Lithuanian banks froze funds for a company registered in Lithuania that was not subject to sanctions, but in which 50% of the shares belonged to the said person. The company went to court, but both the first and appellate instances rejected the claim, stating that one of the criteria to be considered according to EU guidelines to determine whether a legal person is controlled by another person is that they have the right or power to appoint or remove the majority of the members of the legal person’s administrative, management, or supervisory bodies. Since the relevant sanctioned person owned 50% of the company’s capital, it was concluded that they were able to control the company and its funds.
The company brought a claim to the Supreme Court, which in turn turned to the CJEU asking whether, if it is established that a person mentioned in the list of sanctioned persons owns exactly 50% of the company’s shares, it is assumed that the company’s funds are in the ownership, possession, or control of the person subject to sanctions.
The CJEU explained that dominant influence can also exist with a smaller participation, but 50% of shares usually provide the opportunity to significantly influence the company’s decisions. Therefore, in such a case, it is considered that the company’s funds are under the control of the sanctioned person and they must be frozen to achieve the objective of the sanctions. At the same time, the CJEU emphasized that member states must ensure that persons who are not included in the list of sanctioned persons, but whose funds or economic resources are frozen because it is assumed they are in the possession or control of a person included in the list, have the opportunity to contest the freezing of funds and achieve its annulment, provided they prove that these funds are not actually in the possession or control of a person included in the said list.
ENVIRONMENTAL LAW
Draft Legislative Acts
Amendment to the Law “On Pollution” (Draft Law No. 1222/Lp14)
Adopted in the 2nd reading on March 19, 2026
The local government, for the protection of people against undesirable or harmful noise, will be able to issue binding regulations providing for the issuance of permits for events or entertainment that would create noise, requirements and procedures for the use of sound-amplifying equipment, as well as requirements and supervision conditions regarding sound insulation.
Amendments to the Criminal Law (Project ID: 25-TA-2349) and amendments to the Law “On the Procedures for the Coming into Force and Application of the Criminal Law” (Project ID: 25-TA-2351) adopted for the implementation of the EU Directive
Adopted at the meeting of State Secretaries of the Cabinet on March 12, 2026
The draft laws were developed to implement Directive (EU) 2024/1203, which provides rules on the protection of the environment through criminal law. The amendments to the Criminal Law provide for penalties corresponding to the Directive for criminal offenses committed against the natural environment, as well as clarify the actions for which criminal liability is provided and actions that are considered a criminal offense if they have caused significant harm. The amendments to the Law “On the Procedures for the Coming into Force and Application of the Criminal Law” provide for clarifying the criteria and cases when a criminal offense against the environment is recognized as having caused significant harm.
TAXES
Case Law
Determination of tax residence status does not create legal consequences of a final nature (Case No. A420162425)
Decision made on March 12, 2026
The Department of Administrative Cases assessed whether the decision of the State Revenue Service regarding the determination of a natural person’s tax residence status is an administrative act and whether it is independently appealable in court. The applicant had requested to be recognized as a non-resident for specific past periods, but the court of first instance terminated the proceedings, concluding that such a decision does not create legal consequences of a final nature.
The Senate recognized that tax residence status in itself does not create legal consequences within the meaning of the Administrative Procedure Law. Legal consequences arise only with specific decisions of the State Revenue Service, for example, regarding tax calculation or the determination of obligations. Consequently, a decision by which non-resident status is refused is also not considered an administrative act and is not independently appealable, regardless of whether the status is assessed for the future or a past period.
The Senate also emphasized that possible consequences arising from residence status (for example, obligations to submit declarations or other obligations provided for in legislative acts) do not in themselves create legal consequences of a final nature. The question of a person’s residence status can be verified in court only in the context of a specific administrative act that directly affects the person’s rights or obligations.
DISPUTE RESOLUTION
Legislative Acts
Expanded competence of the Economic Affairs Court in civil cases (Promulgated version)
Promulgated on March 13, 2026; Enters into force on April 1, 2026
With the amendments to the Civil Procedure Law, additional cases have been established where the Economic Affairs Court hears cases as a court of first instance. Additionally, the transitional provisions have been amended, determining which of the court’s new competences enter into force together with the coming into force of the amendments and which from August 31, 2029.
Amendments to the Criminal Procedure Law (Promulgated version)
Promulgated on March 13, 2026; Enters into force on April 1, 2026
With the amendments to the Criminal Procedure Law, rules regarding the competence of the Economic Affairs Court to hear criminal cases have been regulated, and a new article has been introduced in the law that will regulate the specifics of questioning an official of a national security institution.
Draft Legislative Acts
New Civil Procedure instruments for protection against unfounded and malicious claims against persons involved in public participation (Draft Law No. 1187/Lp14)
Considered in the 2nd reading on March 19, 2026; Awaiting proposals until March 26, 2026
The draft law “Amendments to the Civil Procedure Law” was developed with the aim of implementing EU Directive 2024/1069 on the protection of persons involved in public participation against manifestly unfounded claims or abusive court proceedings. The amendments aim to introduce procedural instruments that will help the court identify claims that are manifestly unfounded or brought for malicious purposes, as well as to terminate already initiated cases as quickly as possible. Additionally, it is planned to establish an obligation for the plaintiff, upon the defendant’s application, to pay security for the coverage of legal costs, as well as to establish that in the decision by which the case is adjudicated, the claim is left without consideration, or the proceedings are terminated, the court, upon the defendant’s application or its own initiative, may impose an obligation on the plaintiff to fully cover all expenses incurred by the court. Also, the amounts of fines for procedural violations will be clarified.
Case Law
In the case regarding the actions of an estate trustee, the true will of the deceased must be ascertained (Case No. SKC-154/2026)
Judgment delivered on March 11, 2026
The heirs turned to the court against the former estate trustee and the tenant of the real estate included in the estate to recognize the residential premises lease agreement concluded by the defendants as simulative and invalid due to its disproportionately low rent, as well as to recover compensation for losses from the defendants.
Having assessed the circumstances of the case, the Senate found that the lower instance court had considered the entire amount of the claim brought as lost profit for the plaintiffs, although in fact the claim was structured such that it requested the defendant to be ordered to pay both the payments received for the benefit of the estate as compensation for the use of the property and the difference between the actual rent and the rent corresponding to the market situation. Given that the circumstances to be proven differ in both cases, the court had to verify whether the trustee had actually received compensation from the tenant and handed it over to the heirs when they accepted the inheritance. Also, the court did not ascertain what the deceased’s will had been regarding the leasing of the residential premises to the tenant, given that the relevant premises had been leased to her during the deceased’s lifetime.
The Senate reminded that in inheritance law there is a principle – to ascertain and respect the true will of the deceased as far as possible; therefore, when providing an assessment of the estate trustee’s actions, it was not necessary to assess the compliance of the rent with the market situation, but to ensure whether the estate trustee had properly fulfilled the expression of will and preserved the inheritance in a condition no worse than it was at the time of the opening of the inheritance. Finally, the court, when calculating the amount of lost profit, contrary to the findings of the Senate’s case law, did not take into account the expenses incurred by the defendant related to the real estate. In view of the above, the judgment of the regional court is to be annulled and the case remitted for a new hearing.
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PARTNER, ATTORNEY AT LAW
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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.
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