Legislative Review May 22–28, 2026
COMMERCIAL AND CORPORATE LAW
REAL ESTATE AND CONSTRUCTION
ENERGY
– Amendments to the Electricity Market Law aim to improve the legal framework for the operation and decommissioning of wind power plants
– AST initiates work on the Estonia–Latvia electricity interconnector through public consultation
REGULATED LAW
– Amendments to the Road Traffic Law
– eIDAS 2.0 regulation implementation model and the development of the European Digital Identity Wallet in Latvia
BANKING AND FINANCIAL LAW
– Amendments to the Financial Instrument Market Law aim to improve the procedure for electing the audit committee of public interest entities
– On proposals for capital market development and state and municipal capital companies to be advanced for an initial public offering
– On Latvia’s accession to the Bruegel think tank
– Amendments to the Consumer Rights Protection Law
IMMIGRATION
ENVIRONMENTAL LAW
– Updated Environmental SOS app
TAXES
– Opinion of ECJ Advocate General Julianne Kokott on the conditions for abuse of the Parent-Subsidiary Directive
– The largest taxpayers of 2025 solemnly awarded
– SRS published an inquiry “Procedure for applying the natural resource tax to environmentally harmful goods”
– Application of natural resource tax when importing photovoltaic panels into Latvia and exporting them from the territory after decommissioning
– Application of natural resource tax when importing solar panels into Latvia and sending them back to the supplier country after decommissioning
– Within the framework of Latvija.gov.lv modernization, the e-invoicing environment for entrepreneurs has been significantly improved
CUSTOMS
– Agreement reached on the implementation of tariff regulations in transatlantic trade
– In the electronic customs data processing system, customs declarations will now also be able to include non-quoted ECB currencies
DISPUTE RESOLUTION
– Amendments to the Criminal Law aim to strengthen criminal liability in cases where criminal offenses are committed using devices that move in airspace
– A new procedure for the execution of criminal penalties is sought to strengthen public safety
– Amendments to the Law “On Judicial Power” will strengthen the independence of the judiciary
– Amendments to the Administrative Procedure Law extend the deadline for transitioning to case management in the e-case system
– The court recognized that the annual interest rate stipulated in the consumer credit agreement is disproportionate and unfair, therefore contractual interest is not applicable
COMMERCIAL AND CORPORATE LAW
Case Law
The Senate indicates that for board members’ liability for unsubmitted accounting documents, the administrator must specifically prove how the missing documentation affects creditors’ ability to recover debts (Case No. SKC‐38/2026)
Judgment rendered on May 25, 2026.
The case assessed the liability of former board members for not submitting accounting documents of an insolvent company to the administrator and the compensation for related damages.
After the company’s insolvency proceedings were declared in 2020, the administrator found that only a portion of the documents had been submitted. The administrator stated that this prevented a complete understanding of the company’s transactions and financial status in the last three years before insolvency, and also hindered the possibility of filing claims for damages caused to the company. The appellate court jointly recovered more than 60,000 euros from both defendants, concluding that both, as board members, had failed to fulfill their duty to submit full documentation and had thereby caused damages to creditors.
The Senate overturned the judgment of the Riga Regional Court in the part that satisfied the claim for joint recovery of damages from both board members and remanded the case for a new review. The Senate found that the appellate court had not sufficiently evaluated which specific documents were missing, what information the administrator wished to obtain, and how the absence of these documents directly affected the creditors’ position. The Senate emphasized that Article 72.1 of the Insolvency Law is not automatically applicable merely because documents were partially submitted, but the administrator has a duty to analyze the received documents and specifically justify why it is not possible to gain an understanding of the company’s operations with them. At the same time, the Senate acknowledged that the appellate court had not properly assessed whether the missing documents were related to the insolvent company, rather than another legal entity. The Senate also stressed that the court should have evaluated the application of Article 72.1, paragraph four, of the Insolvency Law, considering that one of the board members had been recalled from office more than a year before the declaration of insolvency proceedings. The Senate overturned the appellate court’s judgment regarding the joint recovery of damages and remanded the case for a new review by the appellate court.
REAL ESTATE AND CONSTRUCTION
Case Law
The court recognized that the municipality had reasonably ordered the demolition of a fence and gates illegally built within the street’s red lines, obstructing the use of traffic infrastructure (Case No. A420237024)
Judgment rendered on May 22, 2026.
The Administrative Regional Court rejected person B’s appeal and upheld the Tukums Municipality Council’s decision, which obliged person B to demolish the illegally constructed fence and gates on the property, which crossed the street and its red lines. The court concluded that the fence and gates were built in an area designated for public legal restrictions for traffic infrastructure needs by the territorial plan and encumbrance plan, and that such construction contradicts regulatory acts.
ENERGY
Draft Regulatory Acts
Amendments to the Electricity Market Law aim to improve the legal framework for the operation and decommissioning of wind power plants (Draft Law No. 1371/Lp14)
Submitted to Saeima on May 22, 2026.
The draft law delegates to the Cabinet of Ministers the task of developing operational regulations for wind power plants, which will include requirements for permissible noise levels, the obligation to prevent flicker effect, and will also specify the technical equipment necessary to comply with nature protection, environmental, and safety requirements. Supervision of wind power plant operational requirements will be carried out by the State Environmental Service in accordance with the Law “On Pollution,” using pollution monitoring and control mechanisms. The draft law does not provide for administrative liability for violations of operational requirements. Additionally, the draft law plans to impose an obligation on electricity producers and electricity storage operators to carry out decommissioning after the termination of operation of renewable electricity generation equipment or electricity storage, which means informing the system operator about the disconnection of equipment from the system, the demolition of the equipment itself, and the management of waste generated from demolition.
Industry News
Through public consultation, AST initiates work on the Estonia–Latvia electricity interconnector (AST News)
Latvian transmission system operator JSC “Augstsprieguma tīkls” (AST) has commenced work on the development of the concept for the “Estonia – Latvia 4th Interconnection” energy system security project, which is significant for Kurzeme and all of Latvia. Within the framework of the project, the construction of a submarine electricity transmission interconnection between Saaremaa in Estonia and Ventspils state city or Ventspils municipality in Latvia is planned by 2035. The new interconnection will improve electricity supply security throughout the region, increase the stability of the electricity system, promote efficient electricity market operation in the Baltics, and reduce electricity price differences between the Estonian and Latvian price zones. To inform residents about the project concept, AST is organizing initial public discussions in Ventspils municipality and Ventspils state city on June 2 and 3.
REGULATED LAW
Regulatory Acts
Amendments to the Road Traffic Law (Promulgated Version)
Promulgated on May 22, 2026; Effective June 5, 2026.
The planned changes to the law foresee clarifying the procedure for registration and supervision of special military equipment and its trailers in Latvia. Henceforth, this function will be transferred from the National Armed Forces to the State Defence Logistics and Procurement Centre, which will be responsible for equipment registration, technical control, and evaluation of reconstruction compliance. The law will clarify the definition of special military equipment to clearly distinguish such vehicles from civilian vehicles. At the same time, it is planned to exclude the word “special” from the term “military vehicle,” as the new definition will already cover specially equipped machinery. Trailer terms and usage rules will also be clarified, stipulating that both special military equipment trailers and military vehicle trailers can be used with both types of equipment.
Regulatory Acts
eIDAS 2.0 regulation implementation model and the development of the European Digital Identity Wallet in Latvia (Informative Report)
Adopted at the Cabinet of Ministers meeting on May 26, 2026.
The report provides a comprehensive overview of the objectives and requirements of the eIDAS 2.0 regulation, as well as an assessment of the current situation in Latvia in the field of e-identification and trust services. It analyzes the development of e-identity and e-signature, the existing supervisory procedure for trust and e-identification service providers, and the progress made so far in implementing the national EDIM. The informative report also outlines the planned European Digital Identity Wallet ecosystem in Latvia, including its structure, necessary infrastructure improvements, roles and responsibilities of institutions, as well as the national certification scheme and supervisory procedure.
BANKING AND FINANCIAL LAW
Draft Regulatory Acts
Amendments to the Financial Instrument Market Law aim to improve the procedure for electing the audit committee of public interest entities (Draft Law No. 1370/Lp14)
Submitted to Saeima and referred to committee on May 26, 2026.
The planned amendments to the Financial Instrument Market Law (FITL) foresee improving the procedure for establishing and operating audit committees in public interest entities (PIEs) to reduce administrative burden and costs for companies. The main changes stipulate that the shareholders’ or members’ meeting will henceforth be able to delegate the election of the audit committee to the company’s council, if one has been established. At the same time, it is emphasized that such changes will not affect the independence of the audit committee, as the council acts in the interests of the entire company, not individual shareholders. The amendments also clarify several FITL norms, for example, by excluding outdated references to company controllers and establishing a different voting procedure for the election of the audit committee at the shareholders’ meeting and in the council. If the committee is elected by the council, decisions will be made by a simple majority vote, rather than using cumulative voting.
On proposals for capital market development and state and municipal capital companies to be advanced for an initial public offering (Informative Report)
Adopted at the Cabinet of Ministers meeting on May 26, 2026.
The report evaluates the fulfillment of capital market development goals, the progress of state and municipal capital companies towards an initial public offering (IPO), and offers additional proposals for capital market development. The informative report discusses the benefits for the state from attracting capital or partially divesting state participation in companies, including efficiency improvements, attracting investments, promoting competition, and reducing financial burden. The report includes additional measures for capital market development, including participation in EU initiatives, improving savings and tax regulations, popularizing savings bonds and capital market instruments, strengthening companies’ access to financing, and developing the regulatory framework (including REITs, securitization, investor representative institute, and market infrastructure).
On Latvia’s accession to the Bruegel think tank (Informative Report)
Adopted at the Cabinet of Ministers meeting on May 26, 2026.
Informative report on Latvia’s accession to one of Europe’s most influential economic and public policy think tanks, Bruegel – an independent European economic policy think tank founded in Brussels in 2005, specializing in European and global economics, competitiveness, finance, energy, climate, and geopolitical issues. Membership in the think tank would provide Latvia with access to independent and internationally recognized analytical expertise, as well as the opportunity to collaborate more closely with leading European researchers and policymakers.
Participation in Bruegel would be particularly important in connection with Latvia’s preparations for its presidency of the Council of the EU in the second half of 2028. At the same time, participation in Bruegel would strengthen the involvement of Latvian experts and institutions, including representatives of academia, in shaping European economic policy. Member states also have the opportunity to participate in discussions on the think tank’s strategic priorities and governance processes.
Amendments to the Consumer Rights Protection Law (Project ID: 26-TA-744)
Adopted at the Cabinet of Ministers meeting on May 26, 2026.
The amendments foresee integrating the supervision of non-bank consumer creditors and credit intermediaries into the Bank of Latvia, while strengthening consumer rights protection in the financial services sector. The Bank of Latvia will also henceforth ensure the supervision of unfair commercial practices and advertising regarding services provided by financial market participants.
IMMIGRATION
Case Law
Examination of an asylum application by Greek authorities in 2016 in connection with the EU-Turkey agreement aimed at stopping illegal migration flows (ECtHR case CASE OF J.B. v. GREECE)
Judgment rendered on May 26, 2026.
The application to the European Court of Human Rights (ECtHR) was submitted by a Syrian national who left Syria in April 2015 because he was in danger due to his Armenian origin and Christian faith, and because there was war in the country. He traveled through Lebanon to reach Turkey, where he stayed for about a year, receiving temporary protection status. He arrived on the island of Lesbos and was arrested in Greece on May 7, 2016, for illegal entry into the country. A decision was later issued for his expulsion to Turkey.
The European Court of Human Rights unanimously ruled that there was no violation of Article 13 of the European Convention on Human Rights (right to an effective remedy) in conjunction with Article 3 (prohibition of inhuman or degrading treatment). The Court found that the authorities had carefully examined the person’s asylum application and had considered the circumstances he would face in Turkey and the specific risks he had indicated. During the proceedings, the person had received legal assistance and could challenge the finding that Turkey was a safe third country for him. He had received a detailed response to his arguments, including reports he had submitted to national courts.
ENVIRONMENTAL LAW
Industry News
Updated Environmental SOS app (Environmental SOS)
“Environmental SOS” – a functional and user-friendly mobile application that ensures quick transmission of information to responsible institutions. The app allows for prompt reporting of identified problems, helping to resolve situations that cannot be addressed independently in a timely manner: download the app; photograph the identified problem; add a brief description; send the report.
TAXES
Case Law
ECJ Advocate General Julianne Kokott’s opinion on conditions for abuse of the Parent-Subsidiary Directive (Opinion)
Opinion provided on May 21, 2026.
Advocate General Juliane Kokott of the Court of Justice of the European Union recommended that the ECJ recognize that an exemption from withholding tax under the Parent-Subsidiary Directive may exceptionally be refused even if the direct recipient of the dividends is the beneficial owner and carries out genuine economic activity, if the parent company transfers them to the ultimate recipient through an artificial scheme.
Industry News
The largest taxpayers of 2025 solemnly awarded (SRS: News)
At the solemn award ceremony “Taxpayer of the Year Award 2025,” SRS Director General Baiba Šmite-Roķe presented awards and letters of appreciation – honoring entrepreneurs in all regions of Latvia – in the large, medium, and small enterprise categories, and also expressing gratitude to the most significant exporter and the most responsive SRS cooperation partner.
SRS published an inquiry “Procedure for applying the natural resource tax to environmentally harmful goods” (Inquiry)
The Applicant plans to build a large solar power plant in Latvia. The project envisages that the equipment will be imported from outside the territory of Latvia and used in economic activity for electricity generation. The Applicant requested clarification on whether, in this specific situation, the Applicant is considered the first person in Latvia to use environmentally harmful goods, whether it incurs an obligation to pay natural resource tax, and whether an exemption from it is possible.
The SRS explained that solar panels and inverters are considered environmentally harmful goods, and the applicant in this case is qualified as the primary user in Latvia, thus becoming a natural resource taxpayer. At the same time, the SRS indicated that an exemption from the tax can be applied if appropriate waste management of environmentally harmful goods is ensured – by concluding an agreement with one of the environmentally harmful goods waste managers for participation in the environmentally harmful goods waste management system or by establishing and registering its own management system by registering with the State Environmental Service.
Application of natural resource tax when importing photovoltaic panels into Latvia and exporting them from the territory after decommissioning (SRS: Inquiries)
The Applicant requested clarification from the SRS on whether natural resource tax must be paid for photovoltaic panels imported and installed in Latvia if contracts with suppliers provide for the return and export of decommissioned equipment to the supplier country.
The SRS provided an answer that photovoltaic panels are environmentally harmful goods for which a company that has acquired them in another country and is the first to use them in economic activity in Latvia must pay natural resource tax. At the same time, the SRS indicated that the tax does not have to be paid if the supply contract provides guarantees for the return of the equipment and its export to the supplier country, and the company is registered with the relevant environmental protection authority.
Application of natural resource tax when importing solar panels into Latvia and sending them back to the supplier country after decommissioning (SRS: Inquiries)
The Applicant requested clarification on whether the import of solar panels from China and their use in a solar power plant creates an obligation to pay natural resource tax if the contract provides for their return after the end of use.
The SRS indicated that solar panels are environmentally harmful electrical equipment and their use in economic activity in Latvia is usually subject to natural resource tax, but the tax does not have to be paid if the contract with the supplier ensures the return of decommissioned equipment to the supplier country.
Within the framework of Latvija.gov.lv modernization, the e–invoicing environment for entrepreneurs has been significantly improved (SRS: News)
The SRS informs that within the framework of the modernization of the State Administration Services Portal Latvija.gov.lv, significant improvements have been introduced in the e-invoicing solution, providing entrepreneurs with a more convenient environment for issuing electronic invoices in E-address. As a result of the modernization, the e-invoicing solution on the Latvija.gov.lv portal has been separated from the e-address communication functionality, creating an independent and user-friendly environment for issuing and managing e-invoices. Several other new functionalities have been introduced in the improved solution, including functionality for managing authorizations, considering security and cooperation with accountants or outsourced service providers.
CUSTOMS
Industry News
Agreement reached on the implementation of tariff regulations in transatlantic trade (Council of the EU)
The Council of the European Union and the Parliament have reached a provisional agreement on two regulations aimed at implementing the customs tariff measures envisaged in the EU-US Joint Statement of August 21, 2025.
The first (main) regulation abolishes remaining customs duties on US industrial goods and grants preferential market access, including through tariff rate quotas and reduced tariffs for certain US seafood and non-sensitive agricultural products. The second regulation focuses on extending the suspension of duties for lobster imports, including processed lobster.
In the electronic customs data processing system, customs declarations will now also be able to include non-quoted ECB currencies (SRS: Current Affairs)
From May 27, 2026, when completing a customs declaration in EMDAS, it will be possible to indicate the value of goods not only in foreign currencies for which the ECB publishes a EUR reference rate, but also in non-quoted currencies (e.g., Ukrainian hryvnias, Indian rupees). Changes have been introduced in import (including import customs declarations for postal shipments), export, and transit declarations.
DISPUTE RESOLUTION
Draft Regulatory Acts
Amendments to the Criminal Law aim to strengthen criminal liability in cases where criminal offenses are committed using devices that move in airspace (Draft Law No. 1374/Lp14)
Submitted to Saeima on May 26, 2026.
The draft law foresees establishing a new aggravating circumstance in the Criminal Law – a criminal offense committed using a device that moves in airspace. Such a circumstance would allow the court to impose a harsher penalty even in cases where the specific action is not a direct element of the criminal offense. At the same time, the amendments foresee supplementing several articles of the Criminal Law with a new qualifying feature – committed using a device that moves in airspace.
A new procedure for the execution of criminal penalties is sought to strengthen public safety (Project ID: 25-TA-931)
Adopted at the Cabinet of Ministers meeting on May 26, 2026.
The Law on the Execution of Criminal Penalties will introduce a modern approach to penalty execution with clear principles and values, strengthen public safety, and improve supervision procedures. The draft law particularly emphasizes respect and loyalty to the Latvian state and the state language, Latvian, in the resocialization measures for convicts as a significant prerequisite for their successful integration into society. Therefore, the means of social rehabilitation for convicts have been supplemented with a new measure – activities to promote patriotic education. The draft law also foresees strengthening community-based penalties and establishing new duties for probation clients. The draft law will still need to be reviewed by the Saeima.
Amendments to the Law “On Judicial Power” will strengthen the independence of the judiciary (Project ID: 24-TA-3291)
Adopted at the Cabinet of Ministers meeting on May 26, 2026.
Henceforth, the Council for the Judiciary will decide on the number of judges, the organization of judicial competitions, the nomination of judicial candidates for appointment or approval to district (city) and regional court judge positions, as well as the transfer, replacement, or assignment of judges. In addition, the Council for the Judiciary will gain greater influence in matters of judicial budget and judicial work organization. The draft law grants the Council for the Judiciary the right to appeal to the Constitutional Court if the Saeima does not approve a judge for office.
Amendments to the Administrative Procedure Law extend the deadline for transitioning to case management in the e-case system (Draft Law No. 1353/Lp14)
Submitted to Saeima and referred to committee on May 21, 2026.
To ensure that courts can fully adapt to changes in case management processes within the e-case system, including preparing, uploading, and storing documents related to administrative cases, the draft law extends the deadline from May 31, 2026, to May 31, 2027. After this deadline, these requirements must be strictly observed.
Case Law
The court recognized that the annual interest rate stipulated in the consumer credit agreement is disproportionate and unfair, therefore contractual interest is not applicable (Case No. C69420325)
Judgment rendered on May 21, 2026.
The Plaintiff and the Defendant entered into a credit line agreement, which provided for a credit line amount of EUR 1,500, a maximum repayment period of 36 months, and an annual interest rate of 120% (0.33% per day).
Later, the Plaintiff applied to the court seeking recovery. The Defendant did not acknowledge the claim and stated that the claim was time-barred; however, the court concluded that the statute of limitations was interrupted by the creditor’s warnings and previously submitted applications to the court. The first instance court recovered the principal debt and a portion of the interest, recognizing that the contractual interest rate was disproportionate and did not comply with fair business practices, and therefore reduced the interest to 0.1% per day.
The appellate court emphasized that even if the total cost of credit formally does not exceed the statutory threshold, the court must still assess the proportionality and fairness of the interest rate under the specific circumstances. The court concluded that the 120% annual rate significantly exceeded the average rates applied in the market, created an disproportionate financial benefit for the creditor, and effectively prevented the reduction of the principal amount, even though the defendant had made payments for a long time. The appellate court recognized that an unfair contractual term regarding interest is not applicable at all, and therefore contractual interest should be replaced by the statutory 6% per annum, clarifying that the first instance court had erroneously set a “fair” interest rate itself, instead of completely refusing to apply the unfair contractual term.
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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.