What changes when Latvia treats cartel formation in major public procurements as a potential criminal offence rather than only an administrative violation?
Individuals can now face criminal proceedings
Latvia’s Saeima approved amendments to the Criminal Law at their final reading, creating criminal liability for prohibited agreements in public procurement, commonly known as cartels. Until now, administrative penalties for such agreements could be imposed only on legal persons. The amendments extend potential liability to the people who organise or carry out the conduct in practice, including agreeing prices or coordinating bids. The change is significant for companies and their staff because responsibility will no longer be confined to the corporate entity when the statutory conditions for a criminal case are met.
The law targets coordinated bidding
A procurement cartel is an arrangement between competing bidders that replaces independent tendering with coordination. In the examples given in the amendments, firms or individuals may agree prices or align their offers instead of deciding independently what to submit. For a natural person, a prohibited agreement made in a large procurement can carry imprisonment of up to three years. Where the prohibited agreement concerns a public procurement, imprisonment of up to five years is provided for. Alternative sanctions include probation supervision, community service or a fine, while an additional penalty could bar a person from holding certain positions or conducting specified business activities for a period.
Thresholds and evidence remain central
The related amendments on applying the Criminal Law define a large procurement by contract value: at least €750,000 excluding VAT, or €1 million excluding VAT for a works contract. The reform also offers a cooperation route: a person may be released from criminal liability if, after the prohibited agreement has been made, they are the first to report it voluntarily and actively assist its detection and investigation. The change follows a contested enforcement setting. Latvia’s Supreme Court sent a construction-cartel case back for rehearing, saying secretly recorded conversations obtained through an operational measure had been used beyond the legal purposes for which such information could be collected and shared.
IN NUMBERS
The amendments make individual accountability a new feature of Latvia’s response to procurement cartels, while retaining a distinction between corporate administrative penalties and criminal cases against people. Their practical importance will depend on how investigators and courts apply the thresholds, cooperation provision and evidence rules. The related construction case remains subject to a new hearing, so the court’s concerns about the use of operational information are not resolved by the parliamentary vote alone.
Reported from pmo.ee, 2026-09-24. The Tender Wire is published by Otnox.
