Procurement Cartels and Individual Criminal Liability in Latvia

Latvia plans to introduce criminal liability for individuals who organise or implement prohibited agreements in procurement procedures. Liability could therefore affect not only the company but also a board member, sales manager, estimator, project manager or another person who has coordinated a bid with competitors.

On 8 September 2026, the Latvian Parliament’s Legal Affairs Committee supported the amendments to the Criminal Law for their third reading. They have not yet been adopted or entered into force. A final vote by the Saeima is still required.

What do the proposed amendments cover?

The proposal would criminalise the organisation or implementation of prohibited agreements in procurements. Potential conduct includes:

coordinating bid prices or other essential bid terms;
agreeing which company should win a procurement;
allocating customers, territories or contracts;
agreeing that one undertaking will not submit a bid;
submitting a coordinated cover bid;
coordinating participation conditions to create only an appearance of competition.

Criminal liability would not automatically apply to every employee, shareholder or board member. The authorities would have to prove the relevant person’s acts, participation and the other elements required for the offence.

Are the new rules already in force?

No. The committee’s decision means that the bills have been prepared for their third reading. They must still be adopted by the Saeima, promulgated and brought into force.

Prohibited agreements are nevertheless already unlawful under the Competition Law. A company may face a substantial administrative fine, exclusion from procurement procedures, civil damages claims and reputational harm.

What do the €750,000 and €1 million thresholds mean?

Under the related bill, a procurement would qualify as being on a large scale where its contract price excluding VAT reaches at least:

€750,000 for supplies or services;
€1 million for a works contract.

These figures refer to the procurement contract price excluding VAT. They do not represent the cartel participant’s profit, the price increase caused by the cartel or the amount of damage proved by the contracting authority.

The thresholds have changed during the legislative process. An initial version referred to €100,000, but that is not the threshold supported by the committee for the current stage.

What penalties are proposed?

Implementation of a prohibited agreement in a large procurement could be punishable by imprisonment for up to three years, probation supervision, community service or a fine. Restrictions on holding particular positions or carrying on business or professional activities may also be imposed.

A stricter provision is contemplated for prohibited agreements in public procurement governed by external legislation. According to the committee’s announcement, this could carry imprisonment for up to five years or another prescribed penalty, together with a possible restriction of rights.

The actual sentence would depend on the proven conduct, the person’s role, the circumstances of the offence and the court’s assessment.

Which individuals could face liability?

A person’s job title alone would not establish liability. Their actual conduct would be decisive.

An investigation could concern persons who:

communicated with competitors about procurement conditions;
coordinated prices, costs, margins or bid content;
instructed others to prepare a cover bid;
agreed not to participate or to allocate procurements;
approved or helped implement the prohibited agreement.

Participation in an industry meeting, the use of a subcontractor or submission of a joint bid does not by itself establish a cartel. The economic justification, necessity and proportionality of the cooperation must be assessed.

Would the company or the individual be punished?

The two forms of liability may operate in parallel.

Under the Competition Law, a company may continue to face an administrative fine of up to 10% of its net turnover for the previous financial year, as well as procurement, civil and reputational consequences.

The Criminal Law amendments are intended to establish personal liability for individuals who organise or implement the agreement. The same circumstances could therefore result in competition proceedings against the undertaking and separate criminal proceedings concerning particular individuals.

Could the first person to report avoid criminal liability?

The proposal provides for the possibility of releasing a person from criminal liability if, after the offence, that person:

is the first to report it voluntarily;
actively assists in detecting and investigating the offence.

This would not be automatic immunity for submitting any report. The reporting sequence, voluntary nature of the disclosure, value of the evidence and actual cooperation would all matter.

The Competition Council’s leniency programme for undertakings and the contemplated release of an individual from criminal liability are related but legally separate mechanisms. Protection obtained in one process should not be assumed to apply automatically in the other.

What should businesses do now?

Review procurement procedures. Define who prepares prices and who may communicate with competitors.
Document independent pricing. Retain calculations, supplier offers and internal decisions.
Control information flows. Future prices, costs, bid strategies and participation decisions must not be disclosed to competitors.
Review joint bids. Consortia and subcontracting arrangements require a genuine and documented business justification.
Train exposed personnel. This includes board members, sales teams, estimators and project managers.
Establish a reporting channel. Employees must know how to escalate an approach from a competitor.
Prepare an incident plan. Potential evidence should be preserved and specialist legal advice obtained immediately.

What should a company do if it discovers a possible cartel?

Emails, messages, price calculations and meeting notes should not be deleted. Concealing evidence may worsen the position of both the company and the people involved.

The company should stop further unauthorised communication, preserve evidence and urgently assess:

what agreement may have existed;
which companies and individuals were involved;
whether the conduct is continuing;
whether the leniency programme may be available;
whether an individual may qualify as the first voluntary reporter.

Frequently asked questions

Can an individual already be prosecuted under the proposed offence?

No. The committee has supported the bills for their third reading, but the final parliamentary vote has not yet taken place.

Would every board member be criminally liable?

No. A position alone is insufficient. The individual’s participation in organising or implementing the agreement would have to be proved.

Does €750,000 refer to the damage caused by the cartel?

No. It is a proposed procurement contract-value threshold excluding VAT. A €1 million threshold is contemplated for works contracts.

Is a joint bid with another company prohibited?

Not necessarily. A joint bid may be lawful where the cooperation is objectively necessary and has a legitimate commercial justification. It must not be used to allocate procurements or markets.

Would the first reporter always avoid punishment?

No. Release would not be automatic. The person would have to report first, do so voluntarily and actively assist the investigation.

Information updated on 9 September 2026. The article discusses bills supported by a parliamentary committee. Their final wording and effective date may still change.