Latvia Makes Bid Rigging in Large Public Tenders a Crime

A Latvian company caught fixing bids with a competitor faces a fine from the Competition Council, but Latvian law has had no cartel offence for the managers who made the deal. On 24 September the Saeima adopted, by 68 votes to 12, amendments to the Criminal Law that change that from 15 October 2026. A person who organises or carries out a prohibited agreement in a public procurement worth at least €750,000 excluding VAT, or €1 million for construction works, will face up to five years in prison.

The change follows a Supreme Court ruling that threw out the evidence in Latvia's largest cartel case.

Quick answer: the new offence targets individuals in large tenders. A prohibited agreement with a competitor, whether coordinating an offer, agreeing not to bid or agreeing on participation terms, becomes a crime for the people involved once the contract value reaches the thresholds.

Companies stay under the Competition Council's administrative regime, and coordination below the thresholds remains prohibited under competition law as before. The first person to report an agreement voluntarily and help the investigation may be released from criminal liability.

The new law in five numbers

• €750,000 excluding VAT is the contract value from which a prohibited agreement in a goods or services tender becomes a crime; €1 million for construction works
• 5 years is the maximum prison term for the offence in a public procurement, with a mandatory 2 to 5 year ban on specified business, occupations or positions; 3 years for the general large-scale offence
• 15 October 2026 is the date the law takes effect
• 68 to 12 was the final vote on 24 September
• €687 million was the contract value of the procurements that ended in a contract award among the 70 or more the Competition Council identified in the 2021 construction cartel, fined €16.65 million

What was adopted

The new Article 211.1 of the Criminal Law covers prohibited agreements in a large-scale procurement that take one of three forms: coordinating an application or offer on any essential condition with another market participant before submission, agreeing with another participant not to submit one, and agreeing on the conditions of participation.

The general offence carries up to three years in prison. If it is committed in a public procurement, the maximum is five years. Lesser sentences such as probation or a fine are possible, and in every case the court must also ban the person from certain business, work or positions, for up to three years under the general offence and for two to five years in the public-procurement case.

Article 211.2 says a person "may be released from criminal liability" if they are the first to report the agreement voluntarily and actively help to uncover and investigate it. The new offence applies to people, not companies; companies stay under the Competition Law.

A companion amendment to the law on the Criminal Law's application fixes "large scale" at a contract price of not less than €750,000 excluding VAT, or €1 million for construction contracts. The Legal Affairs Committee added the entry-into-force date of 15 October 2026, and the Saeima accepted it without a vote before adopting the law.

Why now

The Competition Council says the amendments were drafted after the Supreme Court Senate's judgment in the construction cartel case. In 2021 the Council, using information from the anti-corruption bureau KNAB, had found that ten construction companies met at least three times a year from 2015 to 2018 to divide tenders between two groups.

It identified at least 70 of the nearly 90 procurements discussed, most of which ended in a contract award, for a total contract value of about €687 million, and fined the companies €16.65 million.

The Supreme Court overturned the Administrative Regional Court's judgment upholding that decision and sent the case back. It held that secretly recorded conversations gathered in KNAB's operational activities could not be used to prove a competition infringement, because detecting a cartel is not among the purposes for which such surveillance is allowed, and because the legislature had "repeatedly and deliberately" declined to criminalise prohibited agreements.

The ruling renewed pressure for a criminal offence. The Prosecutor's Office had proposed an Article 211.1 in May 2023; the Saeima rejected it in September 2024; in January 2026 the prime minister said parliament had to return to the question and the New Unity faction resubmitted its bill. The Greens and Farmers Union said then that it did not support criminal liability for company employees in cartels.

How the threshold moved

The bill passed its first reading on 19 February with criminal liability from a contract price of €100,000. At the second reading on 4 June the Saeima adopted an amendment by Gunārs Kūtris of the Greens and Farmers Union replacing that with €3 million, by 47 votes to 10 with 21 abstentions; the rapporteur, Andrejs Judins, told the chamber that everyone agreed €100,000 was too low.

For the third reading the Legal Affairs Committee rejected a proposal for €500,000 and drafted the compromise of €750,000 for goods and services and €1 million for works, which the Saeima adopted on 24 September.

Māris Spička, head of the Competition Council's executive body, said in the Council's statement that cartels in public procurement make goods and services more expensive and prevent limited public funds from being spent on more important needs, so that severe sanctions are an essential deterrent. He added that the new rules "will create challenges for much closer and more coordinated cooperation between law-enforcement authorities and the Competition Council".

What is still open

A separate bill amending the Competition Law would let the Council restrict company officials from holding management positions for one to three years. It passed its second reading on 11 June; a proposal to add fines of up to €30,000 for individuals was rejected at that reading, by 32 votes to 20 with 34 abstentions, and the bill still needs a final reading. The construction cartel case itself is back before the Administrative Regional Court. How a criminal investigation and an administrative case over the same tender will run side by side after 15 October is not reported.

What to do now

• Bidding at €750,000 excluding VAT or more in Latvia, or €1 million in construction, from 15 October 2026? Brief the people who prepare the offer that prohibited coordination with a competitor becomes a personal criminal matter as well as a company fine.
• Planning a consortium or subcontracting arrangement with a competitor? Check that it has an objective justification, such as capacity or qualification the partners lack alone, that it stays within the competition rules, and record the assessment before the tender.
• Involved in prohibited coordination that continues past 15 October 2026? The new offence applies to conduct from that date. Under the new provision only the first person to report and actively cooperate may be released from criminal liability, and the decision is not automatic.

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