On Thursday, the Saeima supported amendments to the Criminal Code in the final reading, which provide for criminal liability for prohibited agreements in the field of public procurement. The day before, the parliament reported that the bill was to be considered in its third and final reading. ### Individuals will also be held accountable Until now, administrative sanctions for prohibited agreements in procurement could only be applied to legal entities. The new regulation will allow for the criminal prosecution of individuals who directly organize or implement cartel collusion — for example, agreeing on prices or coordinating bids in tenders. Criminal liability is provided for agreements in large-scale procurements. Such cases include procurements with a contractual value of **at least 750,000 euros excluding VAT**, and for construction contracts — **at least 1 million euros excluding VAT**. These thresholds were previously confirmed by the Legal Commission of the Saeima. For a prohibited large-scale agreement, an individual may face **up to three years of imprisonment**, and in cases of collusion directly in public procurement as provided by law — **up to five years**. As an alternative, probation supervision, community service, or fines are provided. The court may also prohibit the individual from holding specific positions or engaging in certain types of business activities for a certain period. ### The first to report a cartel can avoid criminal liability The law includes a mechanism for participants willing to cooperate with the investigation. A person may be exempt from criminal liability if they **voluntarily report the violation first after entering into a prohibited agreement and actively assist in its disclosure and investigation**. ### Why the issue of cartels has become particularly relevant The changes are being made against the backdrop of a legal dispute surrounding one of the largest cartel cases in Latvia. In 2021, the Competition Council (KP), using information gathered by the KNAB, uncovered an alleged cartel of construction companies. According to LETA, its participants were linked to at least **70 procurements with a total value of 687 million euros**. Ten companies were fined a total of approximately **16.65 million euros**. Most of them challenged the decision of the Competition Council. Later, the Supreme Court overturned the decision of the Administrative District Court, which had dismissed the complaints of the construction companies, and sent the case for reconsideration. One of the key issues was the admissibility of using materials obtained through operational activities in administrative cases, including recordings of secretly overheard conversations. The Supreme Court indicated that information obtained during operational activities retains a special legal status and restrictions on its use even after being included in the materials of the criminal case. Thus, the criminalization of cartel agreements in large public procurements changes the very mechanism of liability: individuals involved in organizing collusion can now be subject to criminal prosecution, not just companies facing financial sanctions.
