Combating Economic Crimes

Detecting sanctions violations, combating tax evasion and combating money laundering remained priority areas of activity in 2026.

1. Criminal proceedings for sanction violations

In 2026, the criminal proceedings under the jurisdiction of the Tax and Customs Police regarding potential violations of EU-imposed sanctions constituted a significant portion of the agency's overall workload. Considering the police workload and Latvia's priorities, it can be confidently stated that combating EU violations is one of the key issues in Latvia's criminal proceedings in 2026.

Since 2022, the Tax and Customs Police have initiated 637 criminal proceedings for violations of EU-imposed sanctions under Article 84 of the Criminal Law, of which 32 have been referred for prosecution.

Significantly, Latvian law enforcement agencies base their opinions on the compliance of goods with the specified customs code, namely whether the goods are subject to sanctions, on the assessment provided by Latvian customs. In practice, there have been cases where, during the defence, it was proven that Latvian customs had incorrectly identified the code, resulting in the termination of the criminal proceedings.

In conjunction with criminal proceedings concerning the circumvention of sanctions, related proceedings regarding property and the application of coercive measures against legal entities may also occur simultaneously.

Currently, many special proceedings are pending in Latvian courts initiated by the Tax and Customs Police regarding property related to criminal offences (goods subject to sanctions).

In Latvia, the process concerning property obtained through criminal means or property related to a crime is a distinct type of criminal proceeding during which the origin of the property or its connection to the crime (eg, sanctioned goods) and the possibility of confiscation are determined, applying the standard of preponderance of evidence and requiring the owner to prove its lawful origin. In this special process, no determination is made regarding the person's guilt, but solely concerning the property. The "preponderance of evidence" standard is applied (that the property is likely of criminal origin), which is lower than the "beyond a reasonable doubt" standard. The person in possession of the property must prove its lawful origin or that the property is not connected to a crime (eg, not subject to sanctions).

This process can be pursued independently of the outcome of the underlying criminal case on sanctions violations or whether a specific person is held criminally liable. In 2025-2026, in sanctions violation criminal cases, processes concerning property related to a crime became a pressing issue.

In the majority of these special proceedings, goods have been confiscated in favour of the Latvian state. However, there are also cases where it has been proven that Latvian customs either made a mistake in codifying goods or there are reasonable doubts.

2. Administrative liability for sanction violations

Alongside criminal proceedings, administrative offence proceedings concerning violations of international and EU sanctions now constitute a significant and growing part of sanctions enforcement practice in Latvia.

Until recently, Latvia followed a particularly strict, effectively zero-tolerance approach. Persons violating sanctions were subjected to criminal liability irrespective of the seriousness of the conduct or the value of the goods involved. This approach changed following legislative amendments that entered into force on 10 June 2025. The amendments introduced a clearer distinction between criminal offences and administrative violations based primarily on the value and nature of the sanctioned goods or services involved.

Criminal liability generally applies where the value of the sanctioned goods or services reaches or exceeds EUR10,000 and the person purchases, sells or transports the goods across the Latvian border, provides brokerage services, technical assistance or other related services, or otherwise participates in prohibited activities involving such goods or services.

Where the value of the goods or services is below EUR10,000, the conduct may instead give rise to administrative liability. The maximum fine is EUR10,000 for a natural person and EUR30,000 for a legal person. The EUR10,000 threshold does not apply to particularly sensitive categories of goods, including strategically significant goods, firearms and their essential components, ammunition and technologies intended for military use. Violations involving such goods may therefore continue to result in criminal proceedings even where their value is below the general threshold.

The State Revenue Service has also adopted internal penalty-setting guidelines under which the applicable range of administrative fines is determined primarily by the value of the sanctioned goods. Where the value of the goods is between EUR1 and EUR5,000, a legal entity may be fined between EUR10,000 and EUR20,000. Where the value is between EUR5,001 and EUR10,000, the applicable fine for a legal entity ranges from EUR20,005 to EUR30,000. The precise amount is determined on an individual basis, taking into account the circumstances and seriousness of the infringement, as well as mitigating and aggravating factors.

In practice, these cases frequently turn on the same complex issues as criminal sanctions cases. These include the correct customs classification of the goods, their technical characteristics, their actual destination and end use, the applicable exceptions under EU sanctions regulations, and whether the conduct amounts to a prohibited transaction or an attempt to circumvent sanctions.

To strengthen the effective enforcement and recovery of administrative fines, particularly from foreign companies, further amendments to the Customs Law entered into force on 10 July 2026. A person who has failed to pay an administrative fine imposed for a customs or sanctions violation may now be prohibited from carrying out any customs-related activities requiring an EORI number until the fine has been paid.

The restrictions also apply to carriers. A carrier that has failed to pay the relevant fine may be prohibited from transporting goods within Latvia. In practice, this may prevent goods from being released for a customs procedure where the non-compliant carrier carries out the transport.

These measures are expected to significantly improve the enforceability of administrative penalties against foreign declarants, importers, exporters, customs representatives and carriers that would otherwise have limited assets or presence in Latvia. They also create additional compliance risks for their contractual counterparties, whose customs operations may be disrupted due to an unpaid fine attributable to another participant in the supply chain.

3. Coercive measures proceedings

Coercive measures proceedings in criminal proceedings in Latvia is not anything new. However, previously, coercive measures proceedings in sanctions violation criminal cases were not very active. This changed in 2026, and legal entities can face the same legal risks or even more than individuals committing or attempting to commit a crime related to the violation of sanctions. Article 70.2 of the Criminal Law stipulates that the following coercive measures may be imposed on a legal entity: 1) liquidation; 2) restriction of rights; 3) confiscation of property; and 4) recovery of funds.

4. Criminal proceedings against tax evasion

In Latvia, tax evasion and the avoidance of related payments remain pressing issues also in 2026. This is one of the most significant priorities in combating financial and economic crimes in the country. The tax sector is a crucial component of the economy, influencing the financial stability and growth of the state. Taxes are the primary source of state budget revenue; thus, tax evasion poses a threat to the national economy and citizens' well-being, undermining the business environment, as individuals engaging in these criminal activities find themselves in a more favourable position than those who pay taxes honestly. Despite strict criminal liability and prison sentences, in 2026, the number of criminal cases related to tax evasion remains very high.

As for new trends in tax evasion criminal cases, what has changed is that external accountants are increasingly being suspected or accused in criminal proceedings of tax evasion together with business owners. One of the most relevant issues is the extent of the external accountant's liability and the boundaries of their obligation to verify whether a transaction has actually occurred.

When discussing the duties and responsibilities of an external accountant, it is important to note that Latvian law does not stipulate a minimum set of actions that must be performed to prevent holding the external accountant liable for fictitious transactions.

However, based on practice and potential risks, the minimum set of actions that have been discussed and could prevent holding the external accountant liable for fictitious transactions may include the following:

• a written contract with a clear distribution of obligations and responsibilities;
• client identification and understanding of operations in accordance with the requirements of the anti-money laundering law;
• verification of supporting documents for transactions (existence of requisites, absence of obvious discrepancies);
• ensuring traceability of accounting documents received;
• actions in case of suspicion – requesting additional explanations or reporting to special authorities;
• documenting one's actions to be able to prove that the minimum due diligence required by law has been observed.

5. Fight against money laundering

The fight against money laundering remains a constant priority in Latvia also in 2026. These criminal cases in Latvia usually go along with special proceedings concerning unlawfully obtained property.

On March 14 2025, the ruling in case No. 2022-32-01 regarding the regulation of proving the origin of property in a process concerning unlawfully obtained property, which has been separated from the criminal proceedings on the legalisation of unlawfully obtained funds, was deemed compliant with the first sentence of Article 92 of the Constitution. The Constitutional Court concluded that the contested regulation establishes a divided burden of proof regarding the origin of property—the prosecution must provide evidence supporting the assumption of the property's criminal origin. In contrast, the person associated with the property must provide evidence that the property's origin is lawful. Furthermore, the person associated with the property is afforded sufficient procedural guarantees to prove the property's lawful origin. Therefore, the contested regulation ensures a fair balance between the principle of equal opportunity for the parties and society's interest in effectively confiscating unlawfully obtained property. As mentioned above in relation to the  Constitutional Court’s decision, many criminal proceedings on the legalisation of unlawfully obtained funds were continued as well as newly initiated in 2026.

6. Crypto-assets in money laundering cases

Crypto-assets are becoming an increasingly prominent feature of Latvian economic crime investigations and related court proceedings. They are no longer treated as an exceptional or purely technical form of property. Still, they are routinely examined as potential instruments, proceeds or objects of fraud, money laundering and other economic offences.

Latvian investigative authorities have significantly strengthened their capacity to trace, identify, freeze and seize crypto-assets. Available data illustrates the rapid growth of this practice: the value of virtual currencies subject to seizure in Latvian criminal proceedings increased from approximately EUR1.6 million in 2022 to approximately EUR2.5 million in 2024.

Recent cases further demonstrate the increasing significance of crypto-assets in economic crime litigation. In 2026, a criminal case was referred to the Economic Court concerning the alleged laundering of virtual currency valued at approximately EUR1.5 million. The alleged scheme involved accounts opened with crypto-asset platforms using third-party identities, transfers between virtual currency wallets and the subsequent conversion of the assets into cash. The case is particularly notable as an example of standalone money laundering, where the precise predicate offence generating the assets had not been identified.

Crypto-assets are also increasingly encountered in large-scale fraud investigations. Latvian law enforcement authorities have identified illegal crypto-asset exchangers acting as intermediaries between fraud networks, money mules and the crypto-asset market. Such persons facilitate the conversion of criminal proceeds into crypto-assets and their subsequent transfer through multiple wallets or platforms.

As a result, economic crime proceedings increasingly involve disputes concerning the identification of the person controlling a wallet, the evidential value of blockchain analysis, the lawful origin of crypto-assets, their valuation at the time of seizure, and the procedural requirements for freezing and confiscating assets held through foreign crypto-asset service providers.

The cross-border nature of crypto-assets remains a particular challenge. Effective seizure and recovery frequently require cooperation with foreign investigative authorities, crypto exchanges and wallet service providers. Accordingly, disputes concerning the freezing, seizure, management and eventual confiscation of crypto-assets are expected to become a more regular and technically complex area of Latvian economic crime litigation.

7. Fight against cyber-enabled economic crimes

Cybercrime and cyber-enabled fraud have become an increasingly prominent area of economic crime enforcement in Latvia. This trend is reflected not only in the growing number of cyber incidents, but also in the increasing scale, sophistication and complexity of criminal investigations involving digital technologies.

Recent investigations have focused on fraudulent call centres, false investment schemes, the use of remote-access software to gain control over victims’ bank accounts, networks of money mules and the conversion of criminal proceeds through illegal crypto-asset exchangers.

These offences are increasingly organised and cross-border in nature. Latvian authorities therefore regularly cooperate with foreign law enforcement agencies, Eurojust and crypto-asset service providers to identify perpetrators, obtain electronic evidence, trace financial flows and secure assets held in other jurisdictions.

As a result, cyber-enabled economic crime is expected to generate increasingly complex litigation. Key issues are likely to include the attribution of digital conduct to particular individuals, the admissibility and reliability of electronic and blockchain evidence, access to data stored abroad, the seizure of electronic devices and crypto-assets, and the distinction between participants in organised fraud schemes and persons who allowed their accounts to be used as money mules.