On Thursday, 14 March, the Saeima adopted amendments to the Criminal Law and the Criminal Procedure Law in order to improve the provisions on applying coercive measures to legal entities. The draft laws containing amendments proposed by the Legal Affairs Committee of the Saeima were deemed urgent and adopted in the plenary in two readings.

The authors of the amendments noted that many crimes related to the environment and taxes are committed in the interest of legal entities and for the benefit of the owners of enterprises; however, only the natural persons who actually commit the crime while acting in the interests of legal entities are the ones held liable.

The new procedural provisions are aimed at solving the problems identified by practitioners because they will enable separating legal action against a natural person and legal action against a legal entity, as well as applying coercive measures to an enterprise also in circumstances when a natural person has not yet been convicted.

Furthermore, in practice there are occasions when the representative of a legal entity prefers to end the legal action as soon as possible without the case being considered in courts of any instance where appeals can be submitted by natural persons. Legal entities are willing to compensate damages and be punished as soon as possible in order to stop the name of their enterprise from being used in connection with a crime and to salvage their reputation, undertake necessary anti-corruption measures and continue business.

Although provisions on applying coercive measures to legal entities have been set forth in laws for eight years already, so far the legal framework has proved to be ineffective, and these provisions have almost never been applied in practice. During this period, 13 relevant criminal charges have been brought against perpetrators, but coercive measures have been applied to a legal entity only once.

Coercive measures that can be applied to a legal entity include closure, limitation of rights, confiscation of property or a monetary fine. The amendments to the Criminal Law will enable simultaneous application of the latter three measures. The maximum monetary fine will be increased significantly: Depending on the severity of the crime and the financial status of the legal entity, it will be set in the amount from ten to a hundred thousand times the minimum monthly salary. Currently the monetary fine is set in the amount from one to ten thousand times the minimum monthly salary.

Mārtiņš Lazdovskis, State Secretary of the Ministry of Justice, stated earlier that streamlining the legal framework pertinent to this matter is a prerequisite for Latvia to be able to join the Organisation for Economic Cooperation and Development (OECD).

The amendments to the Criminal Law and the Criminal Procedure Law will come into force on 1 April this year.

Saeima Press Service