Today, on October 11th, Māris Butāns, FICIL’s work group leader on Fair Competition & Public Procurement, participated in a discussion regarding the introduction of criminal liability for companies engaging in prohibited agreements, especially in public procurement. It was organized by the Corruption Prevention and Combating Bureau (KNAB) in cooperation with the non-governmental organization “Transparency International Latvia – Delna”. 

During the discussion, the need to introduce criminal liability for bid rigging activities was emphasized, as administrative penalties alone are insufficient to deter such violations. Māris Butāns stressed that foreign investors always advocate for fair competition rules to ensure efficient use of the state budget and could share good business practices from other countries. He indicated that in most EU countries, bid rigging in public procurement are considered serious crimes, and criminal liability is imposed. The foreign investors expect a similar approach in Latvia. However, currently, such violations are mainly addressed through administrative penalties, which do not foster fair market competition. 

Moreover, Māris mentioned that the size of the shadow economy in Latvia shocks the foreign investors, who are among the largest taxpayers in the country. FICIL has always stressed the need for strict monitoring of tax payments and appropriate penalties for bid rigging. The foreign investors expect zero tolerance toward bid rigging and cartels, but it is often local companies involved in these violations, which hinders fair competition. In conclusion, Māris stated that the introduction of criminal liability for bid rigging would send a strong signal about the importance of law enforcement and promote a culture of fair competition in Latvia. 

The following discussion focused on previous attempts to address the fair competition issues, but the government has yet to promote the necessary amendments. Several participants of the discussion remarked that price increases due to cartels harm consumers, and the introduction of criminal liability would be an important step in curbing such practices. At the end of the discussion, the organizations agreed that further research is needed, and the risks associated with introducing criminal liability should be carefully evaluated to prevent the misuse of this tool against honest companies.