The Ministry of Economics (MoE) has received a notification from the European Commission (EC) on the initiation of an infringement procedure related to the implementation of the Modernisation Directive in Latvia and is conducting an in-depth review of the EC’s position and reasoning. At the same time, the MoE is assessing it cautiously, as it considers that, in substance, the requirements of the Directive have been implemented.
The MoE received the official letter on the initiation of the infringement procedure related to the implementation of the Modernisation Directive on 11 December. The EC indicates that Latvian legislation lacks a clear reference to penalty sanctions arising from the Unfair Contract Terms Directive, the Price Indication Directive, and the Consumer Rights Directive. The MoE maintains regular dialogue with the EC in order to continue close and constructive cooperation and to reach a solution acceptable to all parties regarding the transposition of EU requirements into the national legal system.
The MoE has begun an in-depth assessment of the EC’s position; however, a detailed stance and information on further steps will be prepared by early February 2026, when a draft position must be submitted to the Cabinet of Ministers.
Since directives, unlike regulations, set objectives that EU Member States must achieve, Member States are granted discretion as to how the objectives defined by EU directives are incorporated into the national legal system. In this case, in the MoE’s view, Latvia has transposed the Modernisation Directive through the provisions of the Law on the Prohibition of Unfair Commercial Practices. Moreover, the provisions implemented in Latvia have already been applied in practice to legal situations falling within the scope of the requirements of the Modernisation Directive.
The received notification is part of the EC’s pre-litigation procedure, which is applied when incorrect transposition of a directive is identified. The procedure takes place in two stages: first, a formal notice is sent to the Member State, to which explanations must be provided within two months, followed by the preparation of a reasoned opinion. If the Member State’s explanations are not submitted or are not deemed sufficient by the EC, the Member State is requested to take the necessary measures to ensure compliance within two months.