1. Latvia’s prosecution system: Opportunities and challenges
This chapter introduces the opportunities and challenges of the Latvian public prosecution system encountered in its pursuit to tackle criminality, with particular emphasis on fighting economic and financial crimes. It outlines the Latvian and global context, the Report’s methodology and related international standards. The chapter also introduces the OECD benchmarking countries through which comparative analysis is carried out: the Czech Republic, Denmark, Finland, France, Italy, Ireland, Portugal, the Netherlands, New Zealand and Sweden.
Prosecutors play a pivotal role in the administration of criminal justice. They are ascribed a noble title as “Ministers of Justice” because they are not advocates taking sides on a case; instead, they seek to achieve justice, and with their professional activity uphold the rule of law. As expressed by the Special Rapporteur, the United Nations’ Human Rights Council on the independence of judges and lawyers, prosecutors also play a key role in “protecting society from a culture of impunity” and function as gatekeepers to the judiciary (UNHRC Special Rapporteur on the independence of judges and lawyers, 2019[1]).1 A prosecutor’s client can be considered society as a whole, and thus is a figure on which the public places their trust (UNODC/IAP, 2014[2]). In playing such a vital role, it is essential that the prosecutor act according to high standards of diligence, efficiency and effectiveness. A growing international trend signals towards the need to improve the quality and performance of court services, including those of the prosecution, in order to increase satisfaction and trust of the public in the justice system (Ivan-Cucu, 2015[3]).
Indeed, effective prosecutor services are essential to tackle criminality, including economic and financial crimes. This is especially important in Latvia, as it had developed an important financial sector which has been highly exposed to foreign customers, with this situation contributing to create a number of vulnerabilities to economic and financial crimes. At the beginning of 2019, the Latvian government designated Latvia as a regional financial transaction centre, attracting significant transit flows of financial resources, as well as deposits from non-residents. The 2018 Moneyval report rated the country´s risk to money laundering as “medium high” with the main sources of criminal proceeds – mainly generated abroad - being corruption, bribery, tax offences, fraud and smuggling. Other risk factors identified by the report are the influence of international organised crime groups and the significant size of shadow economy, estimated to be 20-25% of GDP. As a result, economic crimes were considered more common than other ones generating proceeds such as drug trafficking (Moneyval, 2018[4]). The Latvian government has been taking active steps to control and reduce risks in the financial sector, including the withdrawal of licences for several banks. The authorities report that these efforts led to a significant reduction of the volume of cross-border payments, in particular payments in foreign currencies and payments made by non-residents (Ministry of Justice of Latvia, 2020[5]).
Risks of economic and financial crimes also emerged from the evaluation carried out in the Phase 3 Report of the OECD Working Group on Bribery in International Business Transactions, highlighting how shell companies are often used to move illegal funds through Latvian banks into the international financial system. The report analysed the nine known allegations of bribery of foreign public officials and, while it welcomes the law enforcement activity on those, it also raises concerns that none of the allegations that had surfaced have reached the prosecution stage, with four cases that have either not been opened or were terminated and five ongoing investigations. As of December 2020, two of the cases have been sent for prosecution. On top of that, the report notes that no financial institution was ever held criminally liable in Latvia for its role in a foreign bribery scheme or for money laundering. More generally, it concludes that Latvia’s enforcement results should be more commensurate with the country’s exposure to foreign bribery and subsequent money laundering risks. (OECD, 2019[6]).
The exposure to these typologies of crimes has been recognised as a threat to the national economy by the Latvian Parliament, which in 2019 included the need to strengthen the capacity of law enforcement institutions in detecting and investigating economic and financial crimes within the national security strategy. The Prosecutor General Office’s operational strategy 2017-2021 has also identified as a priority the effective and high-quality performance of the functions of the Prosecutor’s Office in the fight against financial and economic crime, together with a set of goals and corresponding activities (Box 1.1).
At the same time, there have been a number of general concerns expressed about the effectiveness and performance of the Latvian prosecution service, in particular in relation to the investigation and prosecution of economic and financial crimes, where a number of challenges appear to exist. While Council of Europe statistics show an average of 3.1 prosecutions per 100 000 inhabitants among the evaluated countries, they show 0.68 cases per 100 000 inhabitants in Latvia (in contrast with, for example, 2.61 cases in Lithuania and 2.06 cases in Estonia), despite the fact that the number of prosecutors in Latvia appear to be among the highest in Europe (CEPEJ, 2020[7]).In particular, in accordance with the State Audit of Latvia, there appear to be difficulties when it comes to bringing and holding charges before the courts. According to the data provided by the State Police to the State Audit Office (Latvia State Police, 2019[8]), in 2018, only less than 13% of the criminal proceedings in the records of the Economic Crime Combating Board of the State Police (i.e., 74 criminal proceedings out of 587 pending criminal cases) were sent for prosecution, 10% in 2017, and 13% in 2016 (Latvia Court Administration[9]). The Ministry of the Interior has pointed out the problem in its submissions to the government that only 12 out of 399 money laundering criminal cases were prosecuted between 2013 and 2016, and judges often criticise even those cases that go to court because there is a lack of sufficient evidence to reach a judgement of conviction at the same time (Ministry of Interior, 2018[10]). Research by the State Audit Office suggests that an insignificant number of criminal cases have been initiated in courts for money laundering during the last decade, namely, 95 cases, of which 57 cases (or 60%) have been resolved. There was a judgement of conviction given in 39.5% of cases and a judgement of acquittal given in 7% of cases (Ministry of Interior, 2018[10]).
An additional issue is the length of pre-trial proceedings and subsequent generation of backlogs, sometimes enabling perpetrators to ask the court to mitigate the sentence when the right to complete the criminal proceedings within a reasonable time has, in their view, not been observed pursuant to Section 49.1 of the Criminal Law. For example, the 3rd Bureau of the Criminal Police Board of the Riga Regional Board of the State Police still has 4 230 criminal proceedings pending (that is, 51% of all those under investigation) initiated more than five years ago and still not even sent for prosecution; and out of the criminal offences in financial and economic areas previously pending before the investigating authorities2 between 2009 and 31 December 2019, prosecution still continues in 19.2% of cases.
In parallel, corruption is also estimated to be relatively common, leading to a loss of public confidence in the civil service and criminal justice system, thereby creating a feeling of impunity within the country. (Moneyval, 2018[4]) This view is echoed in the 2020 Eurobarometer on Corruption, where 84% of respondents consider it widespread, 61% of them that there are not enough successful prosecution to deter people from corrupt practices, and 71% that high-level corruption cases are not pursued sufficiently (European Commission, 2020[11]). Indeed, corruption convictions usually relate to low to mid-level officials and small amounts, while final judgments on high-level cases are rare, supposedly for their complexity and delays. In particular, the largest share of cases in 2016 concerned bribes to traffic police, and categories of most convicted officials belonged to the state police, customs, and border controls. According to GRECO (2018), that year the largest bribes were one of approximately EUR 70 000 offered to an anticorruption official and another one of EUR 500 000 in connection with a public procurement tender. (GRECO, 2018[12]). Additional cases have been submitted for prosecution, including one which involved a bribe of EUR 2 262 339.35 to a public official of Belarus to ensure beneficial decisions in favour of a legal person registered in Latvia that caused over EUR 513 000 losses to the State in company income tax; and a bribe was offered to a police officer in the amount of EUR 1 000 000 (KNAB, 2020[13]).
Priority: Effective and high-quality performance of the functions of the Prosecutor’s Office in the fight against financial and economic crime.
Goal 1 – Ensuring control of the work of prosecutors in pre-trial criminal proceedings
Tasks:
Chief prosecutors of the Prosecutor’s Offices at all levels shall continue the regular discussion of the course and progress of supervision of the investigations, investigation, and prosecution on economic crimes.
Include inspections of the effectiveness and quality of supervision of the investigations and prosecution of financial and economic crime periodically in the work plan of the Prosecutor’s Office.
Organise joint meetings of chief prosecutors and investigation authorities concerning the investigations of financial and economic crime.
Goal 2 – The imposition of proportionate penalties for financial and economic crimes
Tasks:
Prepare internal regulations for ensuring the uniformity of actions of prosecutors in trials of criminal cases regarding serious and very serious financial and economic offences.
Elaborate a mechanism for the control of the actions of prosecutors in courts so that the chief prosecutor of the Active Criminal Cases Division of the Criminal Justice Department of the Office of Prosecutor General could decide on the necessary response measures.
Collect information on the actions of prosecutors in courts regularly.
Goal 3 – Training and knowledge acquisition
Tasks:
Implement the professional continuing education programme by identifying and including in the training necessary for prosecutors into the curricula.
Compile, analyse, and place information on topical court rulings in the module “Methodological Materials” of the information system of the Prosecutor’s Office available to prosecutors, to provide information on topical issues of case-law and legislation.
Foster the participation of prosecutors in international events for exchange of experience.
Source: Operational Strategy of the Prosecutor’s Office 2017-2021, available at http://www.prokuratura.gov.lv/media/newsfiles/Latvijas_Republikas_Prokuraturas_darbibas_strategija_2017_2021_gadam.pdf.
In this context, assessments carried out by several international organisations, in particular by the OECD Working Group on Bribery in International Business Transactions and the FATF-GAFI, and GRECO and Moneyval of the Council of Europe, among others, have identified the need to strengthen performance of the prosecutorial services in Latvia, in particular in relation to economic and financial crimes. This need has also been identified by the State Audit Office as a result of the audits over the last several years. In that vein, this report aims to analyse the legal status and managerial performance of the prosecution services of Latvia, benchmarking against the practices of a selection of OECD countries, with a view of generating recommendations to support improvements in the performance of the Latvian Prosecution system.
The OECD criteria for people-centred justice services point to the need to ensure justice services, including prosecution, are effective and continually improved through evaluation, evidence-based learning and the development and sharing of best practices (OECD, 2019[14]). In such light, this study has been carried out with the aim to identify good practices available in the prosecution field that lead towards prosecution excellence, including in the areas of management and leadership, prosecution policies and plans, efficient prosecution procedures, effective co-operation with relevant justice and police authorities, a high quality of prosecution case files (indictments), a high level of user satisfaction and public trust and a high level of accessibility (Albers, 2016[15]).
This study, therefore, aims to identify areas tools that the Latvian prosecution system can use to its advantage to improve performance by benefitting, on the one hand, from the experiences in the selected OECD peer countries (which include the Czech Republic, Denmark, Finland, France, Italy, Ireland, Portugal, the Netherlands, New Zealand and Sweden); and on the other, from the most important international and regional standards for the performance of prosecutors and for judicial performance generally.
In addition, the benchmarking study´s analysis and recommendations also address the specific challenges in the prosecution of economic and financial crimes while duly considering the key factors favouring its effectiveness, which may include, among others:
A legal framework allowing prosecution to act as an independent and autonomous institution free of any undue political or other external influence.
A merit-based recruitment system safeguarding autonomous, independent and transparent decision making.
Appropriate human, financial and technical capacity to address complex cases in a timely way, including support from external experts.
Mechanisms for swift co-operation and co-ordination between prosecutors and investigators at the national and international level.
The availability of procedural tools to address the economic dimension of crimes such as freezing, seizing, confiscating and asset recovery.
The use of technology for investigating complex economic and financial schemes.
Objectivity in the allocation of cases based on criteria of knowledge and experience.
Highest standards of integrity of prosecutors, acting – and appearing to act – impartially and without any conflict of influence.
Regular training programmes providing multidisciplinary skills.
Respect for defendants’ rights throughout all the phases of the proceedings (Council of Europe, 2019[16]).
Information about the performance of the Latvian system has been gathered through fact-finding interviews with key stakeholders (Prosecutor General’s Office and Administrative Director of the General Prosecutor’s Office, Specialised public prosecutor’s office in financial and economic crime, regional, district and city prosecutors’ offices, Latvian Judicial Training Centre, Corruption Prevention and Combating Bureau (KNAB), Ministries of Interior, Justice and Finance, the State Police, and the Tax and Customs Police of the State Revenue Service, and civil society representatives, among others) carried out throughout the months of June to August 2020, and the information they submitted; information provided by the State Audit Office of Latvia (State Audit Office, 15 May 2020[17]) (State Audit Office, 15 May 2020[18]); data gathered by international organisations’ reports; and finally, input provided by local NGOs and professional associations (in particular, the Association of Prosecutors and the Association of Judges, as well as Transparency International Latvia). In order to carry out the benchmarking study, peer countries have generously provided the necessary information about their respective systems.
The rest of the report is structured as follows: the report firstly brings together the key recommendations from throughout the report in an Assessment and Recommendations section. It then dives into the content of the report, offering an overview of the Latvian criminal justice system (Chapter 2); it then provides an account of the structure and constitutional position of the Latvian prosecution system in respect of the benchmarked countries, assessing the possibilities offered by the legality and opportunity principles to the prosecution (Chapter 3). Next, the report zooms into the ways to measure and improve performance of prosecution systems as a whole, focusing on the achievement of excellence in the prosecution through strategic management (Chapter 4), and drivers to assess and improve individual performance of prosecutors (Chapter 5). Finally, it analyses integrity policies and culture in Latvia (Chapter 6). Comparisons on the basis of the selected peer OECD countries is offered on a topical basis, throughout the full report. A comprehensive overview of each of the peer prosecution systems can be found in Annex C. In the Assessment and Recommendations section, targeted recommendations are offered for the improvement of performance of the Latvian prosecution services, based on conclusions drawn from the research conducted.
The selection of OECD benchmarking countries has followed two main lines of reasoning, namely their institutionalisation and the management practices, which together can explain many of the features of a given prosecutorial system:
1. The institutional location of the prosecutorial services, which bears a systemic component linked to a specific understanding of democracy, the rule of law and the public interest. It can impact the prosecutors’ independence, ethical standards, administrative culture and their perception of their own role within a national criminal justice system. The relationship between investigators and prosecutors has largely to do with this institutional component as well as the policy-making function of prosecutorial services where they have one. In the backdrop, there is the dual facet of the prosecutors’ role, which involves an accusatory function and the objective defense of legality, both at once. As the decision to prosecute is made, what follows can be a psychological shift whereby prosecutors set the objective to get defendants convicted (Lidén, Grans and Juslin, 2019[19]).
2. The management practices, which may or may not be a consequence of the institutional location, as they can be tributary to various factors which could have developed independently. The experience of OECD countries suggests that the institutional location is not enough per se to support certain management values, such as efficiency and effectiveness, but may obstruct their change in a considerable way. Specialisation is deemed to be linked to efficacy, whereas prosecutorial accountability and their legitimacy in the public eye is reinforced or weakened by managerial practice. Reforms of internal structure and management of prosecutors’ offices, as well as improved human resources management, have been highlighted as an area that could improve prosecutor behaviour and accountability (Bibas, 2009[20]). A number of additional considerations in the assessment of prosecutorial services have been summarised in Annex A.
Prosecutorial services in OECD benchmark countries show a wide variety of combinations of those two components, which in turn produce a variety of outcomes. Given the heterogeneity in approaches, the combination of the proposed countries for benchmarking, taken together, can offer a valuable account of that variety of country profiles while bringing about valuable insights for Latvia. Neither civil law prosecutorial systems nor common law ones are homogeneous groupings. Each national system is the result of a specific political, constitutional and legal history.
Numerous international institutions and associations produce instruments and reports for monitoring and measuring various aspects of the performance of different segments of countries’ justice systems. This report will include a selection of instruments relevant for addressing the performance of the prosecutorial services, primarily European (e.g. promoted by the Council of Europe) and global (e.g. mainly promoted by the United Nations and the International Association of Prosecutors). These two groups of instruments should provide a basis for the self-assessment of the Latvian prosecutorial service from a managerial viewpoint.
European standards and indicators - In Europe, the Recommendation Rec(2000)19 on “The Role of Public Prosecution in the Criminal Justice Systems” was adopted by the Committee of Ministers of Justice of the Council of Europe on 6 October 2000, which was the first Europe-wide document aimed at setting standards for prosecutorial services. The Committee of Ministers aimed to improve the quality and efficiency of the European judicial systems and strengthening the court users’ confidence in such systems. The European Commission for the Efficiency of Justice (CEPEJ) was created and started operations at the end of 2002. The CEPEJ reports are relevant resources that incorporate important comparative indicators on measuring the performance of the public prosecutors in European countries.
The United Nations Guidelines on the Role of Prosecutors, adopted by the Eighth United Nations Congress on the Prevention of Crime and the Treatment of Offenders (1990), complemented by a relevant guide (The Status and Role of Prosecutors: A United Nations Office on Drugs and Crime and International Association of Prosecutors Guide, 2014, “the UNODC/IAP Guide”), also illustrate international standards. They set international Guidelines in relation to, among other topics:
prosecutor qualifications, selection and training, including promotions
the role in criminal proceedings and the scope of discretionary functions.
The Standards of professional responsibility and statement of the essential duties and rights of prosecutors, 23 April 1999 by the International Association of Prosecutors (“IAP Standards”) which relate to professional conduct, independence, impartiality, role in criminal proceedings, co-operation and empowerment are an important source of international good practices guidelines.
Further international practices and standards can be drawn from:
Opinions of Consultative Council of European Judges;
Opinions of Consultative Council of European Prosecutors; and
Documents created by the Venice Commission, including the Report on European Standards as regards the Independence of the Judicial System: Part II - the Prosecution Service.
Sources: (Committee of Ministers of Justice of the Council of Europe, 2000[21]) (United Nations, 1990[22]) (UNODC/IAP, 2014[2]).
References
[15] Albers, P. (2016), New quality standards for the public prosecutors: is there a need for a framework for prosecution excellence?.
[20] Bibas, S. (2009), “Prosecutorial Regulation Versus Prosecutorial Accountability”, University of Pennsylvania Law Review, Vol. 4, pp. Pages 959-1016., https://scholarship.law.upenn.edu/faculty_scholarship/244/.
[7] CEPEJ (2020), “2020 Report of the Council of Europe European Commission for the Efficiency of Justice (CEPEJ), data of 2018.”.
[21] Committee of Ministers of Justice of the Council of Europe (2000), Recommendation Rec(2000)19 on “The Role of Public Prosecution in the Criminal Justice Systems”.
[16] Council of Europe (2019), Opinion No. 14 (2019) of the Consultative Council of European Prosecutors: The role of prosecutors in fighting corruption and related economic and financial crime, https://rm.coe.int/opinion-14-ccpe-en/168099399f (accessed on 22 September 2020).
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[3] Ivan-Cucu, V. (2015), Evaluating prosecutors’ performance: celebrating success and censuring failure, https://www.iap-association.org/getattachment/Conferences/Annual-Conferences/Annual-Conference-2014/Tuesday-25-November-2015/Virgil.pdf.aspx.
[13] KNAB (2020), “Ad hoc input for this OECD Report”.
[9] Latvia Court Administration (n.d.), “Data of the Court Information System selected and provided by the Court Administration”.
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[19] Lidén, M., M. Grans and P. Juslin (2019), “From devil’s advocate to crime fighter: confirmation bias and debiasing techniques in prosecutorial decision-making”, Psychology, Crime & Law, pp. 25:5, 494-526, https://doi.org/10.1080/1068316X.2018.153841.
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[17] State Audit Office (15 May 2020), “Republic of Latvia of factors affecting effectiveness of investigations of economic and financial crime”, Initial understanding of the State Audit Office.
[1] UNHRC Special Rapporteur on the independence of judges and lawyers (2019), “Report of the Special Rapporteur on the independence of judges and lawyers”, (A/HRC/20/19), para. 93..
[22] United Nations (1990), UN Guidelines on the Role of Prosecutors.
[2] UNODC/IAP (2014), The Status and Role of Prosecutors: A United Nations Office on Drugs and Crime and International Association of Prosecutors Guide, United Nations, https://www.unodc.org/documents/justice-and-prison-reform/HB_role_and_status_prosecutors_14-05222_Ebook.pdf.
Notes
← 1. The report also states that training is essential in order to maintain a competent and skilled prosecution service with the confidence and capability to operate autonomously with the support and confidence of the public (para. 89).
← 2. Corruption Prevention and Combating Bureau, Financial and Customs Police Boards of the State Revenue Service, Economic Crime Combating Division of the Criminal Police Headquarters of the State Police, Criminal Police Offices of State Police Regional Boards.