AGP Executive Report

Latvia Election Watch: Reuters reports Prime Minister Andris Kulbergs’ United List is set to win the most seats on Saturday, but will likely need a coalition as security and cost-of-living dominate and many voters remain undecided. Defence & Industry: Latvia signed a trilateral deal to buy 155mm “Morana” artillery systems (with missile artillery) with Czech and Slovak partners, including plans to localize some production. Security Risks: President Edgars Rinkēvičs says Latvia has no evidence of a direct Russian invasion, while pointing to sabotage and cyber threats already hitting the region. Cross-border Crime: EPPO indicted two Polish nationals over a €100m+ electronics VAT fraud ring spanning multiple EU states, including Latvia. Payments & Consumers: Bank of Latvia data shows cashless payments hit a record 81% of transactions in August, with smartphone payments rising. Business Support: LIAA says its autumn business incubation programme drew a record 313 applications. EU Health Push: EU Screening Week urges “Know Your Numbers” checks for blood pressure, cholesterol and blood sugar to cut cardiovascular deaths.

Latvia Election Watch: President Edgars Rinkēvičs says Latvia currently has no indications of a direct Russian invasion of NATO members, while warning that sabotage and cyberattacks remain a real risk as authorities urge the public to report suspicious activity ahead of the Oct. 3 vote. Defense & Security: Estonia attributes the Milrem Robotics arson in Tallinn to Russian special services, and the ISS says it has prevented a significant number of Russian-planned hybrid attacks in recent years. Business Finance: Signet Bank provided EasyCars with EUR 1.3m to expand its short-term rental fleet at Riga and Tallinn airports. Payments & Consumer Trends: Non-cash payments hit a new high in Latvia—81% of transactions in August—while smartphone payments also reached a record share. SME Support: LIAA’s Business Incubation Programme logged a record 313 applications for the autumn intake. Legal Ruling: Latvia’s Constitutional Court struck down debt-relief rules that release people without assessing their overall ability to repay. Transport Policy: Saeima is set to approve a fuel tax cut by suspending a safety reserve service fee through end-2026.

Latvian Defence & Procurement: President Edgars Rinkēvičs says Latvia plans to buy U.S. Anduril’s long-range Barracuda cruise missiles, but details on version, quantity, price and delivery timing are still unclear. Security & Hybrid Threats: Estonia attributes the Aug arson at Milrem Robotics in Tallinn to Russian special services and summoned Russia’s chargé d’affaires; NATO and EU leaders backed Tallinn, while Latvia has already handed over suspects linked to the case. Trade & Food Security: Latvia is tightening checks on grain transit as September volumes surge—253,623 tonnes of Russian grain transited via Latvia from Sept 1–24, nearly double last year’s full month—while customs and lab testing focus on whether cargo includes grain stolen from occupied Ukraine. Business & Finance: Nordic Investment Bank signed a long-term lease for 210 m² at Riga’s Origo One, reinforcing the city’s push as a regional finance hub. Innovation & Exports: LIAA’s U.S. trade mission ended with deals in defence tech and genomics, with Latvia–U.S. trade up 13% in 2025 to €1.63bn.

Baltic Security & Defence: Estonia says Russia ordered the Aug. arson at Milrem Robotics in Tallinn, a move it links to wider sabotage aimed at weakening support for Ukraine; Estonia has summoned Russia’s chargé d’affaires and arrested suspects tied to the attack. Latvia Business & Economy: Latvia is tightening checks on grain transit amid concerns about crops stolen from occupied Ukraine, while September transit volumes through Latvia show a sharp rise for Russian grain and a massive jump for Belarusian flows. Finance & Property: Nordic Investment Bank has leased space at Riga’s Origo One, reinforcing the Riga Central Business District’s pull for international finance. Agri-Food Results: Agrova Baltics reported a strong first half of 2026, with revenue up 52% and profit reaching EUR 3.95m, supported by higher egg volumes and capacity expansion. Healthcare Costs: Latvia’s health minister says a 30% pay rise for healthcare workers may be hard to deliver next year, citing budget constraints and slow economic growth. Workplace Safety: Eurostat data show Latvia’s fatal workplace accident rate fell to 2.71 per 100,000 employed in 2024, the lowest since the Covid period.

Latvia Defence & Procurement: Latvia is moving to buy Anduril’s Barracuda jet-powered cruise missiles for long-range strike capability, while Origin Robotics is also teaming up with Anduril to integrate counter-drone tech for testing along the eastern flank. Baltic Security Posture: NATO officials warn Russia’s hybrid and drone threats are edging toward more direct action, pushing Latvia and neighbours to rethink how they defend—using automated anti-drone systems so fighter jets aren’t the first line. Banking & Russia Exit Risk: OTP Bank says it is reviewing whether to exit Russia as ECB scrutiny grows around its planned Luminor acquisition, with a formal strategy review expected by year-end. Energy & Costs: EU gas storage is “exceptionally low” for winter, with LNG supply disruptions tied to the US-Iran conflict and Qatar extending force majeure—raising the stakes for prices and supply. Trade & Logistics: Venipak is investing €2.5m+ to expand parcel locker capacity in Latvia by ~15%, boosting automation across the Baltics. Local Economy & Tourism: Freeport of Riga set a new seasonal record with 150,000 cruise passengers so far, with forecasts pointing to a ~30% rise year-on-year. Crime & Finance: Latvia is linked to an investigation into a Riga property money-laundering scheme involving a convicted suspect.

Port & Tourism: Riga’s Freeport set a new cruise record, welcoming 150,000 passengers so far this season, with forecasts pointing to ~30% more visitors than last year. Logistics & Retail Tech: Venipak is investing €2.5m+ across the Baltics and boosted Latvia parcel locker capacity by ~15% to handle rising volumes. Energy Policy: The European Commission opened infringement cases against 18 EU states, including Latvia, for not fully transposing EU energy-sharing rules. Defence Industry & Procurement: Latvia is building an automated anti-drone “wall” along its eastern border, aiming to make fighter jets a backup rather than the first line of defence. EU Security Industrial Push: EU defence ministers formally backed the first five joint “projects of common interest,” including drone/counter-drone and eastern-flank surveillance, with large multi-year ambitions. Central Banking: Latvijas Banka will hold its annual conference in November on euro-area challenges in the “new geopolitical reality,” with ECB leadership among speakers. Elections & Public Trust: Former Latvian president Valdis Zatlers urged voters not to outsource choices to AI, warning they could be “definitely be fooled.” Business & Innovation: bilt.me, an AI-native app builder from Tallinn, raised about €615k to scale its native iOS/Android app creation platform.

Latvia Defence Procurement: President Edgars Rinkēvičs says Latvia will acquire Anduril’s Barracuda long-range cruise missiles, potentially making it the first Baltic state with a strike capability beyond 500 nautical miles. Baltic Security Planning: Lithuania is testing evacuation procedures under “Vyčio Skliautas 2026” and, with Poland, is working on a cross-border plan that could move residents of Lithuania, Latvia and Estonia into Poland during a crisis. Hybrid Threats & NATO Readiness: European governments warn Russia’s sabotage, cyber-attacks and disinformation are escalating into direct attacks on NATO-linked infrastructure; Latvia’s foreign minister calls it “full scale.” EU Energy Rules: The European Commission has opened infringement proceedings against Latvia and 17 other states over incomplete electricity market rule transposition, and against 26 states over hydrogen and gas directive delays. Logistics & Retail: DHL eCommerce is seeking more acquisitions in Eastern Europe, including its planned Venipak deal for parcel lockers and delivery in Lithuania, Latvia and Estonia; “Lidl Latvija” reported 2025 turnover up 7.5% to €495.6m while continuing its investment phase. Cybersecurity: Latvia’s Cert.lv says phishing simulations still catch many staff—31.5% of emails were opened in 2025—while MikroTik RouterOS vulnerabilities prompted Russian regulators to order operator checks. Public Safety Law: Latvia has barred firearm permit issuance to citizens holding Russian or Belarusian citizenship, with transitional rules running until Dec 1, 2026.

Defense & Security: Latvia’s foreign minister says Russia’s “hybrid” activity is now “actual attacks,” as Europe warns of sabotage and cyber pressure aimed at NATO and Ukraine support. Baltic Civil Preparedness: Lithuania and Poland are drafting a cross-border evacuation plan for residents of Lithuania, Latvia and Estonia, with mobilization exercises running through early October. Missile Procurement: Latvia is moving to buy Anduril’s Barracuda long-range cruise missiles after President Edgars Rinkēvičs’ US visit, aiming to field a first strike capability in the Baltics. Industrial Readiness: Latvia’s defense minister urges NATO to disperse weapons production and learn from Ukraine’s wartime manufacturing model. Logistics & M&A: DHL eCommerce is seeking more Eastern Europe acquisitions, with its planned Venipak deal set to expand parcel lockers and local delivery in Lithuania, Latvia and Estonia. Retail Performance: “Lidl Latvija” reported 2025 turnover of €495.6m (+7.5%) and €20.3m investment, continuing its store and tech rollout. Cyber Risk: Latvia-linked reporting highlights phishing simulation results showing many employees still struggle to spot scams, alongside a separate case of MikroTik vulnerability notices in Russia. EU Energy Rules: The European Commission opened infringement proceedings against Latvia and others over incomplete electricity and hydrogen/gas market rule transposition.

Cybersecurity & Telecom: Russia’s regulator Roskomnadzor ordered operators to inspect MikroTik RouterOS gear after potential vulnerabilities were flagged, with updates recommended and possible traffic limits if fixes aren’t applied. Retail & Investment: “Lidl Latvija” reported 2025 turnover of €495.6m (+7.5%) and said it kept investing, putting €20.3m into development while expanding stores and rolling out “Lidl Pay.” Business Diplomacy: Latvia’s trade mission in California is pushing genomics partnerships and technology commercialisation, aiming to grow knowledge-based exports as President Edgars Rinkēvičs visits the US. Energy Regulation: The European Commission opened infringement cases over incomplete electricity, hydrogen and gas market rule transposition, including Latvia, giving governments two months to respond. Fraud Awareness: Latvia’s cyber response group Cert.lv said phishing simulations in 2025 saw 31.5% of emails opened, urging regular staff training. Security & Infrastructure: Latvia opened a probe after road signs pointing to Russian cities were painted over, with State Roads saying the changes weren’t authorised.

EU Energy Rules: The European Commission has launched infringement proceedings against Latvia and 17 other countries over incomplete transposition of electricity market rules, while separate action targets 26 states over hydrogen and decarbonised gas rules. Cybersecurity & Telecom: Russia’s regulator Roskomnadzor ordered operators to inspect MikroTik RouterOS after potential vulnerabilities were flagged, with updates recommended to prevent loss of access. Fraud Prevention: Latvia’s Cert.lv reports that in 2025 phishing simulations, 31.5% of 15,436 emails were opened and credentials were entered 3,032 times, pushing for more staff training. Security & Infrastructure: Latvian police opened a criminal probe after road signs pointing to Moscow and Ostrov were painted over. Defense Industry: Latvia is moving on counter-drone cooperation, with Anduril and ORIGIN set to assess integrating their systems for NATO’s eastern flank. Business & Trade: Latvia’s genomics and tech commercialisation delegation is in California via an LIAA mission, aiming for partnerships, licensing and joint product development. Payments Tech: Lithuania’s Inventi became the first Baltic Swift Business Connect provider, offering managed Swift connectivity to financial institutions. Energy Costs: Brussels also pressed multiple countries over industrial emissions and other energy-related compliance gaps.

Defense & Procurement: Latvia is moving toward acquiring Anduril’s Barracuda long-range cruise missiles, with President Edgars Rinkēvičs highlighting new U.S. defense-industry cooperation and MoUs during his visit. Counter-Drone Tech: Anduril and ORIGIN signed an MoU to assess integrating Anduril’s Lattice command-and-control with ORIGIN’s BLAZE interceptor drone, including joint testing and demonstrations in Latvia. Sanctions & Risk: Bloomberg reports Russian billionaires are studying how Alisher Usmanov and Mikhail Fridman navigated EU sanctions delisting, while Latvia has also imposed national sanctions following the EU compromise. Trade & Security: Latvia urgently introduced tighter border controls on third-country grain transit to block stolen Ukrainian grain moving via forged documents. Energy Costs: Latvia’s heating bills could rise 10–15% this winter, though fuel supplies are considered adequate. Aviation Finance: AirBaltic filed for Chapter 11 in the U.S., saying operations continue as it seeks new terms amid debt and rising costs. Regulation Watch: The European Commission opened infringement procedures over missed EU rules on industrial emissions, hydrogen/gas markets, AML, and consumer protection.

Border Controls on Grain: Latvia’s Saeima has urgently amended the Animal Feed Circulation Law to introduce mandatory border checks on third-country grain shipments, empowering the Food and Veterinary Service to inspect consignments and take lab samples to verify origin and block stolen Ukrainian grain. Fuel Tax Debate: Lithuania’s finance minister questioned Latvia’s temporary diesel and petrol excise cuts, arguing the measure is too costly to replicate, while Lithuania weighs alternatives like discounted public transport fares. Heating Bills Watch: Latvia’s Ministry of Climate and Energy warns heating costs could rise 10–15% in a mild-to-moderately cold winter, with local differences depending on fuel and purchase timing. Rail Baltica Timeline: Estonia, Latvia and Lithuania agreed to shift Rail Baltica’s main-line completion into the 2028–2034 EU budget period, pushing the Tallinn–Pärnu section to 2032. Riga Airport Expansion: Riga Airport is advancing a €98m terminal expansion to add capacity and modernise passenger processing, with works planned in stages over about 42 months. Defense Procurement: Latvia is moving to buy Anduril’s Barracuda long-range cruise missiles, while also signing cooperation memoranda with local drone maker Origin Robotics. Business & Tech: Digitex (Datlex group) is acquiring 90% of InfoStrategy, and Tet appointed a new executive director for its Helio Media subsidiary.

EU Sanctions & Baltic Fallout: Latvia is set to impose national sanctions on Russian oligarchs Alisher Usmanov and Mikhail Fridman after the EU delisted them in a compromise, while Estonia and Lithuania also moved to keep pressure at home. Defense & Procurement: Latvia’s defence ministry is exploring Israeli air-defense and drone countermeasures, including loitering systems and potentially Iron Dome, as Riga weighs a collective European air-defense approach. Energy Storage Investment: Taaleri Energia backed Estonia’s 192MW/420MWh Raudsepa battery project, targeting grid balancing and market revenues from 2027. Agribusiness Finance: Signet Bank provided EUR 4m to SIA Agro-Kaķenieki for farm development and efficiency upgrades. Mobility Tech: dots. and HOLON agreed to pursue EUR 30m EU-backed autonomous transport pilots and an autonomous vehicle manufacturing base in Latvia. EU Industrial Policy: Ministers debated Chips Act 2.0, focusing on reducing chip dependencies while keeping open trade with trusted partners. Business & Trade: Fruit Attraction 2026 expects 121,000 trade visitors and highlights Latvia’s participation.

Banking & Agriculture: Signet Bank approved EUR 4m financing for SIA Agro-Kaķenieki to modernise dairy and crop operations in Zemgale, supporting exports and efficiency. Mobility & Tech Investment: dots. and HOLON agreed to pursue up to EUR 30m in EU-backed funding for autonomous transport in the Baltics, including an autonomous vehicle manufacturing facility in Latvia and pilot passenger routes. Energy Markets: A Clean Horizon analysis says battery storage revenues rose in Spain in August, while the Baltics lagged elsewhere—highlighting how market design and ancillary services shape profitability. Hospitality & Tourism Demand: After a EUR 4m renovation, Pullman Riga Old Town is positioning itself for stronger winter conference business and a higher share of Riga’s five-star market. Defence Procurement: Latvia selected the Czech Morana 155mm wheeled howitzer over Sweden’s Archer, citing lower cost, faster delivery and Latvian industrial participation. Sanctions & Politics: Estonia and Lithuania moved to impose national sanctions on Usmanov and Fridman after the EU delisted them, while Latvia’s stance remains a key part of the bloc’s fallout. airBaltic Restructuring: The airline’s Chapter 11 filing puts funded debt at EUR 503.3m and operating lease liabilities at EUR 855.6m, with plans to reduce fleet size. Cyber & Security: Latvia arrested a suspected hacker tied to breaches at at least two companies, as regional defence and drone concerns keep rising.

EU Sanctions Standoff: The EU extended Russia-linked sanctions for 36 months, but removed billionaire Alisher Usmanov and Mikhail Fridman from the list—sparking backlash from Ukraine and anger across Europe, with Latvia saying it was forced into a “difficult” compromise and initially opposing the delistings. Latvia’s National Response: Latvia moved to impose its own sanctions on Usmanov and Fridman after the EU decision, while the Latvian PM said the country was left “standing alone” in the negotiations. Baltic Drone Defense Push: Estonia, Latvia and Lithuania secretly asked the European Commission for €500m to boost drone-fighting capabilities, citing fears of Russian drone strikes testing NATO’s resolve. AI Governance: Czech President Petr Pavel urged AI to develop under international rules, warning that governance must keep up before risks grow. Energy Security for Winter: Ukraine warned Canada to help keep the lights on as Russia targets energy infrastructure ahead of winter, while Finland and Ukraine signed a drone-defense cooperation deal. Cybercrime in Latvia: Latvian police arrested a 23-year-old suspect over hacking at least two companies, including an LMT electronics repair breach, allegedly stealing personal data and attempting extortion.

EU Sanctions Pressure: EU economy commissioner Valdis Dombrovskis urged member states to fight “sanctions fatigue” after the bloc extended Russia-linked personal sanctions for three years but delisted Alisher Usmanov and Mikhail Fridman, a move Latvia initially blocked before lifting its veto under pressure. Latvia’s Position: Prime Minister Andris Kulbergs said Latvia was left “standing alone” in the Baltic stance and warned the compromise could weaken EU unity. Ukraine Pushback: Ukraine called the delistings “shameful and unjustifiable,” warning Russia may exploit EU divisions. National Security & Business Risk: Latvia arrested a 23-year-old hacker suspected of cyberattacks and extortion against at least two companies, including LMT group repair firm TSC. Defense Supply Chain: Latvia extradited suspects in the Milrem Robotics arson case to Estonia; the firm supplies weapons to Ukraine. Trade & Growth: A Latvian business mission kicked off in the US (New York, Los Angeles, San Diego) with meetings across defense/dual-use, biotech and start-ups. Digital Economy: Riga will host Techritory 2026 on digital sovereignty, security and connectivity in October.