Defence Procurement, Sanctions & Regulatory Advisory in the Baltics – Lithuania, Latvia, Estonia

The Baltic States (Lithuania, Latvia & Estonia) have become one of Europe’s most strategically significant defence procurement, security and critical infrastructure investment markets. Driven by accelerating geopolitical developments and unprecedented public investment cycles, Lithuania, Latvia and Estonia are experiencing a structural expansion of defence spending and procurement activity, supported by NATO capability expansion and regional defence planning, EU SAFE financing and large-scale defence lending programmes, accelerated rearmament and ammunition procurement cycles, military mobility and infrastructure reinforcement projects, border security and surveillance investments, drone, counter-drone and autonomous systems procurement, and cybersecurity and critical infrastructure protection initiatives.

At the same time, European capital markets are increasingly pricing defence as the dominant growth sector of the next decade, with defence, security and dual-use technologies expected to represent one of the strongest-performing investment themes in Europe across equity, credit and private capital markets. This structural shift is driving significant M&A activity, private equity interest, and long-term infrastructure and technology investment into the defence ecosystem.

Against this background, international contractors entering the Baltic region face a highly dynamic environment characterised by accelerated procurement procedures and compressed timelines, complex regulatory and sanctions-driven compliance frameworks, increased scrutiny of supply chains and ownership structures,
export control and dual-use regulatory exposure, cross-border operational requirements across multiple jurisdictions, heightened national security considerations in procurement decisions.

ECOVIS Baltic Defence, Procurement & Regulatory Practice

The ECOVIS Baltic team provides integrated legal, procurement, sanctions and regulatory advisory services for international defence-sector participants operating across Lithuania, Latvia and Estonia.

We support foreign defence contractors, technology companies, infrastructure developers, manufacturers, investors and strategic suppliers throughout the full lifecycle of defence and security projects. Our core capabilities include:
• Strategic Procurement Advisory: Guidance on Directive 2009/81/EC, military supply chain structuring, and bidding procedures for Baltic defence tenders.
• National Security & Vetting Compliance: Representation during mandatory government national security screening processes for foreign investments and strategic supply contracts.
• Sanctions & Export Control (Dual-Use Goods): Compliance frameworks for transferring military and dual-use technologies across borders, including EU, US, and regional sanctions alignment.
• Dispute Resolution & Appeals: Strategic representation in complex public procurement disputes and tender qualification appeals before national courts.

Our work is led by practitioners with advanced academic specialization in public procurement law (LL.M. in Public Procurement Law from King’s College London) and extensive experience advising in regulated and strategically sensitive sectors.

Integrated Advisory Across Lithuania, Latvia, and Estonia

Operating through a coordinated Baltic platform across Lithuania, Latvia and Estonia, we enable international clients to engage one integrated regional counsel for multi-jurisdictional defence and security projects.

Latvia: Defence Industrial Growth, Border Security & Drone Ecosystem Expansion

Latvia is rapidly expanding its defence and security ecosystem, with a strong focus on border security infrastructure and surveillance systems,
drone and counter-drone capability development, ammunition and defence manufacturing expansion, NATO interoperability and allied procurement projects,
development of local and regional defence industrial capacity.

Latvia is increasingly positioning itself as a defence manufacturing and security innovation hub within the Baltic region, with strong emphasis on industrial participation and cross-border supply chain integration. We advise international companies on:
• participation in Latvian public procurement procedures,
• defence industry market entry and structuring,
• regulatory and sanctions compliance frameworks,
• export control and dual-use assessments,
• consortium and subcontracting arrangements,
• procurement disputes and administrative litigation,
• contract execution and claims management.

Our Latvia practice is particularly focused on supporting foreign suppliers entering the Baltic defence supply chain and navigating local regulatory and operational requirements.

Defence Procurement in High-Risk Regulatory Environments

Defence procurement in the Baltic region operates at the intersection of:
• national security policy,
• EU sanctions regimes,
• export control frameworks,
• dual-use technology regulation,
• AML and financial crime compliance,
• supply chain transparency requirements.

Our team combines deep expertise in:
• public procurement law,
• sanctions and export control compliance,
• AML and financial crime prevention,
• crypto-asset and digital finance regulatory frameworks,
• cross-border regulatory risk management.

We advise clients on:
• sanctions exposure and mitigation strategies,
• supply chain and counterparty due diligence,
• beneficial ownership and transparency assessments,
• dual-use classification and licensing,
• anti-circumvention controls,
• high-risk jurisdiction analysis,
• internal compliance frameworks and investigations.

Trusted Counsel for Strategic, Regulated & Defence-Linked Sectors

We advise clients operating in highly regulated and strategically sensitive sectors where procurement, sanctions, national security and compliance considerations intersect. Our work frequently involves projects connected to:
• defence and aerospace,
• critical infrastructure,
• cybersecurity and secure communications,
• dual-use and advanced technologies,
• military mobility and logistics,
• cross-border public procurement programmes.

Frequently Asked Questions

Can foreign companies participate in Baltic defence procurement?

Yes. EU and NATO-based suppliers may participate directly or through local consortium arrangements. All participants must meet qualification, sanctions screening, and supply chain transparency requirements.

What legal framework governs defence procurement in the Baltic states?

Each Baltic state applies national defence and security procurement legislation aligned with EU Directive 2009/81/EC and NATO procurement standards. Lithuania and Latvia apply accelerated acquisition timelines while strengthening national security oversight.

What are the main compliance risks for defence contractors in the Baltics?

Dual-use export control exposure, EU and US sanctions compliance, beneficial ownership disclosure, and supply chain transparency — particularly where subcontractors operate near high-risk jurisdictions.

Does EU defence procurement regulation apply identically across the Baltic states?

While Lithuania, Latvia, and Estonia have transposed the EU Defence Procurement Directive (Directive 2009/81/EC) into national laws, local procedures differ significantly regarding national security exemptions, security clearances, and local vetting timelines. Successful bidding requires strict compliance with each specific nation’s ministry of defence guidelines.

What is national security screening for defence contractors in the Baltics?

Foreign entities and international suppliers bidding on strategic military contracts or investing in critical infrastructure must undergo rigorous national security vetting. The process evaluates corporate ownership, Ultimate Beneficial Owners (UBOs), and supply chain links to ensure alignment with national security interests before any contract award.

How large is the Baltic defence procurement market?

Combined defence budgets across Lithuania, Latvia and Estonia exceed €9 billion, with Lithuania allocating 5.38% of GDP, Latvia 4.91% of GDP, and Estonia planning over €10 billion in hardware investment through 2029. EU SAFE financing and NATO capability expansion programmes are driving an unprecedented procurement cycle across the region — making the Baltics one of the fastest-growing defence markets in Europe.

Does ECOVIS ProventusLaw advise across all three Baltic states?

Yes — one coordinated regional team across Lithuania, Latvia and Estonia for multi-jurisdictional defence and security mandates.