In late August 1941, after the invasion of the Soviet Union, he was transferred to the "Landeswehr" Battalion 898 in Vilnius, then part of the Reichskommissariat Ostland German occupation zone. Schmid was reassigned to an office called Feldkommandantur 814, whose personnel were charged with collecting German soldiers who had been separated from their units and reassigning them. Although Schmid interrogated the soldiers strictly, he sympathized with them—many were in fact suffering from combat fatigue—and avoided charging them with military offenses such as desertion or cowardice in the face of the enemy, which could have resulted in a death sentence.