The Riigikogu passed with 89 votes in favour the Bill on Amendments to the Energy Sector Organisation Act (48 SE), initiated by the Government. It eliminates the unjustified specification due to which the Energy Sector Organisation Act that is in force in Estonia is in conflict with the relevant European Union’s Energy Efficiency Directive. The conflict was due to the provision in the Act under which distribution system operators who were large undertakings, and transmission system operators were not required to prepare regular energy audits. With the elimination of the specification, Elektrilevi OÜ and Port of Tallinn Ltd will also have to carry out energy audits in the future.
The Resolution of the Riigikogu “Extension of the Time Limit for the Use of the Defence Forces in the Fulfilment of the International Commitments of the Estonian State in the UN Peacekeeping Mission in Lebanon” (63 OE), submitted by the Government, was passed with 76 votes in favour. It allows to contribute with up to three servicemen to the United Nations (UN) mission UNIFIL (United Nations Interim Force in Lebanon).
UNIFIL is mandated to monitor the cessation of hostilities, support the Lebanese armed forces in the South of Lebanon, and to co-ordinate these activities with the Governments of Lebanon and Israel. UNIFIL is also mandated to extend its assistance to help ensure humanitarian access to civilian populations and the voluntary and safe return of displaced persons.
Estonia participated in UNIFIL in 1996–1997, when it contributed with a peacekeeping company (135 servicemen). From spring 2015 to autumn 2018, Estonia contributed to UNIFIL with an infantry platoon and a support element – 38 servicemen in total – in the composition of the Irish-Finnish joint battalion. As of autumn 2018, Estonia is contributing with a staff officer at the mission headquarters in Naqoura. In 2020, Estonia will continue to contribute to UNIFIL with up to three servicemen.
The Resolution of the Riigikogu “Extension of the Time Limit for the Use of the Defence Forces in the Fulfilment of the International Commitments of the Estonian State in the European Union Military Mission EUNAVFOR Med/Sophia” (64 OE), submitted by the Government, was passed with 67 votes in favour. It allows to contribute with up to six servicemen to operation EUNAVFOR Med/Sophia.
The mission of EUNAVFOR Med/Sophia is to deter illegal migration in the Mediterranean, and to assist in the capacity building and training of the Libyan Coast Guard and navy. Also, information on crude oil illicitly exported from Libya is gathered, and information exchange between the EU Member States, FRONTEX and EUROPOL regarding human trafficking is enhanced. When the operation’s mandate was last extended in March 2019, the participation of ships in the operation was terminated, whereby the actual capacity to save lives in the Mediterranean was lost.
By participating in the operation, Estonia contributes solidarily with other Member States to the EU military operation which helps prevent Europe-bound illegal migration. The participation also increases Estonia’s foreign policy visibility and gives Estonian servicemen an opportunity to obtain diverse experiences in the operation.
The Resolution of the Riigikogu “Extension of the Time Limit for the Use of the Defence Forces in the Fulfilment of the International Commitments of the Estonian State in the North Atlantic Treaty Organization Mission in Iraq” (65 OE), submitted by the Government, was passed with 61 votes in favour. It provides for continuing participation in the NATO mission NMI in Iraq with up to five servicemen. At the NATO summit in Brussels in July 2018, a new training mission was launched to help Iraq develop its capacity to build more sustainable, transparent, inclusive and effective national security structures and professional military education institutions, through the formation of a self-sustaining cadre of Iraqi instructors.
The Resolution of the Riigikogu “Extension of the Time Limit for the Use of the Defence Forces in the Fulfilment of the International Commitments of the Estonian State in the International Military Operation “Inherent Resolve”” (66 OE), submitted by the Government, was passed with 62 votes in favour. The Resolution provides for continuing participation in the international military operation “Inherent Resolve” with up to 20 servicemen. The aim of the operation is direct and supporting military action against ISIL, in the first place in Iraq and Syria. An important task of the operation is the training of the Iraqi security forces. The US-led international military operation “Inherent Resolve” against ISIL was launched on 15 June 2014. Estonia began its participation in the operation in August 2016.
The Resolution of the Riigikogu “Extension of the Time Limit for the Use of the Defence Forces in the Fulfilment of the International Commitments of the Estonian State in the Post-Conflict Peacekeeping Mission in Lebanon, Israel, Egypt and Syria” (67 OE), submitted by the Government, was passed with 56 votes in favour. The Resolution allows to contribute with up to six servicemen to the United Nations (UN) peacekeeping mission in the Middle East.
UNTSO (United Nations Truce Supervision Organization) is the first UN peacekeeping mission that is purely an observation mission. The military observers participating in the mission are unarmed and their task is to observe adherence to peace agreements and armament agreements in the Middle East, thereby preventing escalation of conflicts.
The Estonian military observers have been participating in the membership of the UNTSO mission since 1997. As of 2014, Estonia’s contribution to the mission was increased to up to six servicemen with a Resolution of the Riigikogu. They man the posts of military observer and Senior Staff Officer.
The Resolution of the Riigikogu “Use of the Defence Forces in the Fulfilment of the International Commitments of the Estonian State in Another International Military Operation Led by the North Atlantic Treaty Organization or its Member State, the European Union or the United Nations upon the First Contribution thereto” (68 OE), submitted by the Government, was passed with 61 votes in favour. The Resolution provides for the use of up to 50 servicemen under subsection 34 (1) of the National Defence Act. According to it, the Riigikogu determines by a resolution for each year the limit number of servicemen who may participate in another international military operation led by the North-Atlantic Treaty Organisation (NATO) or a member state thereof, the European Union (EU) or the United Nations (UN), upon contributing thereto for the first time. The exact contribution of Estonia and the amount will depend on the needs of a specific operation, and it will be decided under the general procedure under subsection (1) of the abovementioned section.
Conflicts and crises in various regions of the world may escalate unexpectedly and quickly, and if necessary Estonia must be capable of deploying defence forces units to crisis and conflict regions quickly and flexibly in order to ensure international stability and in this way to also protect Estonia’s security interests. The draft Resolution will create the possibility to respond flexibly to rapidly escalating situations that do not fall under other exemptions allowing rapid response (e.g. participation in the NATO response force) provided for in the National Defence Act.
The Resolution of the Riigikogu “Use of the Defence Forces in the Fulfilment of the International Commitments of the Estonian State in the Composition of the North Atlantic Treaty Organization Response Force” (69 OE), submitted by the Government, was passed with 54 votes in favour. It allows to contribute with up to 210 servicemen to the composition of the North Atlantic Treaty Organization (NATO) Response Force.
The establishment of the NATO Response Force (NRF) was decided at the Prague Summit in 2002. The NRF is a high-readiness unit capable of conducting military operations anywhere in the world. The NRF has a key role in launching NATO’s short-notice collective defence operations. Overall command of the NRF belongs to the Supreme Allied Commander Europe (SACEUR). The decision to deploy the NRF is taken by the North Atlantic Council. Ensurance of full manning of the NRF is directly in Estonia’s national interests because the NRF ensures NATO’s commitment to deterrence and collective defence.
The Resolution of the Riigikogu “Extension of the Time Limit for the Use of the Defence Forces in the Fulfilment of the International Commitments of the Estonian State in the European Union Training Mission and the UN Peacekeeping Mission in Mali” (70 OE), submitted by the Government, was passed with 53 votes in favour and 4 against. It allows to contribute with up to ten servicemen to the European Union Training Mission in Mali, and with up to ten servicemen to the United Nations (UN) peacekeeping mission in Mali.
The Council of the European Union established the training mission EUTM Mali (European Union Training Mission in Mali) in Mali by decision 2013/34/CFSP of 17 January 2013. This mission has become one of the most important military missions of the European Union. Together with Estonia, 27 countries, including 22 European Union Member States, contribute to it with around 600 troops.
The participation of Estonian servicemen in UN operations helps strengthen Estonia’s contribution to UN activities in securing peace and increases the visibility of Estonia in the UN. Estonia’s contribution to the EUTM Mali mission is important because it is one of Estonia’s aims to actively participate in the implementation of the European Union’s Common Security and Defence Policy. With its participation in the missions, Estonia contributes to the common fight against the threats affecting Europe, including the fight against terrorism and the resolution of immigration issues.
The objective of EUTM Mali is to support the development of the military capability of the Malian Armed Forces and to improve the security situation in Mali. In addition to that, it supports achievement of political stability and implementation of the Algiers peace agreement. EUTM Mali supports the Sahel region more broadly by improving the operational capability of the G5 Sahel Joint Force and enhancing regional cooperation, focusing primarily on common security threats, in particular terrorism and human trafficking.
On 25 April 2013, the peacekeeping mission MINUSMA (United Nations Multidimensional Integrated Stabilization Mission in Mali) was established by a UN Security Council Resolution. The strategic aim of MINUSMA is to support the implementation of the Agreement on Peace and Reconciliation in Mali concluded in 2015 by directing its efforts increasingly to supporting political dialogue and the restoration of state authority in central Mali where violence has increased. Another strategic aim of the UN mission is to facilitate the implementation of Mali’s broad strategy in order to protect civilians, reduce intra-community violence and ensure the provision of the main public services particularly in central Mali.
The Resolution of the Riigikogu “Use of the Defence Forces in the Fulfilment of the International Commitments of the Estonian State in the Composition of the United Kingdom’s Joint Expeditionary Force” (71 OE), submitted by the Government, was passed with 64 votes in favour. It provides for participation in the composition of the United Kingdom’s Joint Expeditionary Force (JEF) with up to 24 servicemen. The JEF is a coalition of the willing, initiated, owned and led by the United Kingdom, with membership of other countries. JEF brings together like-minded countries who share a common sense of danger and who are generally ready to contribute to operations quickly and flexibly.
The Resolution of the Riigikogu “Extension of the Time Limit for the Use of the Defence Forces in the Fulfilment of the International Commitments of the Estonian State in the Training and Advisory Mission in Afghanistan” (72 OE), submitted by the Government, was passed with 63 votes in favour. The Resolution provides for continuing participation in the NATO-led training and advisory mission in Afghanistan with up to 46 servicemen. The activities of the mission are directed at the ministries and security forces connected with Afghanistan’s security issues, focusing on the higher-level command of the army and police. Estonia has participated in the ISAF (International Security Assistance Force) operation in Afghanistan for 11 years (2003−2014) and is participating in the RSM (Resolute Support Mission) starting from 2015, and is planning to continue meeting its Alliance commitments in the NATO-led training and advisory mission in the current extent. By contributing to the largest ongoing NATO’s military operation, Estonia helps improve the international security situation.
The Riigikogu also passed the Resolution of the Riigikogu “Extension of the Time Limit for the Use of the Defence Forces in the Fulfilment of the International Commitments of the Estonian State in France’s Military Operation Barkhane in Mali” (73 OE), submitted by the Government, which allows to contribute with up to 95 servicemen to France’s military operation “Barkhane” in Mali.
60 members of the Riigikogu voted in favour of the passage of the Resolution and 4 were against. One member of the Riigikogu abstained.
Operation Barkhane is a France-led independent international military operation in the Sahel region (Burkina Faso, Mali, Mauritania, Niger, and Chad) and France’s largest foreign military operation (4,500 troops). The strategic aim of the operation is to manage the global problems, and in particular the problems relating to Europe, such as terrorism and illegal immigration, arising from the Sahel region. The final aim of the operation is to stabilise the situation in the region, with military operations, to the extent that will allow the authorities of the local countries to ensure the security situation independently. Operation Barkhane also supports the governments of the countries in the region in the establishment domestic stability.
The cooperation within the framework of operation Barkhane has further strengthened the strategic allied relationship and the military cooperation between Estonia and France. The cooperation of the defence forces units of the two countries in the ongoing military operation has increased the interoperability between the units. In view of the ongoing good cooperation, France has made a proposal to Estonia to increase Estonia’s contribution to operation Barkhane and to jointly start cooperation between special operations units in the training of the Malian armed forces. A similar cooperation proposal has been made to other countries, including the Nordic countries. In addition, Estonia wishes to give additional capabilities to the infantry platoon operating within the framework of operation Barkhane so that the unit could carry out its tasks independently within the framework of force protection.
It is an Estonia’s defence policy interest to support a stable security environment globally, and solidary contribution of the European countries in the fight against the threats affecting Europe, in their place of origin where possible. Contribution to Operation ‘Barkhane’ also helps deepen the strategic relationship between Estonia and France which is based on a common understanding of the security environment and the threats affecting it, besides a shared value space. France also actively participates in the strengthening of NATO’s deterrence posture, contributing with its units to enhanced allied presence in the Baltic states, including Estonia.
Two Bills passed the second reading in the Riigikogu:
The Bill on Amendments to the Maritime Safety Act (47 SE), initiated by the Government, will transpose into Estonian law the relevant European Union directives which aim to update and harmonise the safety standards for passenger ships. The Bill is intended to improve the safety of and rescue opportunities for passengers and crew members on passenger ships. It is also intended to ensure that search and rescue and the activities in the aftermath of a potential accident would be more effective, and that the competent authorities have operational information on persons on board. In addition, the mandatory inspections of ro-ro passenger ships and high-speed passenger craft will be harmonised and duplicate procedures for inspections will be reduced.
The Bill will provide for an obligation to communicate the number of persons on board a passenger ship to the Electronic Maritime Document Exchange. Passenger ships that make regular voyages of over 20 nautical miles and that are not exempt from the relevant obligation under the Maritime Safety Act also forward the list of persons on board the passenger ship to the Electronic Maritime Document Exchange. The obligation of the ship operator to maintain a register of persons will be omitted from the Bill.
The Bill concerns the passenger ship owners and operators whose vessels engage in regular service and call at Estonian ports. In addition, the Bill concerns the work of the officials and inspectors of the supervision department of the Maritime Administration. The Bill also concerns all undertakings whose passenger ships are engaged in regular services both within Estonia and to other European Union and foreign ports.
The lead committee proposed four motions to amend. One of them amends the Bill by adding amendments to the Railways Act that concern in particular the postponement of the deadline for the implementation of rail passengers’ rights and obligations by five years.
During the debate, Jüri Jaanson (Reform Party), Kalvi Kõva (Social Democratic Party) and Annely Akkermann (Reform Party) took the floor. The latter, on behalf of the Reform Party Faction, moved to suspend the second reading of the Bill. 31 members of the Riigikogu voted in favour of the motion and 49 were against. Thus, the motion was not supported and the second reading of the Bill was concluded.
The Bill on Amendments to the Securities Market Act and Other Acts (28 SE), initiated by the Government, will transpose into Estonian law the relevant European Union directive on shareholders’ rights which aims to promote communication between listed companies and shareholders. The directive concerns only companies whose shares are traded on a stock exchange.
The Bill will increase shareholders’ opportunities to shape the policy of remuneration of board members of listed companies. Material changes to the remuneration policy will have to be submitted to a vote by the general meeting at least every four years. In addition, the company will have to publish an annual report on the remuneration of directors including the data on the remuneration of individual directors on its website.
The amendments will improve the possibilities of listed companies to identify their shareholders, in particular larger shareholders who hold more than 0.5 per cent of the company’s shares and who hold their shares in nominee accounts. A nominee account is an account operated by an intermediary created for the purpose of holding shares on behalf of another person. For example, a bank may hold the shares of its client on a bank’s account.
When the amendments enter into force, management companies will also have to begin to disclose on their websites an engagement policy and, on an annual basis, how it has been implemented. An engagement policy describes how their investment strategy is consistent with the implementation of shareholders’ rights upon investment into companies. It will have to be pointed out how investee companies’ strategy, financial performance, risks, governance and other relevant matters are monitored.
The Bill also concerns the European Union’s prospectus regulation which regulates the requirements for the prospectus for an offer of securities to the public. On the basis of a prospectus, investors can decide whether to invest in the securities offered. According to the Bill, in the future, a prospectus could be drawn up according to the requirements set out in a regulation of the Minister of Finance if the offer of securities to the public remains below 8 million euro. At present, the threshold is five million euro. The prospectus of an offer exceeding the threshold will have to be drawn up according to the stricter requirements of the European Union’s prospectus regulation. In the case of an offer of securities to the public which remains below 2.5 million, the company will not have to draw up a prospectus.
The lead committee proposed thirteen motions to amend the Bill. The motions regulate the compensation obligation related to the prospectus for an offer of securities to the public and the extent of the obligation, and the language in which documents of offers are drawn up. Members of the supervisory boards of companies will be omitted from the definition of ‘manager of a listed company’. The principles for remuneration of the management of a listed company will be regulated. According to a proposal, the amendments will be applied from the financial year of a listed company beginning after 31 December 2020.
The motions to amend will also specify the definition of payment system and the rules concerning the finality of settlements made within the framework of the system. The order of satisfaction of claims in the event of bankruptcy of a credit institution, the making of payments through a central depository and the submission of data to the registrar will also be amended.
Aivar Kokk (Isamaa) took the floor during the debate.
Two Bills passed the first reading in the Riigikogu:
With the Bill on the Ratification of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (88 SE), initiated by the Government, the opportunities for residents of Estonia to avoid taxation of incomes earned as well as the opportunities for non-residents to use Estonia for tax avoidance will be reduced.
The purpose of the convention developed by the OECD is to deter the use of tax schemes that enable cross-border optimization of taxes by taking advantage of gaps and discords in national tax systems. Through the convention, it is possible for countries to bring their tax agreements all at once into conformity with the minimum standard agreed upon in the OECD.
Estonia signed the convention on 29 June 2018. 89 countries have signed the convention by now. With the convention, Estonia will cover all tax agreements it has ratified. In total, the convention will amend 58 tax agreements of Estonia.
The tax agreements negotiated by Estonia after 2016 already meet the standard provided for in the convention. Of these agreements, at present, the agreement with Japan has entered into force. Agreements with Hong Kong, Pakistan, Mauritius and Guernsey have been initialled.
The purpose of the Bill on the Ratification of the Agreement between the Government of the Republic of Estonia and the Government of the Hong Kong Special Administrative Region of the People’s Republic of China for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance and the Protocol thereto (93 SE), initiated by the Government, is to facilitate investments between the Contracting Parties.
The agreement provides greater legal certainty to investors, as compared with a national legislative act, with regard to the elements of the tax system that are regulated by the agreement, because amendment of a bilateral international agreement is generally more time-consuming than amendment of a national legislative act. To achieve this aim, the agreement limits the income taxes that the country of the source of income can establish for the residents of the other country, ensures equal treatment of persons and eliminates potential double taxation. The obligation of mutual exchange of information provided for in the agreement creates additional possibilities for prevention of tax evasions.
The Government approved the agreement and the protocol thereto at its sitting on 12 September 2019 and authorised the Minister of Finance to sign the agreement and the protocol. The agreement and the protocol were signed in Tallinn on 25 September 2019.
The Hong Kong Special Administrative Region is a part of the People’s Republic of China which enjoys a high degree of autonomy. It has its own legislative council and the passage of tax legislation is within its competence. In the case of the Hong Kong Special Administrative Region, the principle of “one country, two systems” is implemented. Under the Basic Law, the Hong Kong Special Administrative Region is responsible for its domestic affairs and foreign relations while the Government of the People’s Republic of China is responsible for foreign and defence policy.
In general lines, the agreement between Estonia and Hong Kong is based on the model agreement drawn up by the Organisation for Economic Co-operation and Development. Estonia has concluded the agreements for the elimination of double taxation with 59 countries.
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