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At today’s sitting, the Riigikogu heard the report by Minister of Finance Mart Võrklaev on the implementation of the long-term national development strategy “Estonia 2035” and concluded the second reading of a Bill enabling the use of Russia’s assets frozen under international sanctions.

Speaking to the Riigikogu, Võrklaev said that Estonia’s fiscal policy had consistently been geared towards sustainability and macroeconomic rebalancing, creating an environment conducive to long-term development. “Unfortunately, the decades worth of sustainable fiscal policy has started to go off track. In the good years of economic growth, the budget was run into deficit. That would have been the time to improve the budgetary position and build up reserves. In addition, the focus has only been on incurring new expenditure,” he said.

According to Võrklaev, Estonia has been hit by a series of crises, and for two years now the people of Ukraine have been fighting off attacks from their aggressive neighbour Russia. “The combination of all of the above has led to a difficult situation for the Estonian state budget. Reducing the deficit and returning to a fiscally sustainable path will be crucial to achieving the country’s longer-term goals,” he said. He added that the Government’s fiscal stimulus had helped the economy to weather the downturn years better, but without implementation of measures to reduce budget deficit the deficit would widen further in the coming years and the general government debt burden would continue to grow rapidly.

According to the Minister, moving to a more sustainable path with the state budget will also play a particularly significant role in the implementation of the long-term national development strategy “Estonia 2035″. “If we do not use taxpayers’ money responsibly now, it will also hamper our long-term development and the realisation of our goals. Responsible use of money will go hand in hand with making the state more efficient, which, among other things, will reduce bureaucracy and bring the state closer to citizens and businesses,” Võrklaev said. In addition to the annual report, he also gave an overview of the development trends in the civil service.

During the debate, Urmas Reinsalu from Isamaa Parliamentary Group, Madis Kallas from the Social Democratic Party Group and Maris Lauri from the Reform Party Group took the floor.

The Riigikogu passed a Resolution

The Riigikogu passed with 46 votes the Resolution of the Riigikogu “Appointment of the Representative of Estonia to the Control Committee of the Nordic Investment Bank” (403 OE), submitted by the Finance Committee, under which Chairman of the Finance Committee Annely Akkermann was appointed as the representative of Estonia to the Control Committee of the Nordic Investment Bank  from 1 June this year to 31 May 2026.

The Control Committee is responsible for the audit of the accounting records of the bank and submits the annual auditor’s report to the Board of Governors of the bank. Member of the Riigikogu Aivar Kokk has been representing Estonia in the committee since 1 June 2019.

Five Bills passed the second reading

The Bill on Amendments to the International Sanctions Act and Amendments to Other Associated Acts (332 SE), initiated by the Government, passed the second reading in the Riigikogu. It will create a national mechanism to ensure the financial liability of an aggressor state for damage caused by the most serious violations of international law. The amendment will enable the use of assets of individuals and companies that have contributed to Russia’s wrongful acts, which have been frozen under sanctions, as an advance payment for damages owed by Russia to Ukraine. In addition, the Bill will specify the competences of state agencies in the implementation of international sanctions and will provide them with clearer legal bases for the implementation of sanctions and for supervision.

Before the second reading, the Constitutional Committee had incorporated seven motions to amend into the Bill, including an amendment according to which the Ministry of Foreign Affairs would decide on the use of the assets as an advance payment for compensation for damage in the course of administrative procedure. According to the initial wording, it would have been necessary to apply for authorisation from administrative court to use the assets.

According to the Bill, a decision on the use of assets as an advance payment for compensation for damage can be made where damage has been caused by a wrongful act and the damage has been proved and must be compensated for under international law, and the foreign state that has sustained damage has submitted a relevant claim to the foreign state that has caused the damage, and the state that has caused the damage has not met the claim within a reasonable period of time. In order to launch proceedings on the use of assets in Estonia, a relevant request will have to be submitted to Estonia and the conditions for the use of the assets as an advance payment for compensation for damage and for assigning the right of claim to the owner of the assets will have to be agreed upon with the state that has submitted the request. In addition, the link between the owner of the assets and the wrongful act must be sufficiently proven.

Under the amendments to the Bill, the Ministry of Foreign Affairs will have to determine all the facts and ownership relations relating to the assets and make sure that there are no exceptional circumstances that would make the individual’s interests outweigh the need to apply the measure. The owner of the assets would have the right to contest a decision on the use of the assets in administrative court.

During the debate, Anti Allas from the Social Democratic Party Group, Kalev Stoicescu from Estonia 200 Parliamentary Group, Urmas Reinsalu from Isamaa Parliamentary Group, Marko Mihkelson from the Reform Party Group and Henn Põlluaas from the Estonian Conservative People’s Party Group took the floor.

The Estonian Conservative People’s Party Group moved to suspend the second reading of the Bill, but the motion was not supported. Seven members of the Riigikogu were in favour of suspension and 49 were against.

The Bill on the Protection of Persons Who Report Work-related Breaches of Union Law (257 SE), initiated by the Government, passed the second reading in the Riigikogu. Its aim is to ensure protection to whistleblowers who report breaches of EU law that become known to them in the course of their work-related activities. The Bill will create a minimum framework for receiving reports of breaches of the requirements arising from EU law, for follow-up and giving feedback, and for the protection of whistleblowers. The purpose of the Bill is to respond as promptly and effectively as possible to acts that are in conflict with EU law.

The Bill will provide for the conditions and extent of the protection of whistleblowers. The new regulation will provide for the ways and channels of reporting and will determine when, to what extent and under what conditions whistleblower protection will apply. According to the Bill, state and local government agencies and the agencies administered by them as well as enterprises having 50 or more workers will have an obligation to establish a reporting channel for reporting breaches of EU law.

A person who reports will qualify for the protection if he or she has reasonable grounds to believe that a breach has been directly commenced or it has been concluded, the breach falls within the scope of the Act and the reporting takes place in accordance with the Act. The enjoyment of the protection will not depend on the motivation of the whistleblower or whether they act in public interests. In particular, it will be necessary that breaches of the requirements arising from EU law in specific areas be reported, that reports be first made internally or to the competent authority and that the whistleblower have grounds to believe that the information is true.

The EU Whistleblower Protection Directive, which the Bill transposes, had to be transposed by Member States by December 2021. The Bill is planned to enter into force on 1 September this year.

During the debate, Liisa Pakosta from Estonia 200 Parliamentary Group, Henn Põlluaas from the Estonian Conservative People’s Party Group, Anastassia Kovalenko-Kõlvart from the Centre Party Group and Helir-Valdor Seeder from Isamaa Parliamentary Group took the floor. Unaffiliated Member of the Riigikogu Kalle Grünthal also took the floor.

The Estonian Conservative People’s Party Group, the Centre Party Group and Isamaa Parliamentary Group moved to suspend the second reading of the Bill, but the plenary did not support the motion. 18 members of the Riigikogu supported suspension and 50 voted against.

The Bill on Amendments to the Food Act (378 SE), initiated by the Government, passed the second reading. It will make amendments of a technical nature in order to ensure that the Act is in better compliance with EU law.

The Bill will repeal the provision delegating authority regarding the procedure for regulating state supervision of contaminants in food of animal origin because this is regulated by EU Regulations. Provision is also made for the possibility to outsource the service of an accredited laboratory if the laboratory is located in another EU Member State or in a country that is a contracting party to the European Economic Area. In addition, application for an authorisation concerning the treatment of foodstuffs with ionising radiation will be specified.

The Bill on Amendments to the State Budget Act (391 SE), initiated by the Finance Committee, passed its second reading. It will increase the role of the Riigikogu in making budgetary decisions of constitutional institutions and will avoid a situation where the Government decides on the funding of the independent institutions whose task is to independently control and balance the activities of the executive.

The Bill will create the basis for the budget requests of constitutional institutions to be approved by the Finance Committee of the Riigikogu before a draft state budget is initiated in the Riigikogu. The Government will continue to have the right and obligation to assess the budget request of a constitutional institution. Constitutional institutions will submit budget requests in full to the Finance Committee and the Ministry of Finance, and in the event of disagreements, the Government will submit a dissenting opinion, with justification, to the committee. The resolution of the Finance Committee and the budget requests of constitutional institutions will be annexed to the explanatory memorandum to the draft state budget.

Before the second reading, the Finance Committee had made an amendment to the Bill under which the committee would take into account the macro-economic forecast when approving the budget volumes of constitutional institutions.

According to the Constitution, the Riigikogu, the President of the Republic, the National Audit Office, the Chancellor of Justice, and the Supreme Court, as constitutional institutions, are independent in their activities. According to the initiators, independence, as the basis of a democratic state based on the rule of law and the guarantor of the separation of powers, means, in the most general sense, that constitutional institutions must be free from pressure from other branches of government, in particular the executive, in the performance of their functions.

Jaak Aab took the floor on behalf of the Social Democratic Party Group in the debate.

The Bill on Amendments to the Act on Introduction of Euro and to Other Associated Acts (399 SE), initiated by the Government, also passed the second reading. It will establish mandatory rounding rules for one- and two-cent euro coins in cash settlements. This means that, in the case of cash payments, the merchant will have an obligation to round the cost of the shopping basket up or down to the nearest five cents. The final purchase amounts ending in one, two, six or seven euro cents will be rounded down and amounts ending in three, four, eight and nine euro cents will be rounded up.

The amendment will reduce the need to produce more one- and two-cent coins. At present people receive such coins as change in shops but they make very little use of them themselves when buying. As a result, most coins fall out of circulation and the need to produce more arises. However, the production and handling costs of low denomination coins are disproportionately high compared to their value and the environmental impact of their production and handling is high.

Four Bills passed the first reading

The Bill on Amendments to the Motor Insurance Act and Amendments to Other Associated Acts (400 SE), initiated by the Government, passed the first reading in the Riigikogu.  It will transpose into Estonian law the amendments to the EU Motor Insurance Directive.

According to the Bill, personal light electric vehicles with a maximum design speed of more than 25 km/h, or a maximum net weight of more than 25 kg and a maximum design speed of more than 14 km/h will have to be insured. Any vehicle moving on land propelled solely by an engine will have to be insured. A derogation will be made for motorised wheelchairs and vehicles used only in confined areas, such as lawn tractors. In order to make it easier to understand whether compulsory motor insurance cover extends to a vehicle or not, the Estonian Motor Insurance Bureau is planning to publish help material online.

In addition to the requirement to insure personal light electric vehicles, Estonian law will transpose the principle that, in the event of the bankruptcy of an insurance company, each Member State must have a guarantee fund to compensate damages instead of the insolvent company. In Estonia, the Estonian Motor Insurance Bureau is going to be the fund and collect funds from insurance companies to cover insolvency.

The Bill will also raise the limits of maximum amounts of insurance cover that are compensated: from 1.2 million euro to 1.3 million euro in the event of damage to property and from 5.6 million euro to 6.45 million euro in the event of personal injury. According to the explanatory memorandum to the Bill, the average damage to property in Estonia is around 2,200 euro and personal injury 4,200 euro. The greatest motor insurance damage ever in Estonia occurred in 2018, amounting to 5.6 million euro, 5.4 million euro of which was personal injury.

The Bill on Amendments to the Foreign Relations Act and Amendments to Other Associated Acts (385 SE), initiated by the Government, passed the first reading. It will simplify the procedure of the preparation and conclusion of treaties. The largest amendment proposed will concern the submission of the materials of treaties to the Ministry of Foreign Affairs and the proceedings on amendments to treaties at various levels. Amendments are also planned to the procedure for the enforcement of treaties, for making objections concerning reservations and declarations and for the suspension and the termination of the suspension of treaties.

The Bill will also organise the provisions delegating authority contained in the Foreign Relations Act, including the provisions delegating authority regarding the establishment of databases and will complete data protection reform. The Bill will establish no new databases, nor will it change the functioning of any existing ones, or issues relating to the data processed in them.

The Bill on Amendments to the Security Activities Act (413 SE), initiated by the Legal Affairs Committee, passed the first reading. Its aim is to resolve the shortcomings identified in the Security Activities Act due to enter into force on 1 July this year. The Bill will omit from the scope of application of the Act the internal security organisers who have not hired a security guard or a security firm but use only technical means and their own staff to guard their property. According to an amendment, in the future, they will not have to meet the same requirements as security firms, including the requirement to have completed specialised training.

Under another amendment, the current procedure will remain in place where security firms must store for one month the recordings of the technical means used when guarding and protecting the object to be secured and when maintaining order. The Act due to enter into force this summer contains a provision that would require recordings to be stored for six months. According to an amendment, the six-month storage obligation will remain in place only for the cases where an act containing elements of offence is identified when processing the recording.

In addition, the Bill will introduce in the Act a specifying provision establishing an explicit requirement for security officers to complete, in addition to continuing training, studies for either guard, security guard or security manager, respectively.

The Bill on Amendments to the Municipal Council Election Act (387 SE), initiated by Isamaa Parliamentary Group, passed the first reading in the Riigikogu. It is intended to revoke the right to vote in municipal council elections for third-country nationals and stateless persons residing in Estonia. At present, the right to participate in local elections extends to aliens who reside in Estonia on the basis of a long-term residence permit or the permanent right of residence, who have attained 16 years of age by the election day and the address details of whose permanent place of residence have been entered in the Estonian population register. According to the Bill, only citizens of Estonia and the EU would be able to participate in local elections.

In the initiators’ words, third-country nationals’ right to vote in local elections in Estonia has become a security issue, especially within the context of the Russian war of aggression against Ukraine and therefore it should not be possible for citizens of Russia and Belarus to participate in municipal council elections.

During the debate, Vadim Belobrovtsev from the Centre Party Group took the floor.

The Centre Party Group moved to reject the Bill at the first reading, but the motion was not supported. Three members of the Riigikogu supported rejection and 40 voted against.

Three drafts were dropped from the proceedings

The Riigikogu rejected the Draft Resolution of the Riigikogu “Making a proposal to the Government of the Republic on the establishment of a temporary solidarity tax for the banking sector” (367 OE), submitted by the Centre Party Group, which was intended to make a proposal to the Government to establish a temporary solidarity tax for the Estonian banking sector with a rate of 50 per cent of the annual profit of the bank. According to the proposal, the tax would have been in place in 2024–2027 and the funds collected with it could have been used to fund social and educational projects as well as infrastructure and environmentally sustainable initiatives in Estonia.

During the debate, Lauri Laats from the Centre Party Group, Tarmo Tamm from Estonia 200 Parliamentary Group and Rain Epler from the Estonian Conservative People’s Party Group took the floor.

At the final vote, 14 members of the Riigikogu were in favour of the draft Resolution. A majority of the votes of the membership of the Riigikogu, that is, at least 51 votes, would have been needed for the Resolution to be passed.

The Riigikogu rejected the Bill on Amendments to the Security Authorities Act (330 SE), initiated by the Estonian Conservative People’s Party Group,  which was intended to give the Military Intelligence Centre of the Defence Forces the status of a security authority in order to ensure effective functioning of the intelligence and counter-intelligence of the Defence Forces in the   deteriorated security situation.

Leo Kunnas from the Estonian Conservative People’s Party Group took the floor during the debate.

41 members of the Riigikogu supported the motion of the Constitutional Committee to reject the Bill at the first reading and three voted against it.

The Riigikogu also rejected the Bill on Amendments to the Police and Border Guard Act (370 SE), initiated by Member of the Riigikogu Kalle Grünthal, which was intended to amend the text of the oath of office of police officer.

40 members of the Riigikogu supported the motion of the Legal Affairs Committee to reject the Bill at the first reading and three were against it.

The sitting ended at 10.14 p.m.

Photos (Author: Erik Peinar / Chancellery of the Riigikogu)

Verbatim record of the sitting (in Estonian)

Video recording will be available to watch later on the Riigikogu YouTube channel.

Riigikogu Press Service
Karin Kangro
+372 631 6356, +372 520 0323
[email protected]
Questions: [email protected]

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