Riigikogu gave greater protection to takers of housing loans
The Riigikogu increased the protection of takers of housing loans with amendments to the Law of Obligations Act which establish an obligation to provide more information on a housing loan agreement to the consumer.
The Riigikogu passed with 81 votes in favour the Act on Amendments to the Law of Obligations Act and Amendments to Other Associated Acts (152 SE), initiated by the Government, which transposes the EU mortgage credit directive and harmonises the regulation of housing loans. The amendments arising from the Act concern all loan agreements the aim of which is the purchasing of a registered immovable, those secured by a mortgage as well as those unsecured.
In addition to housing loans granted by banks, the amendments also concern consumer credits granted by smaller loan offices. In the future, a creditor will have to notify of the basic content of a housing loan agreement and the possibilities related thereto as general information on its website.
Heljo Pikhof, who took the floor on behalf of the Social Democratic Party Faction in the debate, said that taking a housing loan is one of the most important consumer credit decisions that people make during their lives, and the consumer binds himself or herself for a significantly longer period with that, in comparison to other consumer credits. Pikhof said that this Act is important in order to ensure necessary consumer protection in this field.
The Act imposes an obligation on lenders to provide general information on loan agreements relating to residential immovable property. Also, more thorough pre-contractual information will have to be provided to the consumer before the conclusion of an agreement in order that he or she could make the decision to conclude the agreement with maximum consideration and bearing in mind all important circumstances related to the agreement.
The Act gives borrowers the right to withdraw from a consumer credit contract secured by a mortgage within seven days. So far there was no such possibility. In her speech, Pikhof said that, although the possibility to withdraw will slow down civil turnover, as loan money will not be received before seven days have passed from the conclusion of the agreement, it is nevertheless expedient in terms of consumer protection.
The Act also specifies the current regulation of responsible lending. The Act provides that a loan agreement may be concluded only in the case when the consumer is creditworthy. If a bank violates the obligation of due diligence in the assessment of a consumer’s creditworthiness, the contractual interest rate will automatically fall to the interest rate provided for by law which is 0.05 per cent at present. Pikhof stressed that this will not extend to cases where the consumer has knowingly submitted false information to the bank.
The Riigikogu passed four other Acts and a Resolution today.
The Riigikogu passed with 79 votes in favour the Act on Amendments to the Estonian Defence League Act and the Military Service Act (153 SE), initiated by the Government, which enables the medical commissions within the area of government of the Ministry of Defence to obtain the data necessary for health tests of call-up selectees directly from e-health if they have given their consent thereto.
In the future, the medical commissions will obtain the data necessary for health tests of persons liable to national defence obligation directly from e-health, and they in turn will be able to enter the results of their tests and diagnoses into the system. All information relating to health will be available in one place for servicemen and call-up selectees.
An amendment also amends the procedure for granting staff accommodation to servicemen. The definition of staff accommodation and the conditions for determining the rent for the use thereof were included in the Act. Accommodation of servicemen during the performance of their duties or a training is differentiated from the procedure for granting the use of staff accommodation to servicemen. Active servicemen are provided temporary accommodation in a barrack during the time they work in the military zone of the Defence Forces, similarly to reservists and conscripts.
An exemption concerning the working during the provision of host nation support in international military cooperation is included in the exemptions of working time and rest period applicable to servicemen. According to the Act, longer working days may be imposed on active servicemen within the framework of international military cooperation when host nation support is provided to the armed forces of an allied country.
The Riigikogu passed with 82 votes in favour the Act on Amendments to the Identity Documents Act (55 SE), initiated by Andres Ammas, Henn Põlluaas, Jaak Aaviksoo, Kristjan Kõljalg, Mihhail Stalnuhhin and Tanel Talve, which extends the maximum period of validity of the Estonian citizen’s passport and an alien’s passport from five years to ten years. The aim of the Act is to reduce the expenses and frequency of acts connected with the issuing of passports. The initiators of the Bill who took the floor on behalf of factions supported the passing of the Act.
The Riigikogu passed with 43 votes in favour and 6 against the Act on the Ratification of the Work in Fishing Convention (No. 188) of the International Labour Organization (126 SE), initiated by the Government. With that, application of international labour standards on fishing vessels becomes legally binding. The Convention covers the generally recognised rights of fishers to satisfactory accommodation, food and occupational safety, as well as health protection, medical care and social security, and placement in connection with maritime labour. The ratification gives the state advantages in communication with the maritime supervision authorities of other port States. Ships flying Estonian flag will have better possibilities of avoiding long-term inspections in foreign ports.
The Riigikogu passed with 43 votes in favour and 4 against the Act on the Ratification of the Maritime Labour Convention of the International Labour Organization (127 SE), initiated by the Government. With that, Estonia supports the creation of decent conditions of work in the maritime sector. The Convention ensures important supervisory advantages for Estonia. Also, there will be better opportunities to engage in protection against unfair competition. The Convention provides for the right of every seafarer to fair terms of employment, decent working and living conditions on board ship, as well as health protection, medical care, welfare measures and other forms of social protection. In addition, the provisions of the Convention help enhance the supervision of the working and living conditions of crew members and, in connection with that, the supervisory obligations of the flag and port state.
The Riigikogu appointed Nele Parrest a justice of Supreme Court. 52 members of the Riigikogu voted in favour of appointing her as a justice of the Supreme Court, 9 were against, and there were 2 abstentions. The Resolution of the Riigikogu “Appointment of Nele Parrest a Justice of the Supreme Court” (179 OE) provides for her assumption of office as of 2 May 2016.
Parrest is an experienced lawyer. She has been a lecturer in administrative law at the University of Tartu and Tallinn University of Technology. She has published publications in both Estonian and foreign scientific journals. Parrest has strong academic qualifications and a long working experience at the Chancellery of Chancellor of Justice.
The Riigikogu concluded the second reading of two Bills.
The Riigikogu concluded the second reading of the Bill on Amendments to the Bar Association Act (164 SE), initiated by the Government. The Bill is intended to ensure efficient and sustainable functioning of the Estonian Bar Association. The Bar Association Act needs to be amended because, in view of the growth of the number of membership of the Bar Association, the current regulations of the Act have become outdated and do not allow the organisation to act with the necessary efficiency. With the entry into force of the amendments, the administrative burden of the Estonian Bar Association in connection with the conducting of assessment interviews will decrease. The General Assembly of the Estonian Bar Association would no longer discuss individual matters unless a significant number of members so request. The Office of the Estonian Bar Association will have less administrative burden in connection with the preservation of certificates concerning the professional liability insurance, the continuing checking of the grounds for suspension of membership, and the delivery of notices to advocates. It is provided unambiguously that the right to act as an associate member of the Estonian Bar Association is granted to persons who wish to permanently operate in Estonia, and persons are admitted to the Bar Association if they reside in a member state of the European Economic Area or in Switzerland. During the second reading, an amendment concerning a specification in the procedure for payment of the membership fee of the Bar Association was introduced to the Act.
Külliki Kübarsepp and Jüri Adams took the floor during the debate.
The Riigikogu concluded the second reading of the Bill on Amendments to the Railways Act and the Public Transport Act (129 SE), initiated by the Government. The Bill transposes the European Union Directives regulating the establishment of a single EU railway area and the certification of train drivers. The amendments concern in particular railway undertakings who will have to make changes in their business structure as necessary in order to separate the operation of the service facility from other activities. To ensure sustainability of the railway infrastructure, the state is required to observe that the infrastructure manager would be able to also develop the infrastructure according to agreements concluded with the state which means that, if necessary, the state will have to contribute financially to the infrastructure manager. The Bill will specify the requirements for the regular interim inspection of train drivers. Language skills will also have be assessed if the language designated for use on the railway by the railway infrastructure manager is not the train driver’s mother tongue. Linguistic knowledge is important in order that the train driver and the dispatcher would definitely understand each other, otherwise dangerous situations may arise due to misunderstandings.
Urve Palo, who took the floor during the debate, emphasised that this Bill would add the requirement, arising from a European Union directive, that, in addition to knowledge, the language skills of the train driver must also be assessed. She said that Estonian Railways can also establish two official languages, both Estonian and Russian, and if a person is proficient in one of these languages, then in practice there will be no problem and the train driver will be able to continue working.
Andres Herkel, who took the floor during the debate, said that Estonian Railways cannot establish two official languages. Kalle Palling, who made a report on behalf of the Economic Affairs Committee, explained that Estonian Railways has confirmed that two languages are used as working languages, and train drivers do not necessarily have to be proficient in two languages. Proficiency in either Estonian or Russian at B1 level is required.
Two Bills passed the first reading in the Riigikogu.
The Bill on Amendments to the State Assets Act and Amendments to Other Associated Acts (171 SE), initiated by the Government, passed the first reading. The Bill will simplify the administration of state assets and support the development of enterprise. According to the amendments, in the future, local governments will have the possibility to apply for land without charge from the state in the case when they wish to make important investments to develop enterprise. In other situations, local governments will have to pay 65 per cent of the usual value of the land during five years upon application for land for enterprise. The amendments will simplify the administration of state assets, in particular as regards the transfer of assets from one authority to another. The amendments will reduce the workload of authorities, and the rounds of approval.
The Bill on Amendments to § 34 of the National Defence Act (182 SE), initiated by the National Defence Committee, passed the first reading. According to the Bill, participation in a specific military operation on the basis of a general mandate will no longer be decided by the Minister of Defence and the Minister of Foreign Affairs, but the decision will have to be made by the Government. When making a decision, the Government will have to not only hear the opinion of the National Defence Committee of the Riigikogu, but also take this opinion into account when making its decision. The position of the Chancellor of Justice on the constitutionality of this Bill had also been asked, and the Chancellor of Justice had found that it was in conformity with the Constitution.
Martin Helme , who took the floor on behalf of the Estonian Conservative People’s Party Faction in the debate, did not support the Bill. Oudekki Loone who spoke on behalf of the Centre Party Faction and Madis Milling who spoke on behalf of the Reform Party Faction expressed support to the Bill.
Martin Helme, Eiki Nestor and Igor Gräzin took the floor during the debate.
Justice of the Supreme Court Peeter Roosma took the oath of office before the Riigikogu.
Verbatim record of the sitting (in Estonian).
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