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Estonia: The Riigikogu passed two Acts

NordenBladet — At today’s sitting, the Riigikogu passed the Act that helps improve the enforcement of European Union agri-food chain legislation, and the Act according to which the base amount of pension will rise by additional 7 euro after indexation on 1 April 2020.

The Act on Amendments to the Infectious Animal Disease Control Act, the State Fees Act, the Feed Act, the Food Act and the Veterinary Activities Organisation Act (90 SE), initiated by the Government, brings the Act into conformity with a Regulation of the European Parliament and of the Council. The Act will improve the enforcement of European Union agri-food chain legislation and the level of protection against risks to human, animal and plant health in Member States.

The aim is to establish a European Union framework to harmonise the organisation of official controls, and official activities other than official controls, along the entire agri-food chain. The principle arising from European Union law does not allow to duplicate the provisions of directly applicable legislation or to rewrite them in national law. Therefore, it is necessary to update or repeal several provisions of the Infectious Animal Disease Control Act, the Feed Act, the Food Act and the Veterinary Activities Organisation Act.

Among other things, the procedure for performing official controls on the transportation of feed of non-animal origin to Estonia from countries and territories that are outside the European Union customs territory is amended. Imported feed of non-animal origin arriving in Estonia is no longer subject to 100-per cent control at border control posts. Instead, the focus is on the control of feeds that may pose a higher risk to animal and human health and to the environment. A significant amendment to the Feed Act is also the changing of the principles for financing of official controls and of other official activities. The current state fee paid for performing official controls is replaced by the supervision fee charged for controls. Such a charging system takes into account the actual costs relating to controls and enables flexibility in the case of different types of establishments. Due to this amendment, the State Fees Act also needs amending.

80 members of the Riigikogu voted in favour of the Act.

The Riigikogu also passed the Act on Amendments to § 61 of the State Pension Insurance Act (79 SE), initiated by the Government, according to which the base amount of pension will rise by additional 7 euro after indexation on 1 April 2020, and according to the forecast, together with indexation, the average pension will increase by 45 euro.

The extraordinary increase of the base amount of pension as the solidarity component increases the pensions of all old-age pensioners (including persons receiving pensions under the Old-Age Pensions under Favourable Conditions Act and the Superannuated Pensions Act), persons receiving pension for incapacity for work and persons receiving a survivor’s pension. The increasing of the solidarity component will help relatively more the non-working pensioners who receive a lower pension. In 2020, the increasing of the base amount of pension will concern around 330,000 persons, and it will reduce the relative poverty rate among pensioners by 0.6 percentage points.

During the debate, Marika Tuus-Laul (Centre Party), Signe Riisalo (Reform Party) and Indrek Saar (Social Democratic Party) took the floor.

76 members of the Riigikogu voted in favour of the Act.

Five Bills passed the second reading:

First, the Bill on Amendments to the Penal Code and Other Acts (transposition of the directive on the protection of the European Union’s financial interests, and the directive on the procedural rights of minors) (50 SE) was at the second reading. It had not been deliberated at Tuesday’s sitting due to the end of the working hours.

The directive on the protection of the European Union’s financial interests obliges Member States to apply sanctions to natural and legal persons who are guilty of intentional fraud affecting the Union’s financial interests, as well as other related criminal offences (e.g. the laundering of proceeds of crime).

On the basis of the directive, the definition of EU’s financial interests will be inserted into the Penal Code under which ‘European Union’s financial interests’ means revenues, expenditure and assets covered by, acquired through, or due to the EU’s budget and the budgets managed by the EU’s structural units. The scope of application of the Estonian Penal Code will also be extended by providing that it also applies to criminal offences affecting the Union’s financial interests committed outside Estonian territory if they are committed by an Estonian citizen, Estonian official or a legal person registered in Estonia.

With a view to transposing the directive, the Penal Code will be amended by inserting a new provision concerning procurement fraud affecting the EU’s financial interests, and the elements of crimes related to smuggled goods will be amended. In the case of criminal offences affecting the EU’s financial interests, foreign officials will also be deemed to be officials. The maximum sanction for fraud and smuggling will be increased by raising the maximum term of imprisonment from three years to four years.

On the basis of the function of the government committee on anti-money laundering and countering the financing of terrorism, the maximum term of imprisonment imposed for money laundering agreement will be raised from one year to two years, and the liability of legal persons will be provided for.

The directive on the procedural rights of minors concerns procedural safeguards for children who are suspects or accused persons in criminal proceedings. With a view to transposition of the directive, the rights of suspects or accused who are minors will be provided for more clearly. As major amendments, the Bill will provide the right of a minor to an individual assessment, and to a medical examination upon deprivation of liberty, and the right of his or her legal representative or another person to participate in the criminal proceedings. For individual assessment, in the future, in the case of suspects who are minors, a pre-trial report will have to be prepared at the latest before indictment.

The Bill on Amendments to the Military Service Act and Other Acts (59 SE), initiated by the Government, will amend the Military Service Act with the aim of organising the planning of special pensions and the prosecutor’s work ability allowance in the state budget.

At present, many special pensions and the prosecutor’s work ability allowance are planned in the budgets of different areas of government, and they are paid centrally in the Social Insurance Board. Under the current law, different ministries, as well as the National Audit Office and the Office of the Chancellor of Justice calculate the special pensions, and in practice the personnel records relating to the calculation have already been mainly consolidated into the State Shared Service Centre.

With the amendment, special pensions and the prosecutor’s work ability allowance will be paid from the state budget, and the reference to the area of government of a specific ministry will be omitted. According to the amendment, in the future, the Ministry of Social Affairs will plan special pensions and the prosecutor’s work ability allowance in its budget, using the data prepared by the State Shared Service Centre. The amendments will not affect the amount of special pensions or the prosecutor’s work ability allowance, or the rights of the persons receiving them. Nor will there be any changes in the payment. Special pensions and the allowance will continue to be paid through the Social Insurance Board.

The Bill on Amendments to the Value Added Tax Act (76 SE), initiated by the Government, will transpose the amendments to the EU Value Added Tax Directive which harmonise the VAT treatment of call-off stock and chain transactions at EU level. The deadline for the transposition of the directive is 1 January 2020.

The explanatory memorandum notes that “call-off stock” means goods that the seller transports to a warehouse in another Member State for the buyer on the basis of an agreement with the buyer, to be redeemed from the warehouse by the buyer. Goods are in the seller’s ownership until they are transferred to the buyer. The amendment will simplify the procedure for cross-border VAT treatment of businesses engaging in business-to-business goods transactions which will reduce the administrative burden for businesses. Under the current procedure, in such cases, the seller of the goods must be identified for VAT purposes in the respective Member State and must declare the sale of the goods as a domestic sale there.

According to the amendment, the seller of goods will declare only intra-Community supply of goods at the moment when goods transported as call-off stock to another Member State are transferred there. That is, the sale of goods will be declared and taxed at a zero rate in Estonia and the seller will have no obligation to register or report such transactions in the other Member State.

The Bill will establish the rules for the VAT treatment of cross-border chain transactions. Chain transaction is a successive transfer of goods, or a chain of transactions whereby goods are transported directly from the first seller to the last buyer of the goods in another Member State. In a chain of transactions, transfer of taxable goods to resellers of other Member States who transport the goods either themselves or through a third party acting on their behalf to the last purchaser of the goods in the chain of transactions is subject to a zero per cent rate. The remaining transactions in the chain are regarded as domestic revenue.

The practice of the VAT treatment of chain transactions varies by Members States and therefore operators lack legal certainty in this regard. Varying practices may result in double taxation or non-taxation of transactions.

The Bill on Amendments to the General Part of the Environmental Code Act and Other Acts (55 SE), initiated by the Government, will optimise the processes for environmental decisions and reduce the administrative burden in environmental law through consolidation and coordination of the proceedings for permits. The Bill is part of the codification of environmental law that was begun with the General Part of the Environmental Code Act. The requirements for the proceedings relating to environmental permits in the Acts of the special part of the Environmental Code will be systematised, controversies will be solved, and a basis for issuing a single environmental permit will be established. The Bill will eliminate parallel proceedings for environmental permits, reduce bureaucracy, and enable obligations arising from legislation to be fulfilled more conveniently and effectively.

The Bill on Amendments to the Consular Act and Amendments to Other Associated Act (44 SE), initiated by the Government, is intended to determine the list of consular acts in the event of which a consular secretary can also provide consular services. As the concept “consular secretary” is not in the current law at present, the concept is provided for in the Bill. Under the Bill, consular secretary is a member of staff working in a non-diplomatic post who can provide consular services, under the proposed amendments. The Bill also points out that the services will be provided under the supervision of a consular officer.

The amendments will not automatically involve the right of all consular secretaries to provide the services listed in the Bill, but the Bill will create the legal basis for such a possibility. The right to provide the services will be decided separately for each particular member of staff. Along with that, members of staff will be granted relevant access to the register of professional acts of a consular officer for registration of acts. Relevant training is a prerequisite for the right to provide the services and access to the register, among other things, with the aim of ensuring compliant and correct identification of persons.

A Bill passed the first reading:

The Bill on Amendments to the Penal Code and Amendments to Other Associated Acts (fines arising from European Union law) (94 SE), initiated by the Government, will amend the General Part of the Penal Code so that the Act would enable to meet the requirements provided by European Union law and to apply a higher upper limit of fine for certain breaches in specific areas (financial sector and data protection). The Bill provides for the legal framework for establishing fines with a higher upper limit. The specific elements of misdemeanour and sanctions will be set out in a separate Bill.

The explanatory memorandum notes that the fine with a heightened upper limit is an exceptional type of fine which can be applied in justified cases and when this is necessary for the fulfilment of an international obligation binding on Estonia. The definition of international obligation includes both international agreements concluded and sources of European Union law.

In the future, a fine of up to 20 000 000 euro or up to three times the amount of the profits gained or losses avoided because of the infringement can be imposed as a punishment on both natural and legal persons as a fine with a heightened upper limit.

A fine for a legal person may also amount to up to 15 % of the consolidated turnover of the legal person or, in cases provided by law, its consolidation group.

In connection with the previous amendments, the upper limit of the fine prescribed for legal persons for criminal offences will also be raised from 16,000,000 euro to 40,000,000 euro. The principle under which a fine calculated by reference to turnover may not be higher than the fixed upper limit for a fine will also be abandoned.

The term for payment of fines will be extended from the current 15 days to 45 days in order to balance the impact of the fine with a heightened upper limit. Amendments will also be made that will highlight more the option to pay a fine in instalments.

 

Source: Parliament of Estonia

 


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