NordenBladet — Today at 2 p.m., Member of the European Court of Auditors Juhan Parts will give an overview of the 2018 annual report of the European Court of Auditors to the European Union Affairs Committee, the Finance Committee and the State Budget Control Select Committee of the Riigikogu (Parliament of Estonia) at a public sitting. The European Court of Auditors observes the implementation of the budget of the European Union and the lawfulness of the use of the funds.
According to the 2018 report of the European Court of Auditors, the Union’s revenues as a whole were legal and regular, and were not materially affected by errors. The estimated level of error in expenditure from the 2018 European Union budget was 2.6%, which is within the range of error estimates for the last two years.
Chair of the European Union Affairs Committee Anneli Ott said that generally the payments of 2018 had been regular, but the Court of Auditors was once again drawing attention to the range of error in high-risk cost reimbursements in member states. “This concerns the payments about which it has later found out that the payments made did not meet the rather complex eligibility rules,” Ott explained. She added that direct aid payments to farmers had been free of material error.
However, for the third year in a row, the Court of Auditors issues a qualified opinion on payments. There are problems with cost reimbursements in areas with higher level of error, like research and development aid projects and investments in regional and rural development. The area of cohesion was affected by material error, mainly due to the reimbursement of ineligible costs and infringements of internal market rules. The Court of Auditors also found errors in research expenditure, where the beneficiaries had overdeclared personnel costs, other direct costs, overheads and ineligible subcontracting costs.
The joint sitting of the Committees will be streamed online.
NordenBladet — The Riigikogu passed a Resolution on an amendment to the membership of the Estonian delegation to the NATO Parliamentary Assembly.
Head of the delegation Kadri Simson (Centre Party) was excluded from the delegation, and Kerstin-Oudekki Loone (Centre Party) was appointed head of the delegation. Member of the delegation Sven Sester (Isamaa) was excluded from the delegation, and Andres Metsoja (Isamaa) was appointed member of the delegation. Alternate member of the delegation Sven Mikser (Social Democratic Party) was also excluded from the delegation and Jevgeni Ossinovski (Social Democratic Party) was appointed as an alternate member of the delegation.
Member of the delegation Ants Laaneots (Reform Party) and alternate member Leo Kunnas (Estonian Conservative People’s Party) are members of the delegation on the basis of an earlier resolution.
A lively discussion on whether the new head of the delegation was suitable for the office was held before the Resolution was passed. During the debate, Valdo Randpere (Reform Party) and Oudekki Loone (Centre Party) took the floor.
50 members of the Riigikogu voted in favour of the Resolution of the Riigikogu “Amendment of the Resolution of the Riigikogu “Formation of the Estonian Delegation to the Parliamentary Assembly of the North Atlantic Treaty Organization”” (85 OE), submitted by the Foreign Affairs Committee, and 33 were against.
The new Minister of Foreign Trade and Information Technology Kaimar Karu took his oath of office.
NordenBladet —The Bill will specify the formation of the membership of the Supervisory Board of the Bank of Estonia, and the requirements for members of the supervisory board, and the term of their mandate.
The Bill on Amendments to the Bank of Estonia (Eesti Pank) Act (97 SE), initiated by the Finance Committee, will introduce the requirement according to which the membership of the supervisory board will have to include representatives of all political parties in the Riigikogu, in addition to experts in the field. The amendments specify that the factions of the Riigikogu will appoint their representatives, and the Chairman of the Supervisory Board of the Bank of Estonia will appoint the experts in the field. The Bill will specify that the members of the supervisory board will have to have sufficient knowledge and experience to participate in the work of the board, and no member of the Supervisory Board of the Bank of Estonia may be appointed for more than two consecutive terms. The Bill requires a majority vote in the Riigikogu to be passed.
In the debate, Jürgen Ligi, took the floor on behalf of the Reform Party Faction and noted that the amendment of the Act was motivated by the behaviour of the current Chairman of the Supervisory Board of the Bank of Estonia.
Aivar Kokk took the floor on behalf of the Faction Isamaa. He stressed that every member of the Riigikogu had the right to submit motions to amend a draft Resolution on the appointment of members of the Supervisory Board of the Bank of Estonia before the second reading.
Henn Põlluaas took the floor on behalf of the Estonian Conservative People’s Party Faction and expressed his delight that all factions of the Riigikogu supported the Bill.
Another Bill passed the first reading
The Bill on Amendments to the State Fees Act, the Identity Documents Act and the Consular Act (78 SE), initiated by the Government, will amend the rates of the state fees for acts performed in foreign missions, and will establish new state fees for acts which as yet are not subject to a fee. With the amendments, the planned state fees for acts performed in foreign missions are intended to be brought in line with actual costs. The state fee charged for acts performed under Acts in foreign missions will be raised so that it will be higher by 30 euro than the state fee charged for the performance of the same acts in Estonia. The Bill has been drafted in particular to cover the costs related to accepting applications, issuing documents and using the postal service. A state fee for issuing documents in Estonian foreign missions and through honorary consuls will also be established. This service has so far been free of charge.
The Riigikogu passed two Resolutions
The Resolution of the Riigikogu “Amendment of the Resolution of the Riigikogu “Formation of the Estonian Delegation to the Parliamentary Assembly of the Organization for Security and Co-operation in Europeˮ” (86 OE), initiated by the Foreign Affairs Committee. Head of the delegation Mart Nutt is excluded from the membership of the delegation, and Sven Sester is appointed head of the delegation. In addition, with the Resolution, member of the delegation Kerstin-Oudekki Loone is excluded from the membership of the delegation, and Marko Šorin is appointed member of the delegation to replace her.
76 members of the Riigikogu voted in favour of the passage of the Resolution.
With the Resolution of the Riigikogu “Appointment of an Auditor to Audit the Activities of the National Audit Office in 2019-2021” (92 OE), initiated by the Finance Committee, the Finance Committee proposes to appoint AS Deloitte Audit Eesti to audit the activities of the National Audit Office in 2019–2021. Under the Riigikogu Rules of Procedure and Internal Rules Act, such a draft Resolution is deliberated in a single reading and a majority vote of the Riigikogu is required to pass it.
74 members of the Riigikogu voted in favour of the passage of the Resolution.
NordenBladet —The Minister of Economic Affairs and Infrastructure Taavi Aas replied to the interpellation concerning the financing of road construction (No. 4), submitted by members of the Riigikogu Aivar Sõerd, Andres Sutt, Taavi Rõivas, Kaja Kallas, Annely Akkermann, Kristina Šmigun-Vähi, Heiki Kranich, Jürgen Ligi, Riina Sikkut, Maris Lauri, Kalvi Kõva, Ivari Padar, Heljo Pikhof, Urmas Kruuse, Katri Raik and Jüri Jaanson on 16 September.
The interpellators wished information on infrastructure investments in the next year’s state budget. The interpellators asked on what considerations the Government had rejected the application of the Road Administration to allocate 5 million euro from the state budget every following year in order to plan and design new four-lane highways and to purchase lands for reconstructing the three main highways as four-lane highways.
Aas said that in spring the cabinet had decided to approve both the state budget strategy for 2020–2023 and the state budget for 2020 Bill with an overall national deficit. The Government was planning to come back to the saving on various costs as well as the content of the decisions on potential additional expenditure in the course of the autumn budget process after the Ministry of Finance would have released its summer economic forecast. Under the Government’s decision of 19 December, and the State Budget for 2020 Bill approved by the Government on 24 September and submitted to the Riigikogu, four million euro will be allocated next year for designing the reconstruction of the main highways as four-lane highways and for purchasing lands.
Aas explained that the investment possibilities of the state would be established in the course of the drafting of the state budget strategy and the annual budget. At present, a new road management plan is being drafted which will reflect the Government’s decisions regarding the state budget strategy for 2020–2023 and the state budget for 2020. Among other things, the volume of the preparation of projects will be increased by 4 million euro, and the volume of the surfacing of gravel roads will be increased by 10 million euro. “It must be noted here that the current state budget strategy does not contain the European Union 2021+ budgetary period funds as negotiations with the European Union institutions are still underway. The current road management plan for 2018–2022 was drafted in autumn 2018, based on the state budget strategy for 2019–2022 and the budget for 2019,” Aas said. He added that the road management plan also contained, among other things, the indicative need for financing national roads in 2023–2027. The indication gives an opportunity to better plan funds by years and, depending on the possibilities of the state, to implement sites earlier and to postpone them and to seek other funding alternatives. In addition, the possibilities of implementing larger road construction sites within the framework of public-private partnership cooperation are being analysed.
“We have examined the audit of the European Court of Auditors, and we will definitely take into account the observations and risks set out in the audit when preparing the public-private partnership projects. Relevant principles and instructions needed to implement public-private partnership projects are also already being developed in the Ministry of Finance in order to prevent, among other things, a situation where the risks set out in the audit would be realised in Estonia,” Aas said.
During the open microphone, Ruuben Kaalep took the floor.
NordenBladet — The President of the Riigikogu Henn Põlluaas spoke at the European Conference of Presidents of Parliament at the Parliamentary Assembly of the Council of Europe (PACE) in Strasbourg, focusing on the restoration of Russia’s right to vote in the Assembly.
Põlluaas said that when the PACE restored the voting rights of the Russian delegation in June, it overrode the fundamental principle of the Council of Europe: protection of the universal human rights.
“Russia has committed aggressive acts against Ukraine and refrained from following internationally negotiated guidelines to resolve the conflict,” Põlluaas said. “We need to keep the pressure on the perpetrator and demand the violations of the basic human rights in Eastern Ukraine to cease.”
Põlluaas said that this agreed framework of international law is supposed to provide us with a certain safety net of trust, applied universally by every Member State. “Equality before the law encourages a small state to instinctively trust the principle of the rule of law and to believe in active international cooperation. This trust can be easy to lose,” Põlluaas admonished.
Põlluaas said that Russia’s systematic destabilising and aggressive behaviour affects not only its neighbours but the whole Euro-Atlantic region. “We have to unite our efforts to counter this gravely dangerous development,” Põlluaas reminded his colleagues. “We are under obligation to consolidate our Common European Home. Nobody is going to do it instead of us.”
Põlluaas believes that the PACE decision in June did not do justice to the countries facing aggression by their neighbour, or to efforts to solve frozen conflicts.
The PACE unites the delegations of 47 national parliaments. The President of the Riigikogu is taking part in the European Conference of Presidents of Parliament in Strasbourg today and tomorrow. The main topic of the Conference is the future of the Assembly. Other topics include the UN Sustainability Action Plan, and the role that the national parliaments could play in fighting the ever intensifying harassment and hate speech directed at female politicians and parliamentarians.
The President of the Riigikogu has also scheduled in a meeting with the Presidents of the Nordic and Baltic parliaments (NB8), as well as a bilateral meeting with the President of the Ukrainian Parliament.
NordenBladet — Today, the Riigikogu passed an Act that allows holders of UK driving licences to drive on Estonian roads for one year after Brexit.
The Act on Amendments to the Traffic Act relating to the Withdrawal of the United Kingdom from the European Union (61 SE), initiated by the Government, allows UK citizens who are permanently residing in Estonia since before the Brexit to use their UK driving licence for 12 months starting from a no-deal withdrawal or the end of the transition period. In addition, after Brexit goes through, the parking cards issued by a competent UK authority for vehicles servicing people with a mobility disability or blind people will remain valid in Estonia.
After one year at most, the UK driver’s licence must be exchanged for an Estonian one to keep the right to drive.
The potential target group of the Act are the 1,397 citizens of the United Kingdom who hold a valid ID-card (data of the Police and Border Guard Board as of 1 August).
The Act will come into force on the day following the UK’s withdrawal from the European Union.
82 members of the Riigikogu voted in favour of the Act.
The Legal Affairs Committee decided today to initiate a Bill that would simplify the options of foreign investors to invest into Estonian start-ups, and thus improve the attractiveness of the Estonian business environment.
The Chairman of the Legal Affairs Committee Jaanus Karilaid said that the amendment should help to avoid situations where foreign investors decide not to invest into Estonia because transactions with a private limited company are simply too complicated and costly. “Compared to our neighbours, we have too much red tape. A busy foreign investor might not find the time to come and sign a document at a notary’s office in Estonia. This is why we are legislating for the option to do it from a distance if all the partners agree,” Karilaid explained.
Member of the Committee Kaja Kallas said that the cumbersome nature of the current system is to blame for many transactions going to our neighbouring countries instead. “Rigid formal restrictions have set massive obstacles on the path of fledgling companies, and this money is lost for Estonia. The amendments will increase the attractiveness and competitiveness of Estonian limited companies as a form of enterprise in the European Union,” Kallas said.
The amendment would enable the shareholders of private limited companies to opt for unattested written forms that did not require notarial authentication to conclude certain disposal transactions. These amendments were already planned with the review of the company law prepared by the Ministry of Justice, but as these are seen more urgent, the goal is to enforce these much earlier. The Bill is a response to the request of the Estonian start-up community to resolve the situation where Estonia loses millions of euros worth of investments because these are never made here in the first place, or are withdrawn from here.
The Riigikogu ratified the Act on the Ratification of the Arrangements for Working Holidays between the Government of the Republic of Estonia and the Government of Japan, which allows Estonia and Japan to issue multiple-entry working holiday visas to their citizens of 18 to 30 years of age with the duration of up to one year.
79 members of the Riigikogu voted in favour of the Act (46SE).
The bilateral agreement allows both Japanese and Estonian young adults to work without previously registering their visa with the Police and Border Guard Board. The Japanese government determines the number of visas that may be issued to Estonian citizens annually.
The agreement will enter into force 120 days after Estonia notifies Japan of the completion of the national procedure necessary for issuing working holiday visas to Japanese citizens.
The agreement will tighten relations between Estonia and Japan, support youth tourism, allow people to stay longer in the country, and seek short-term employed in addition to holidaying.
Estonia has previously concluded similar agreements with Australia, New Zealand, and Canada.
The Bill that will transpose the directive regulating the resolution of disputes arising in the application of international agreements eliminating double taxation of income and capital concluded between Member States passed the second reading in the Riigikogu today.
Compared to the existing options for resolving cross-border tax disputes on the basis of agreements for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital, and the Convention on the elimination of double taxation in connection with the adjustments of profits of associated enterprises, the directive provides for more detailed and effective procedural rules, provides a more certain time frame for resolving disputes, and strengthens the rights of the taxpayers in the process. A final decision to resolve a tax dispute is binding on tax authorities and it is enforced if the taxpayer accepts it.
The amendments to the Courts Act will enable judges to participate as independent recognised persons in the work of an advisory commission or an alternative dispute resolution commission in the resolution of such disputes. The publishing of the personal identification codes of candidates for lay judges will also be regulated.
According to the Bill, it will be possible for the Tax and Customs Board to disclose data subject to tax secrecy to the implementers of national support programmes so that they can check compliance with the conditions for granting supports and with targeted use of the support, as well as to the Environment Agency so that it can check compliance with specific requirements of the Liquid Fuel Act and the Atmospheric Air Protection Act.
The explanatory memorandum to the Bill on Amendments to the Taxation Act, the Courts Act and the Liquid Fuel Act (29 SE), initiated by the Government, states that, in order to ensure a fairer tax environment, an effective dispute resolution system is needed that would make it possible to eliminate double taxation.
Video recordings of the sittings of the Riigikogu can be viewed at https://www.youtube.com/riigikogu (Please note that the recording will be uploaded with a delay.)
NordenBladet —At today’s plenary sitting, the Riigikogu concluded the first reading of two Bills intended to additionally increase pensions in the coming year.
The Bill on Amendments to § 61 of the State Pension Insurance Act (79 SE), initiated by the Government, concerns the increasing of the base amount of pensions by seven euro on 1 April 2020 after the indexation of pensions. According to the forecast, together with indexation, pensions will increase by 45 euro.
According the explanatory memorandum, 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. The explanatory memorandum notes that the extraordinary increasing of the base amount of pension will increase the pensions of all old-age pensioners, 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.
During the debate, Jürgen Ligi (Reform Party), Oudekki Loone (Centre Party) and Indrek Saar (Social Democratic Party) took the floor.
The Bill on Amendments to § 61 of the State Pension Insurance Act (31 SE), initiated by the Social Democratic Party Faction, will provide that the base amount of pension will rise by 100 euro and the national pension will rise by 60 euro after the indexation due on 1 April 2020.
The explanatory memorandum notes that the Bill is intended to improve the subsistence of the elderly. It is intended to increase old-age pensions to the extent that the average old-age pension would be above the relative poverty rate. According to the explanatory memorandum, the increase in the national pension proposed by the Bill will help the elderly out of absolute poverty.
Helmen Kütt (Social Democratic Party) took the floor during the debate.
The Riigikogu did not support a proposal by the Chancellor of Justice:
The Chancellor of Justice Ülle Madise made a proposal to the Riigikogu to bring clause 18 (1) 6) of the Local Government Organisation Act into conformity with the Constitution. In the words of the Chancellor of Justice, the clause is in breach of the right to stand as a candidate and the fundamental right to freely choose profession, area of activity and position of employment.
The Chancellor of Justice explained that the restriction under which people who had a contract of employment with a city or a rural municipality could not be members of a municipal council was in conflict with the Constitution. As examples she mentioned bus drivers, cleaners and stadium guards, who must choose between their job and their mandate when they are elected at local elections.
“The right to stand as a candidate and to start working in the representative body after being elected, as well as the right to vote and to retain one’s job are very important fundamental rights. Clear and logical justifications must be given if these rights are restricted,” Madise said. In her words, there were no such justifications in that case. Madise noted that active local people were often members of municipal councils, and the Local Government Organisation Act and the Anti-corruption Act set out clear and strict rules for withdrawal.
During the debate, Hanno Pevkur (Reform Party) took the floor, and noted that drawing a border in the issue of the membership of municipal councils was a legislative policy choice. He called on the factions to think along in that matter.
Paul Puustusmaa spoke on behalf of the Estonian Conservative People’s Party Faction. He said that his faction saw no conflict with the Constitution in that issue. He noted that the proposal of the Chancellor of Justice could bring about a greater risk of proceeds of corrupt practices, and the Estonian Conservative People’s Party did not support that.
Siim Kiisler (Isamaa) noted that the legislative amendment proposed by the Chancellor of Justice would not resolve the situation, and that there was no substantial conflict with the Constitution. Thus, in his words, there was no reason to support the proposal of the Chancellor of Justice. He added that the question of how to increase trust in municipal councils deserved further analysis.
Tarmo Kruusimäe (Isamaa) said in his speech that the concept of official was narrow in Estonia. He noted that, currently, employees had the right to stand as candidates, but a problem arose when they were elected and had to decide between their office and their mandate.
31 members of the Riigikogu voted in favour of the proposal of the Chancellor of Justice, 37 were against, and there were two abstentions. Thus, the proposal of the Chancellor of Justice was not supported.