BONJOUR L'ESTONIE

Tallink sued by employees

TALLINN - Estonia's largest ferry operator is being sued by it's employess for an alleged breach of contract.

The Seamens Independent Union sued Tallink, claiming that the company violated its members' work contracts by transfering some employees from salaried to hourly work and by failing to deliver on a 6% pay rise.

The case has already reached the Harju County Court.

Riigikogu approves of “golden handcuffs” law from 2011

The Estonian Riigikogu approved on Wednesday of the so-called “golden handcuffs” law or an amendment to the income tax law that allows companies to give stock options to employees without paying the fringe benefits tax starting the year 2011, LETA/Postimees writes.

Currently, a company has to pay the fringe benefits tax at once when issuing a stock option to an employee. According to the new regulation, the tax will not have to be paid if there is a gap of at least three years between granting the option and real acquisition of shares.

Riigikogu finance committee chairman Taavi Rõivas said that so far, issuing options was a very big cost for a company but the new logic is that options are taxed more like securities income: if you buy a share and sell it at a profit you pay income tax on the profit.

He said that the 3-year sale restriction was added to prevent a tendency that companies start paying tax-free wages to employees in stock options.

Rõivas said that currently just 2% of Estonian population earns shareholder’s income but with the law amendment, more people should move from the status of a wage-earning employee to co-owner.

Juhan Tere

Riigikogu approves law that aims to protect Estonians taking consumer loans

The Estonian Riigikogu approved on Thursday of the amendments to the law of Obligations Act and other laws that aims to implement the new consumer credit directive in Estonian legislation, LETA/Eesti Päevaleht Online reports.

The amendments that accompany implementing the directive are mainly focused on raising the level of consumer protection in the consumer credit sphere.

The amount of information that credit issuers are obliged to give consumers before any contracts are concluded increases considerably and credit issuers are obliged to counsel consumers before they take a loan so that the consumer could evaluate whether the consumer credit contract offered to him is adjusted to correspond to his needs and financial situation.

The credit issuer is clearly demanded to evaluate the credit repayment ability of the consumer before the credit agreement is concluded.

Rules on advertising consumer credit contracts were also changed.

The law will come in force on July 1 next year while the first provision of the first paragraph comes in force on February 23, 1011.

Estonia passes law limiting Tallinna Vesi profit

Estonia’s parliament adopted measures to limit profit at the country’s largest water and heating utilities, including AS Tallinna Vesi, a utility that supplies water to Estonia’s capital.

Lawmakers voted 52-3 to approve the bill that requires the biggest utilities to seek an approval from the competition board for tariffs, which have to be based on “reasonable profitability.”

Passing the bill will lower water tariffs in the capital, home to almost a third of the country’s 1.3 million population, by up to a quarter in coming years, Urmas Reinsalu, a lawmaker with the coalition Isamaa ja Res Publica Liit said in parliament yesterday. Heating prices may decline by 10-15 percent, Ken- Marti Vaher, a lawmaker with the same party, said yesterday.

Tallinna Vesi stock has declined 27 percent since March 9, when the parliament started discussing the bill. It is the worst performer in Tallinn this year with a 16 percent slide, compared with a 34 percent gain for OMX Tallinn index.

The company will comment on the bill in a statement “later today,” spokesman Priit Koff said in a phone interview.

Estonia to try 82-year-old-veteran in November

The trial of a former operations officer of the MGB ESSR (Ministry of State Security of the Estonian Socialist Soviet Republic), 82-year Väinö Pehk, accused of preparing and carrying out the deportations of civilians in 1949, will begin on November 3rd.

The decision to proceed with the prosecution was taken at a meeting on Friday by members of the Tartu County Court.

According to investigators, in preparation for the March deportations in 1949, Pehk, who was fulfilling his official duties, collected data on 61 families which, all told, included 174 inhabitants of Vana-Tartu. The information collected was said to be the basis for the deportation of the people in question.

In addition, investigators claim that Pehk, as a member of the Task Force was personally involved in the deportation order and personally delivered to the assembly point at the center of the Saadyarve parish, three families, totaling nine people.

Sam Pehk rejects the accusations, claiming that on the day of the expulsion of the civilians, March 25th, he was in another place and took no part in the deportation. According to him, he was originally included in the list of members of the Task Force, but later his name was replaced with that of another employee.

According to the Estonian security police, Pehk worked as a translator for the Tartu Division of the MGB ESSR until July 1948 and during the deportation served as a junior operational officer at the Division, which was at the time engaged in combating what were known as the "forest brothers".

Court declared appointment of Estonian Public Conciliator invalid

The Tallinn Administrative Court declared on Tuesday the Government’s decree re-appointing Henn Pärn as the Public Conciliator invalid, writes LETA/Postimees Online.

Thus the court agreed with the complaint filed by the Estonian Confederation of Trade Unions and the Estonian Central Organisation of Civil Servants’ Professional Unions.

The organisations claimed that re-appointment of Pärn was not in accordance with the law and hence the Government’s decree from December 10, 2009 is to be declared invalid.

In January, the trade union organisations turned to court, stating that the Government violated the law by not taking into account the proposals from the trade unions in appointing the Public Conciliator. The Government’s decree lacked legal basis as it was made without achieving an agreement between the employees’ and employers’ organisations.

The trade union organisations stated that in compliance with the agreement, the candidate for the Public Conciliator’s post was to be presented by trade unions and employers’ representatives had to either approve or reject the candidacy. The Confederation of Trade Unions proposed for the position Ago Tuuling, chairman of the Central Organisation of Civil Servants’ Professional Unions, but according to the chairman of trade unions Harri Taliga, the Confederation of Employers failed to give any responses to the candidacy.

Estonian judge arrested in bribery probe

TALLINN - An Estonian judge has been arrested on suspicion of taking bribes and knowingly making flawed rulings in court cases, the Baltic state’s chief prosecutor’s office said yesterday.

Judge Vambola Oll, head of the courthouse in the southern town of Voru, was detained on Thursday, the office said. If found guilty, Oll faces up to 10 years in prison. Oll is the third judge snared in recent months by Estonian anti-graft investigators around the country

In March, a judge in western Estonia was jailed for two years and eight months for taking a bribe and leaking details to criminals of a surveillance operation he had himself authorised.

In January, a counterpart from the northeast was jailed for two years for accepting a bribe to release a murder suspect.

Speaking to parliament on Thursday, Mart Rask, chief justice of the Estonian Supreme Court, said the country was suffering a shortfall of judges. Estonia has 227 judges currently working in courts but 15 posts remain vacant, the highest level in five years, Rask said.

“The lack of judges is stretching the court system’s handling of cases,” he warned. Battling corruption was among the criteria used by Brussels to judge the readiness of ex-communist countries to join the European Union, which Estonia did in 2004. Estonia last year ranked equal 27th on the annual global corruption index.

AFP

Riigikogu approves of new international sanctions law

Riigikogu last week approved a new international sanctions law that regulates the enforcement, implementation and monitoring of international sanctions in Estonia, reported BC the Ministry of Foreign Affairs of Estonia.

Foreign Minister of Estonia Urmas Paet stated that international sanctions are a means used in foreign policy with the goal of influencing the state, organisation or individual to change their behaviour or policy to conform to international law.

The new law will replace the existing international sanctions law, which originates from the year 2003. The goal of the law is to ensure the rapid and correct implementation of international sanctions in Estonia.

The new law will bring the regulation of international sanctions into accordance with the existing international standards. The law will regulate more clearly than before the enforcement and implementation of international sanctions domestically and lays out special responsibilities for implementing financial sanctions of credit and financing institutions, registrars, and providers of legal services.

In addition, the law lays out specifics on the regulation and monitoring of the implementation of financial sanctions that were missing from the existing international sanctions law. When the law comes into force, the money laundering data division of the Police and Border Guard Board will become a full-fledged financial sanction monitoring office.

The law will come into force four months after it is published in the State Gazette.

Juhan Tere

Estonia sets up international court for arbitration of business disputes

An international court for business disputes known as ICCMCA has started operations in Estonia and enables to resolve disputes in a more timely manner and with lower fees than the Estonian court system.

According to ICCMCA that stands for International Commercial Court for Mediation, Conciliation and Arbitration, the court's objective is to arbitrate civil disputes.

"The number of business disputes has grown considerably but because of the heavy workload of the courts the verdicts are often delayed. The internationally recognized dispute resolution model that ICCMCA uses is an outstanding alternative for many business disputes", said William Cronenberg, Chairman of the Council of ICCMCA. "Arbitration rulings have to be accepted in the same way as judgements by the national court system. Faster processing is a clear advantage of arbitration and fees are approximately half of the levies raised by the state courts" he added.

Estonia has joined the New York Convention of 1958 and the rulings of an arbitration court are enforceable in all signatory countries.

At ICCMCA, as usual in arbitration proceeding, the parties are free to select arbitrators; alternatively, if the parties do not come to a conclusion about the arbitrators, they can be selected by the Council of the Arbitration Court.

Estonia proposes debt protection laws

The Estonian parliament has proposed a new debt protection law to help families struggling to pay mortgages and other loans.

According to the Baltic Course, the legislation will be discussed among politicians in the country this week.

Legal committee chairman Ken-Marti Vaher said: "The aim of the law is to protect families who … have temporarily payment problems but who want to come out of it by restructuring debts and avoiding bankruptcy."

He said the latter option is not in the interests or debtors or creditors, and is also "not fit for a European state of law".

If the legislation is passed, it could aid Estonia's economic recovery as it looks to rebuild growth and leave the recession behind.

Earlier this month, Andres Kuningas, an Estonian finance ministry official, said the country was increasing its forecast for growth in 2010 to one per cent thanks to an improved economic outlook.

Security Police launch investigation into Justice Minister

TALLINN - The Estonian Security Police have launched an investigation into Justice Minister Rein Lang over his allegedly leaking classified information.

The Justice Minister allegedly leaked the information to a journalist.

Though it would be considered a misdemeanor, Lang could face a fine of as much as 500,000 krooni (€32,100) and possibly a prison sentence. On the other end of the spectrum, he may face only a fine.

Riigikogu economy committee approves bill of keeping monopolies under control in Estonia

The economy committee of the Estonian Riigikogu decided at its Thursday session to send the draft law of keeping monopolies under control to the parliament’s readings, LETA/Äripäev.ee reports. Amendment proposals for the bill can be submitted till March 23.

MP Ken-Marti Vaher said that low protection of rights of consumers and disregard towards competition rights has led to a situation where the yield of invested assets of Tallinn’s leading water company is 18.3% while accordion to general European practices he justified profit level is 7-8%.

The bill aims to change the laws of central heating, public waterworks and sewage and punitive code so that price development of companies that offer a universal service and govern the market guarantees better protection of consumers.

The law amendments prescribe justified profitability rates to be coordinated for water, gas, electricity and central heating producers and gives the Competition Board the right to inspect activities of central heating firms and about 60 water companies and if need be interfere in their price development

Students protest to Brussels over bus fare

TÜÜL, an organization of students representing Tallinn universities and higher education establishments, said today it had filed a complaint with the European Commission against City of Tallinn's new bus fares.

The student organization claims that the City of Tallinn violated several key principles of the EU including the freedom of goods, services and people when it on February 1 introduced a new system in which fares for students not registered as residents of Tallinn went up over 300%.

TÜÜL said it has asked the European Commission to initiate an action against the Republic of Estonia under the provision that the Tallinn City Coucnil regulation violates the EU treaties.

Under the new regulations and fare structure, discount fares in Tallinn will be available only for registered residents of Tallinn.

For instance, a 90-day electronic ticket that now costs 660 kroons for Tallinn residents, will cost 825 for non-Tallinners. A regular fare remains 15 kroons for both categories.

Moreover, discounts for students, pensioners, parents of three and more children and such children themselves can enjoy a free ride only if they are entered in the Tallinn population registry.

TÜÜL has said it was also seeking the support of the law chancellor.

Toomas Hõbemägi

Court orders Estonian government to pay notorious VEB Fund damages

The Tallinn Circuit Court made a surprising ruling in the beginning of February 2010 that the government must execute the claims against the notorious VEB Fund, LETA/Postimees writes. The Ministry of Justice spokeswoman Diana Kõmmus commented that it will appeal the ruling and hence it cannot estimate the total amount of the possible claim involved. Since it is an ongoing court dispute, the ministry does not comment more.

Indrek Leppik, the attorney representing the entrepreneurs with their claim, stated that the lawsuit involves approximately 50 million kroons and entrepreneurs have been trying to get their money that had been left in the Soviet Union Foreign Economy Bank (VEB) for more than 15 years.

Thus far, the courts had ruled that the government and the Bank of Estonia were in the right. Judges Silvia Truman, Lauri Madise and Virgo Saarmets write in a court decision made public on February 2 that VEB fund certificates must be compensated by the government.

Ready for sales tax in Tallinn?

In a few months a sales tax of 1% shall be applied in Tallinn city. Although Tallinn City Council decided to introduce the sales tax already last year, there is a lot of uncertainty about this tax – from questions of compliance with the EU legislation and the Estonian Constitution to practical matters about goods and services subject to this tax etc, writes Ranno Tingas, Partner of Ernst & Young Baltic AS, specially for BBN.

Sales tax will apply from 1 June 2010 to retail trade, services and catering if goods are sold or services provided in Tallinn.

Taxable value for sales tax purposes is the price to customer reduced by VAT and sales tax. Sales tax applies irrespective whether a seller is registered for VAT or not.

According to the regulation of Tallinn City Council, the sales tax is paid by traders within the meaning of the Trading Act, whose place of business (or seat for e-commerce entities) is in Tallinn municipal area, who are registered in the register of economic activities and engage in the field of:

Supreme Court split on reform proposal

TALLINN — Twelve of Estonia’s 19 Supreme Court justices sent a letter to the Estonian government and parliament Monday saying that if a proposal by the chief justice passed, it would politicize the court.

The letter says the draft of the Courts Act does not match their understanding of the court system and if it would be approved by the parliament, it would politicize the position of chairman of the Supreme Court and mar the court’s decision-making process by imposing a military model where each part is subordinate to a higher position.

“If the chairman of the Supreme Court’s position is on top of the power pyramid and other court system representatives are are under his supervision, being obligated in a kind of cooperation, then we see a serious threat that the political influences might spread over the whole court system,” the justices wrote.

The letter was signed by justices Jüri Ilvest, Peeter Jerofejev, Henn Jõks, Ott Järvesaar, Eerik Kergandberg, Hannes Kiris, Ants Kull, Villu Kõve, Lea Laarmaa, Jaak Luik, Priit Pikamäe and Tambet Tampuu and represents a schism in the court between a majority of justices and Chief Justice Märt Rask, who authored the proposal.

Savisaar to introduce sales tax and boat tax in Tallinn

Tallinn City Government is proposing new local taxes in Tallinn for next year to bring more revenues into the budget.

According to the next year's draft budget that was submitted to the Tallinn City Council today, the city's next year's budget will be 7 billion kroons.  

In spite of poor budget revenues, the city is confident that it will succeed in balancing the budget by introducing new taxes.

Starting from July 2010, Tallinn will introduce a sales tax for traders and retailers which is expected to bring in 150 million kroons. Sales tax will be paid by natural persons who are self-employed in trade business or service sector and by legal persons that operate in the retail, catering or service segment.  

Tallinn will also introduce a boat tax payable by owners of yachts and boats that are up to 12 metres long.  

Estonia lacks a coherent alcohol policy

The head of the Estonian Association of Food Industries Sirje Potisepp stated that Estonia lacks alcohol policy, writes the National Broadcasting/LETA. In the past two years, excise taxes on alcohol have been raised by four times; if one were to include the surge by 10% that will enter into force in January, it could be stated that the excise tax rate on alcohol has grown by a total of 43%.

Potisepp noted that raising excise taxes is not the correct form of alcohol policy. “If the policy is restricted to raising excise taxes, I am of the opinion that this is not a correct way of forming a policy. The alcohol policy should require prevention, improving the culture of alcohol consumption and also taking into account the financial side so as not to grant opportunities to the illegal market,” she explained.

Producers of alcohol state that sales of beer has been falling in the part few years and the increase in the excise taxes contributes to this trend.

Estonia one step closer to Martial Law

Toomas Hendrik Ilves, the Estonian president, has signed a number of new amendments into law. The amendments called the “Bronze Night” package, involve tightening regulation of rallies and demonstrations.

The new laws ensure stricter penalties for “aggressive acts” against the state, treason, and “aggressive” activities by foreigners against the Republic of Estonia.

The new laws also establish penalties for “calling to support military action against Estonia”, or attempting to subvert the present regime, calling for a conspiracy against the Republic of Estonia, to influence the police or government officials, as well as the organization of mass unrest, and participation in them.

The package of amendments was developed after street protests by the Russian-speaking population of Estonia, when the Estonian government made an order to move the “Bronze Soldier” monument, dedicated to Soviet soldiers who liberated Estonia from the Nazi occupation, from it’s original site in central Tallinn to a less prominent location at a military cemetery.

Estonia on the way to limiting freedom of assembly ?

Estonian parliament has adopted changes to a controversial law which could restrict participation in mass protests.

The law deals with, among others issues, the procedure of amending the Criminal Code and the law on foreigners.

Earlier this year the lawmakers also proposed and voted for amendments introducing criminal responsibility for calls for mass protests and preparation for them, as well as for distributing false information about Estonia which put at risk public security. They also implied the possibility of stripping naturalized citizens of their status for getting involved in mass protests.

In July, Estonian President Toomas Hendrik Ilves dismissed the draft law, which sparked wide disputes in the country. The president said that Estonian laws should prevent crimes against the state and punish people for actions undermining Estonia’s independence, territorial integrity and constitutional order. At the same time, Hendrik believes that it is unacceptable to limit democratic freedoms, especially freedom of assembly and expression.

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Several politicians and public figures have criticized the proposed amendments, saying they would affect Estonia’s democratic development.