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A bill terminating a bilateral investment treaty with Finland has passed its first Riigkogu reading.


The treaty would have likely infringed European Union law, in treating some member states (i.e. Finland and Estonia) differently from the remainder.

The protection of investments and investors from other EU member states is regulated by EU law, rendering bilateral agreements between member states irrelevant and contrary to protecting investor rights from any of the 25 other EU member states.

As a result, the treaty has been annulled, following pressure from the European Commission that member states terminate such mutual investment protection agreements.

Failure to do so may lead to infringement proceedings, which the commission has already opened against five member states, BNS reports.

Terminating the treaty still requires domestic legislation; the corresponding bill passed its first Riigkogu reading Thursday, and also amends the treaty itself, to overrule a clause which would have seen it applying to investments for another decade – in other words it will be fully terminated.

The freedom of establishment of investments and free movement of capital and payments are in particular governed by EU law.

ERR News


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