TALLINN – The Riigikogu on Thursday finished the first reading of a bill to amend and terminate the treaty on the facilitation and protection of investments between Estonia and Finland.
Bilateral treaties on the facilitation and protection of investments deal with areas that are regulated by EU law -- primarily the freedom of establishment and free movement of capital and payments. Hence the protection of investments and investors from other EU member states is regulated by EU law and bilateral agreements between member states have no substantive purpose.
The termination is necessary to ensure equal treatment of investors from all EU member states under EU law, the Riigikogu press service said.
The motion handled by the parliament would amend the agreement prior to its termination, as according to the text of the agreement it will continue to apply to the investments made during its validity for ten years after its termination. Hence the agreement has to be amended so that its application would discontinue fully at the moment of its termination.
Also the European Commission has demanded that member states terminate their mutual investment protection agreements to preclude a contradiction with EU law, and has opened related infringement proceedings against five member states.