Europaudvalget 2003-04
EUU Alm.del Bilag 171
Offentligt
Comprehensive monitoring report
on
Estonia’s
preparations for membership
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A.
B.
INTRODUCTION ................................................................................................................................ 3
ECONOMIC ISSUES ........................................................................................................................... 5
1.
Economic developments ........................................................................................................... 5
2.
Implementation of recommendations for improvements........................................................... 7
COMMITMENTS AND REQUIREMENTS ARISING FROM THE ACCESSION
NEGOTIATIONS ................................................................................................................................. 9
1.
Administrative and judicial capacity....................................................................................... 11
Public administration............................................................................................................... 11
Judicial capacity ...................................................................................................................... 12
Anti-corruption measures........................................................................................................ 13
Translation of the acquis into Estonian ................................................................................... 14
2.
The chapters of the
acquis.......................................................................................................
16
Chapter 1: Free movement of goods....................................................................... 16
Chapter 2: Free movement of persons .................................................................... 18
Chapter 3: Freedom to provide services ................................................................. 19
Chapter 4: Free movement of capital...................................................................... 20
Chapter 5: Company law ........................................................................................ 21
Chapter 6: Competition policy................................................................................ 23
Chapter 7: Agriculture ............................................................................................ 24
Chapter 8: Fisheries ................................................................................................ 27
Chapter 9: Transport policy.................................................................................... 29
Chapter 10: Taxation .............................................................................................. 30
Chapter 11: Economic and monetary union ........................................................... 32
Chapter 12: Statistics .............................................................................................. 33
Chapter 13: Social policy and employment............................................................ 33
Chapter 14: Energy................................................................................................. 35
Chapter 15: Industrial policy .................................................................................. 37
Chapter 16: Small and Medium-sized Enterprises ................................................. 37
Chapter 17: Science and research ........................................................................... 38
Chapter 18: Education and training ........................................................................ 38
Chapter 19: Telecommunications and information technologies ........................... 38
Chapter 20: Culture and audio-visual policy .......................................................... 39
Chapter 21: Regional policy and co-ordination of structural instruments.............. 39
Chapter 22: Environment........................................................................................ 41
Chapter 23: Consumer and health protection ......................................................... 44
Chapter 24: Justice and home affairs...................................................................... 45
Chapter 25: Customs union .................................................................................... 48
Chapter 26: External relations ................................................................................ 49
Chapter 27: Common foreign and security policy.................................................. 50
Chapter 28: Financial control ................................................................................. 51
Chapter 29: Financial and budgetary provisions .................................................... 52
CONCLUSION................................................................................................................................... 53
C.
D.
STATISTICAL ANNEX.............................................................................................................................. 55
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A.
I
NTRODUCTION
The accession negotiations with Estonia were successfully concluded on 13 December
2002 and the Treaty of Accession was signed on 16 April 2003. In a referendum held on
14 September 2003, a majority of Estonians expressed their support for membership of
the European Union. Following ratification of the Treaty of Accession, Estonia will join
the EU on 1 May 2004.
In its Strategy Paper “Towards the enlarged Union”, which accompanied the 2002
Regular Reports, the Commission stated that:
“Acceding countries need to implement the acquis by the date of accession, except in
cases where transitional arrangements have been agreed. Commitments undertaken
in the negotiations must be fully met before accession. The Regular Reports point to
a number of areas where further improvements need to be made in the context of the
political and economic criteria and in relationship to the adoption, implementation
and enforcement of the acquis. These should be vigorously pursued. In order to
analyse progress and to facilitate successful membership of the European Union, the
Commission will regularly monitor this and report to Council. The Commission will
produce six months before the envisaged date of accession a comprehensive
monitoring report for the Council and the European Parliament.”
The Copenhagen European Council in December 2002 concluded that:
“Monitoring up to accession of the commitments undertaken will give further
guidance to the acceding states in their efforts to assume responsibilities of
membership and will give the necessary assurance to current Member States.”
and the Thessaloniki European Council in June 2003 stated that:
“…the ten acceding States are encouraged to keep up their efforts so that they are
fully prepared to assume the obligations of membership by accession. This also
includes the necessary translation of the Community acquis. With a view to making a
success of enlargement, the monitoring of these preparations has been intensified on
the basis of reports submitted regularly by the Commission.”
As the accession date of 1 May 2004 draws closer, this report presents a comprehensive
state of play of the findings of the regular monitoring carried out by the Commission,
building upon the findings of the 2002 Regular Report for Estonia. The report contains
two main parts.
The first part deals with economic issues. It describes briefly economic developments in
Estonia, and then goes on to assess the implementation of the necessary economic
reforms in the areas highlighted in the conclusions of the 2002 Regular Report for
Estonia as being in need of further improvements.
The second part gives an overview of where Estonia stands in implementing all
commitments and requirements arising from the accession negotiations for each
acquis
chapter, both in terms of legislation and from the perspective of implementing structures,
including administrative capacity and enforcement. In view of their importance for the
implementation and enforcement of the
acquis,
the overall state of readiness of the public
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administration and the judicial system and the development of effective anti-corruption
measures are assessed in an introductory section to this part.
This report reflects the situation at the end of September 2003. It records decisions
actually taken, legislation actually adopted, measures actually implemented and
structures actually in place and functioning by that date.
For each chapter of the
acquis,
this report identifies the areas in which Estonia is
expected to be, or is already, in a position to implement the
acquis
and the areas where
further action is still needed. Where relevant, the report also points out issues where
lagging or deficient preparations are a cause of serious concern. This assessment starts
from the premise that Estonia must be prepared for membership from the date of
accession. In cases where transitional arrangements have been agreed in the accession
negotiations, their effect on Estonia’s obligations is duly reflected in the assessment.
Numerous sources of information have been used to compile this report. Estonia was
invited to provide information on its state of preparedness. The report also draws on
information provided by Estonia within the framework of the Association Agreement and
the accession negotiations, as well as on peer reviews that have taken place to assess its
administrative capacity in specific areas. Council deliberations and European Parliament
reports and resolutions have been taken into account in drafting it.
1
Where relevant, the
Commission has also drawn on assessments made by various international organisations
such as the Council of Europe, the OSCE and the international financial institutions, and
by non-governmental organisations.
1
For the European Parliament the rapporteur is Mr Michael Gahler.
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B.
E
CONOMIC ISSUES
In its 2002 Regular Report the Commission concluded that
“Estonia is a functioning market economy. The continuation of its current reform
path should enable Estonia to cope with competitive pressure and market forces
within the Union.
Improvements can be made by the government and the private sector to the
functioning of labour markets by taking a more active role to tackle the
unemployment problem. Furthermore, the consolidation of the local authorities’
finances should be taken up to reinforce the prudent stance of fiscal policy. In
addition, the restructuring of the oil shale sector should be actively pursued.”
The principal purpose of this part of the Comprehensive Monitoring Report is to assess
the implementation of recommendations for improvements in the areas identified in last
year’s Regular Report. The focus is on the change since last year and not on the overall
degree of functioning of the market economy or degree of competitiveness. The
assessment can be found in Section 2. Section 1 briefly describes recent economic
developments in Estonia including the continuation of the reform path since last year’s
Report.
1.
Economic developments
Against the background of weak external demand, macroeconomic performance in
Estonia remained solid but the current account deficit widened appreciably.
GDP
growth, of some 6% in 2002, was underpinned by buoyant private consumption growth
which reached 9.3% in 2002, and was driven by low interest rates, strong wage and
employment growth. Against the backdrop of a global investment slump, investment in
Estonia grew by 16.2% in 2002, owing to FDI inflows and low interest rates. The
mismatch between domestic and foreign demand was manifested in a robust demand for
imports (10.2% increase in 2002), and a relatively sluggish export performance (6%
increase in 2002), and consequently in a deterioration in the current account deficit to
some 12.3% of GDP in 2002. Although, a number of large one-off items—mainly
investment goods—do account for a large part of the deficit, a structural deterioration of
the current account was also noticeable. Net foreign direct investment inflows—at some
2.5% of GDP—were considerably lower than during the previous year, although net
portfolio flows increased sharply mainly due to several bond issues in the eurobond
market. Inflation, which had accelerated to almost 7% in mid-2001 receded subsequently
to 2.7% by end-2002 owing to exchange rate movements, and other temporary factors
(e.g., food prices), while core inflation remained stable at around 4% throughout the
year. Labour market conditions continued to improve, and as a result of an increase in the
employment rate (to some 62%), the unemployment rate declined to 9.1% of the labour
force in 2002. The general government surplus increased to 1.3% of GDP mainly on
account of buoyant growth, and despite additional spending of some 1.1% of GDP
approved by the parliament in two supplementary budgets.
2
The local governments
continued to be a drain on the public finances and a bigger-than-expected deficit offset
part of the surplus of the central government.
2
Better-than-expected growth in 2002 resulted in additional tax revenues of some 2% of GDP, compared
to the estimate included in the 2002 Budget.
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Estonia
Real GDP growth rate
Inflation rate
- annual average
- December-on-
December
Unemployment rate
- LFS definition
General government
budget balance
Current account balance
per cent
per cent
per cent
per cent
per cent of
GDP
per cent of
GDP
million
ECU/Euro
Per cent
of exports
of goods
and
services
million
ECU/Euro
Per cent
of GDP
Main Economic Trends
1998
1999
2000
4.6
8.8
-0.6
3.1
7.3
3.9
2001
6.5
5.6
2002
6.0
3.6
2003
latest
5.2 Q1
1.9
August
a
1.4
August
10.9 Q1
5.2
9.2
-0.4
-9.1
3.7
11.3
-4.0
-5.7
5
12.5
-0.4
-5.8
4.2
11.8
0.2
-6.0
2.7
9.1
1.3 p
-12.3 p
Gross foreign debt of the
whole economy
- debt export ratio
-429
39.6
-277
32.9
-326
33.0
-378
33.1
-847
:
b
-687 Jan.-
July
b
1 472
10.9
1 238
5.8
1 728
7.6
1 854
9.6
:
4.4 p
Foreign direct investment
in flow
- balance of payments
data
million
513
284
ECU/Euro
Sources: Eurostat. National sources. OECD external Debt Statistics
a
b
425
603
307
b
427 Jan.-
July
b
Moving 12 months average rate of change.
Source: Website of the National Bank.
P= provisional figures
The authorities adhered to their reform path, particularly in the areas of pension reform
and financial supervision.
An independent Financial Supervision Authority was
established at the beginning of 2002 and the reform of the pension system advanced
considerably with the implementation of the second pillar. An overhaul of the hospital
system, which consists of an excessive number of hospital units from the pre-
independence era, is ongoing and in June 2002 the Health Insurance Act was approved
by parliament, and is expected to provide the basis for the reform.
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Main Indicators of Economic Structure in 2002
Population (average)
GDP per head
a
Share of agriculture in:
- gross value added
- employment
Gross fixed capital formation/GDP
Gross foreign debt of the whole
economy/GDP
c
Exports of goods & services/GDP
Stock of foreign direct investment
d
Long term unemployment rate
Source: Eurostat
Per Cent
Per Cent
Per Cent
Per Cent
Per Cent
Million Euro
Euro per head
Per Cent of labour force
5.4
6.5
28.5
30.0
85.1
2843
2092
4.8
b
Thousand
PPS
Per cent of EU average
1,359
41
a Figures have been calculated using the population figures from National Accounts, which may differ from those used in demographic statistics.
b Agriculture, hunting, forestry and fishing.
c Data refer to 2001.
d Data refer to 2000.
2.
Implementation of recommendations for improvements
The expansionary
fiscal policy,
notably during 2002 and 2003, at the level of the local
and central governments poses a risk to macroeconomic stability, particularly in the
light of a widening current account deficit.
A clear commitment by authorities over the
years toward fiscal consolidation has been paramount in maintaining a stable
macroeconomic environment, and key in stimulating growth in Estonia. Nonetheless,
since the 2002 Regular Report was published the fiscal position of local government has
deteriorated markedly. In particular, the local government deficit turned out some 0.5%
of GDP higher than had been anticipated (1% of GDP vis-à-vis 0.6% of GDP expected
by the authorities in April 2002), offsetting a central government surplus of some 1.3%
of GDP (in ESA 95 terms). To balance the general government budget, the growing
deficits at local government level are being offset by surpluses by the central
government, while for budgeting purposes the central government is internalising the
expected local government deficit. To improve the expenditure management system for
general government more co-ordination between central and local government is needed,
both in terms of budgetary planning and execution. At the same time—and against the
background of above-trend GDP growth, and a widening current account deficit,—the
central government approved two supplementary budgets in 2002 introducing additional
spending of some 1.1% of GDP and another more recently in June 2003 for additional
expenditures of 0.7% of GDP.
3
Although comparatively the fiscal situation in Estonia is
indeed very strong, pro-cyclical fiscal policy can have adverse consequences from
macroeconomic stabilisation viewpoint, and in addition it may limit the room for fiscal
policy to manoeuvre during times of sub-potential growth. Indeed, the practise of
balancing the budget on a year-on-year basis, instead of over the cycle, creates an
incentive to pursue pro-cyclical fiscal policy. Instead — and particularly in view of the
large current account deficit—the government ought to play a bigger role in restricting
domestic demand by allowing the automatic stabilisers to operate fully, and by pursuing
tax and expenditure policies that are not likely to exacerbate the current imbalances.
3
Windfall revenues to the central government, as a result of better-than-expected growth, reached some
2% of GDP in 2002.
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Such actions are paramount both for maintaining macroeconomic stability in Estonia,
and for setting a standard for fiscal prudence for the general government sector.
Active labour market policies are being pursued to address the
unemployment
problem
and progress to-date has been satisfactory.
The unemployment rate declined
significantly from 14.6% in the first quarter of 2000 to 10.6% in 2003, although large
regional disparities continue to persist. However, this improvement was the result of
modest employment gains, and a significant decline in the economically active
population; employment increased by some 2% while the economically active population
declined by almost 2.5% during this period. Severe skill mismatches, and a large number
of long-term unemployed pose a significant challenge to policy makers, and are likely to
hinder a swift improvement in the labour market. Nonetheless, significant efforts are
being undertaken to introduce, and implement, policies that should address these specific
issues with particular emphasis on re-integrating the long-term unemployed —
particularly in regions worse hit by the restructuring of the economy — promoting
vocational training and life-long learning, and setting up an effective institutional
framework that is seen as supporting job creation. These and other policies are set out in
the Employment Action Plan of the Republic of Estonia 2002, the Joint Assessment of
Employment Policy Priorities and subsequent progress reports of March 2003, and the
National Development Plan. The authorities should put particular emphasis on the
implementation of these policies that are designed to increase flexibility in the market,
and promote sustainable growth employment.
The
restructuring of the oil-shale
sector is advancing, but there has been no further
liberalisation of the energy market (see also Chapter 14).
Considerable investments have
been put in place for the renovation of the Narva Power Plant and a number of oil-shale
mines have been closed down. The ongoing investment program should enhance Eesti
Energia's competitiveness while at the same time allowing it to produce electricity in a
environmentally sound manner. Estonia needs to ensure that market opening takes place
according to commitments and that access to the grid occurs on a non-discriminatory
basis. Further liberalisation of the electricity market, in accordance with the agreed
transitional period with the EU as a minimum, should be seen as beneficial to consumers
and producers of electricity alike, and key to preserving the country's competitiveness. In
addition to the macroeconomic benefits that would arise from market liberalisation, a
further strengthening of the regulatory framework could further contribute towards a
more efficient operation of the market and allocation of resources.
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C.
C
OMMITMENTS
NEGOTIATIONS
AND
REQUIREMENTS
ARISING
FROM
THE
ACCESSION
As we approach the actual date of accession and the entry into force of the mutual rights
and obligations enshrined in the Treaty of Accession, it is necessary to focus efforts on
ensuring that Estonia is fully prepared in all areas of the
acquis
from the start of its
membership. In other words, Estonia must meet its commitments and requirements
arising from the accession negotiations.
In the 2002 Regular Report on Estonia, the Commission found that:
“Estonia is generally meeting the commitments that it has made in the negotiations.
However delays have occurred in adopting fisheries legislation, implementing a
fisheries information system, ensuring the full operation and compliance of the
Fishing Vessel Register, and in aligning legislation on air quality and radiation
protection. These issues need to be addressed.
Bearing in mind the progress achieved since the Opinion, the level of alignment and
administrative capacity that Estonia has achieved at this point in time and its track
record in implementing the commitments that it has made in the negotiations, the
Commission considers that Estonia will be able to assume the obligations of
membership in accordance with the envisaged timeframe. In the period leading up
to accession, Estonia needs to continue its preparations, in line with the
commitments it has made in the accession negotiations.”
As regards the administrative capacity to implement the
acquis,
the overall findings were
as follows:
“In most areas Estonia is reasonably advanced in terms of developing the
necessary administrative capacity to implement and enforce the acquis. However,
as highlighted above, there are a number of areas where much has already been
done but further efforts will also be needed to complete the work. In particular,
these areas are free movement of persons, fisheries, agriculture, taxation, social
policy and employment, energy, regional policy, environment, customs and justice
and home affairs.”
As part of its continuous monitoring, the Commission services addressed two letters to
Estonia in March and June 2003 expressing concern over its preparedness in terms of
adoption of legislation and development of administrative capacity within the fisheries
chapter, and labour law and equal treatment within the social policy and employment
chapter, and calling for urgent action to remedy these shortcomings.
In order to give further guidance to Estonia in its preparation efforts and to give the
necessary assurance to current Member States and other future Member States, this part
of the comprehensive monitoring report, in Section 2, gives an overview of where
Estonia currently stands in implementing all commitments and requirements arising from
the accession negotiations for each of the 29 chapters of the
acquis.
It covers the whole
body of the
acquis,
on a chapter-by-chapter basis, both in terms of legislation and from
the perspective of implementing structures, including administrative capacity and
enforcement.
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The principal commitment undertaken by Estonia in the accession negotiations is to be
fully prepared for membership in all areas by the date of accession. In a number of areas,
however, commitments were made to put in place and implement the
acquis
according to
specific timetables even before accession. This report examines the extent to which these
commitments have been met, and where delays have occurred, but the principal focus of
the assessment remains the requirement that Estonia must be fully prepared as from
accession. Naturally, in cases where transitional arrangements have been agreed, their
effect on Estonia’s obligations is duly reflected in the assessment. On the other hand, it
should be underlined that, in order for Estonia to make effective use of its eligibility for
Community structural funds from 1 January 2004, the relevant
acquis
in areas such as
public procurement, state aid and environmental protection will need to be fully
respected from 1 January 2004 in relation to the implementation of structural funds
actions
4
.
For each chapter, a conclusion is provided, which is structured in the following way.
Firstly,
it identifies those areas where Estonia is essentially meeting the commitments
and requirements arising from the accession negotiations and is expected to be, or is
already, in a position to implement the
acquis
from accession. This does not exclude the
possibility that certain actions are still to be taken, but these should under foreseeable
circumstances not pose particular difficulties.
In a
second
paragraph, the assessment identifies any areas where important further action
is still needed in order to complete preparations for membership. In some cases these
preparations are ongoing, but enhanced efforts or quicker progress may be called for.
These are issues which can still be remedied taking into account the accession date of 1
May 2004 but which require the special attention of the authorities.
Thirdly,
where relevant, the assessment also identifies issues that are of serious concern.
These are areas where serious shortcomings exist which are likely to persist after
accession unless immediate remedial action is taken. These issues require the urgent
attention of the authorities. In view of their importance for the implementation and
enforcement of the
acquis,
the
overall
state of readiness of the public administration and
the judicial system and the development of effective anti-corruption measures, together
with the question of the translation of the
acquis
into Estonian, are evaluated in a
separate Section 1.
4
See also the Commission Communication "on the implementation of commitments undertaken by the
acceding countries in the context of accession negotiations on Chapter 21 - Regional policy and
coordination of structural instruments" of 16 July 2003 (COM(2003) 433 final).
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1.
Administrative and judicial capacity
Public administration
Some structural changes took place in late 2002. The Ministry of Economic Affairs and
the Ministry of Transport and Communications were merged into a new Ministry of
Economic Affairs and Communications. Responsibility for the Public Procurement
Office was transferred from the Ministry of Economic Affairs to the Ministry of Finance.
Responsibility for the Competition Board was transferred from the Ministry of Finance
to the Ministry of Economic Affairs and Communications. A new Health Protection
Board was established.
In addition, the Office of Public Administration Reform at the State Chancellery was
abolished and its functions divided between three ministries (Justice, Finance and
Interior). Co-operation between these bodies is currently satisfactory. However, in the
longer term more formal mechanisms for ensuring the coherent development of the
public administration would be useful.
Since 2001 there have not been any changes to the status of civil servants and other
public employees established in the Public Service Act, in force since 1996. Estonia’s
civil servants are required to perform their tasks in an impartial and politically neutral
way. The draft new Civil Service Act remains to be adopted.
Satisfactory rules are in place to provide for the openness and transparency of the public
service. The Office of the Legal Chancellor supervises the functioning of state
institutions and acts as ombudsman to settle complaints by citizens about public service
activities.
No significant changes have taken place regarding the number and distribution of civil
servants between different bodies, which demonstrates the relative overall stability of the
Estonian civil service. At the end of 2002, the total number of employees in the Estonian
central administration was around 20 600, representing a small increase from the
previous year. However, 9 % of posts are unfilled and staff turnover is relatively high.
Whether the staffing level is sufficient varies from one public body to another (see
assessment for each chapter under Part C.2.).
As highlighted in the 2002 Regular Report, certain weaknesses in the conditions of
service and career structures should be addressed, in particular, a lack of transparency in
recruitment, promotion and remuneration levels. The level of education of staff continues
to improve: 48 % of civil servants in the state administration have higher education,
compared to 42 % in 2001 and 40 % in 2000.
Training is well developed. The Estonian Institute for Public Administration has been
reorganised and renamed the Centre for Public Service Training and Development. Its
priorities are, as of December 2002, approved on an annual basis by the government.
Responsibility for training for EU membership is shared between the EU Secretariat and
ministries. The number of officials trained in EU subjects during 2002 was around 80 %
higher than in 2001. A strategy for EU training from 2003-2005 was approved at the end
of 2002.
Last December the previous government approved a plan for co-ordination of EU
policies after accession, which is being gradually introduced; this began in March 2003.
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Overall, the EU Secretariat, functioning under the Prime Minister, will play the key role
in the co-ordination system. The Administrative Co-operation Act also entered into force
in July 2003 and includes provisions on granting the authority to perform public
administration duties, as well as on the provision of professional assistance between
administrative authorities. However, there are continued co-ordination problems in
particular areas of the administration (noted
as relevant for each chapter in Part C.2).
The Government is also taking steps to improve the planning system, which up until now
has been characterised by too many unrelated plans with insufficient budget projections.
The Government adopted a budget strategy document for 2004-2007, which sets out the
basic macroeconomic framework and funds available for this period, and on the basis of
which four-year ministerial budget strategies will be developed.
On the initiative of the new coalition, the Parliament adopted a law creating the post of
assistant ministers, to be appointed by the Government for the same term as ministers,
who will be in charge of strengthening political management. Ministers are not obliged
to have assistant ministers, and none have been appointed so far.
Estonia is organised into 15 counties and 241 municipalities, some of them very sparsely
populated. As reported in the 2002 Regular Report, the reform and voluntary
consolidation of local government proposed in 2001 has had little impact. In some cases
this leads to difficulties in financing and implementing policies at a local level, and could
potentially pose difficulties for the effective implementation of the structural funds.
Judicial capacity
The new Courts Act has been in force since July 2002 and constitutes a major step
forward regarding the independence of the judiciary. Under the law, a new balance
between the Ministry of Justice and the courts has been reached, and the system appears
to function satisfactorily. The new penal code, which entered into force in September
2002, was another important step in improving the effectiveness of the judicial process,
and consolidated a series of reforms that were already in force. However, a number of
key areas of judicial reform remain to be completed. The new Code of Criminal
Procedure, which will enter into force in July 2004, should bring substantial changes to
the Estonian judicial system, particularly by enhancing the prosecutor's role in the
supervision of investigations. Proceedings in court will take the form of a more
adversarial system. Training is planned for the end of 2003 and 2004 both for judges and
prosecutors to facilitate the entry into force of the new Code.
The constitution provides Estonian judges with a high degree of independence. The
Courts Act further reinforced the statutory independence of judges by organising a
mechanism of partial self-administration of courts, whereby the Court Administration
Council and the Ministry of Justice share the responsibility for the reorganisation of the
administration of courts. Proper implementation of provisions relating to the new Court
Administration Council is essential for the consolidation of judicial independence and
further improvement of judicial capacity.
The status and remuneration of judges have improved significantly with the entry into
force of the Courts Act. The situation regarding vacancies for judges also improved
following the entry into force of the Courts Act: in September 2003, there were 237
judges in place and only 3 vacancies. There is still a lack of transparency regarding
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examinations for candidate judges and performance evaluation for judges.
Standardisation of exams and evaluations should be carried out as planned, examiners
should be better supervised and exams should be made more relevant. The Association of
Judges should continue its reflections on the development of a new evaluation system,
which could assist monitoring and improvement of judicial performance, whilst
safeguarding judicial independence.
The duration of judicial proceedings has decreased slightly. The average time for
managing a criminal case decreased by 5 days in 2002, from 3 months and 21 days in
2001 to 3 months and 16 days in 2002.
The backlog of criminal cases, defined as cases pending for longer than one year,
decreased to 1502 in 2002 as compared to 1992 in 2001. The backlog of civil cases,
defined as cases pending for more than 2 years, decreased to 1482 in 2002 from 1640 in
2001, partly thanks to the filling of vacancies for judges in Ida-Virumaa, where many of
the oldest cases had been pending. However, at the end of 2002, a total of 12,690 civil
cases had not been decided as compared to 10,623 cases at the end of 2001 (an increase
of 19.2%).
The training of judges and prosecutors is being implemented, in line with the training
strategy 2001-2004. The Estonian Law Centre Foundation has been recognised as the
National Training Centre for the Judiciary and is also able to provide specific training for
prosecutors. Development of judicial training system is on track but attention should be
paid to ensuring that the budget and human resources of the Law Centre are adequate.
Training on economic crimes (corruption, money laundering, intellectual property
protection, etc.), EU law, international law, human rights and judicial skills should
receive particular attention. A general training strategy still needs to be developed for
prosecutors.
Concerning legal aid, the draft Legal Services Act, which was submitted to Parliament at
the end of 2001, has yet to be adopted and may not enter into force before 2005. It is
possible to be granted free legal aid by submitting an application to the court for the
appointment of a lawyer at the expense of the state. This is provided for in the codes of
criminal, civil and administrative procedure and also in connection with administrative
offences. However, while free legal aid is routinely granted in criminal cases, its
availability in civil and administrative cases seems to remain rather limited.
Anti-corruption measures
International studies consistently indicate that corruption in Estonia remains at a
relatively low level.
The legislative framework concerning the fight against corruption in Estonia is mostly in
place. The latest amendments to the Anti-Corruption Act entered into force in February
2003.
Estonia still needs to develop a comprehensive national strategy, complete with concrete
implementation measures, for fighting corruption in the public sector, although some
individual institutions (e.g. the Police and Customs Board) have anti-corruption activity
plans. Customs and border guards remain vulnerable to corruption. An inter-ministerial
committee was established in May 2003 to develop an anti-corruption strategy and co-
ordinate the implementation of anti-corruption measures.
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Estonia should continue to make its efforts against corruption more effective and
coherent, notably by drafting action plans in the bodies concerned, improving co-
ordination between the supporting authorities, and devising and implementing an early
detection strategy.
The institutional framework is in place. However, in order to improve the effectiveness
of anti-corruption provisions, the procedure concerning conflicts of interests and the
declaration of assets by elected officials and civil servants performing managerial
functions, as well as law enforcement officers, should be strengthened. Also the
functioning of both the Parliamentary Anti-corruption Committee and of the Public
Procurement Office should be improved, and the latter’s independence increased.
The civil service code of ethics became effective in January 1996. However, it is brief
and vague, and awareness of the code remains low. The action plan for its
implementation, including training and seminars for civil servants and the dissemination
of guidelines, remain to be fully carried out.
Training is being carried out internally for the police and security police; training for
judges and prosecutors should also be implemented.
The number of corruption cases, although very low, has increased since 1999 (from 8 in
1999 to 15 in 2002), due to improvements in investigation and wider awareness amongst
the public. There have been a number of cases of corruption in the administration.
As regards international law, Estonia ratified the Council of Europe Convention on
Laundering, Search, Seizure and Confiscation of the Proceeds from Crime, as well as the
Council of Europe Civil Law Convention on Corruption. The Criminal Law Convention
on Corruption, adopted in December 2001, entered into force in July 2002. Estonia
participates in the Baltic Anti-Corruption Initiative (BACI), which is supported by the
OECD Secretariat.
Estonia continues to participate in the Council of Europe Group of States against
Corruption (GRECO). GRECO has evaluated the Estonian response to its 2001
evaluation report. On the 12 recommendations made by GRECO, nine have been
implemented and three are under implementation. While noting the progress achieved by
Estonia, GRECO has noted in particular that its recommendations concerning: making
efforts against corruption more coherent and effective; the role of audit, particularly at
local level; and functioning and independence of the Public Procurement Office, have
been only partly implemented.
Translation of the acquis into Estonian
In accordance with Articles 2 and 58 of the Act of Accession, all acts adopted by the
Union’s institutions and the European Central Bank prior to accession become applicable
to the new Member States and are to be published in the Official Journal of the European
Union in the new official languages. While the EU institutions take responsibility for the
final revision and publication of the translations, it falls to the acceding states to produce
the translations and to ensure a thorough legal and linguistic revision.
Since the beginning of the year, Estonia has provided a constant and high number of
revised texts. The quality of the Estonian version of the
acquis
appears to be satisfactory.
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As the whole process of translation and revision in Estonia is fully integrated,
consistency of terminology and of quality is satisfactory.
Therefore, if the present flow is maintained, there should be no major problems for the
publication of the full Special Edition of the Official Journal in Estonian.
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2.
The chapters of the
acquis
As indicated, the following review of Estonia’s ability to assume the obligations of
membership has been structured in accordance with the list of 29
acquis
chapters.
Accordingly, this section opens with an assessment of the
acquis
relating to the
cornerstones of the internal market which are known as the “four freedoms”, and
continues with a systematic review of each of the chapters, covering all aspects of the
acquis,
including sectoral policies, economic and fiscal affairs, regional policy,
environment, justice and home affairs, external policies, and financial questions.
Chapter 1: Free movement of goods
The principle of the free movement of goods implies that products must be traded freely
from one part of the Union to another. In a number of sectors, this general principle is
supplemented with a harmonised regulatory framework, following the “old approach”
(imposing precise product specifications) or the “new approach” (imposing general
product requirements). The transposition of harmonised European product legislation
represents the vast majority of the content of this chapter. In addition, efficient
administrative capacity to apply horizontal and procedural measures in areas such as
standardisation, certification and market surveillance is essential. This chapter also
covers detailed EC rules on public procurement, requiring specialised implementing
bodies.
Legislation covering the
horizontal and procedural measures
necessary for the
administration of the Community product
acquis
in the new approach sector is in place
and is in line with the
acquis.
The implementing structures for standardisation,
metrology, accreditation, and conformity assessment are all in place. However, the
comprehensive market surveillance strategy remains to be finalised, with the result that
the present responsibilities of the organisations carrying out market surveillance cannot
be considered final. Estonia’s standardisation body has applied for full membership of
CEN and CENELEC. The Estonian National Communications Board is a full member of
ETSI.
Estonia has largely transposed the
sectoral legislation
under the
new approach.
Legislation has been adopted which aims at transposing the directives on equipment and
protective systems intended for use in potentially explosive atmospheres, recreational
craft, personal protective equipment, radio and telecommunications terminal equipment,
and the cableways directive. Transposition of directives on medical devices, non-
automatic weighing instruments, and explosives for civil use must be completed.
Legislation transposing directives on toys, appliances burning gaseous fuel, simple
pressure vessels, pressure equipment and construction products must be amended to
ensure full alignment. In the area of construction products, many of the implementing
measures are only partly transposed. The development of laboratory capacity for toys
must be completed.
As regards the
old approach
directives, Estonia has partly transposed the
acquis
in these
product sectors. Legislation has been adopted which aims at transposing the directives on
legal metrology and pre-packaging, fertilisers, detergents, cosmetics, motor vehicles and
tractors, footwear, and good laboratory practice. Having transposed the majority of EC
legislation in this area, Estonia still needs to complete the transposition of the remaining
vertical directives on foodstuffs. Transposition must also be completed as regards gas
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cylinders, electro-medical equipment, some chemical products, pharmaceuticals, glass,
textiles, and wood.
Estonia has taken the steps necessary to ensure the creation, reinforcement, and
operational capacity of the institutions required to manage the
acquis
in nearly all of the
sectors covered by the old approach sector directives. However, continued attention is
required as regards the further development of the Chemicals Notification Centre.
Having recognised that the identification of "new" chemical substances on its market is a
matter of priority, Estonia should provide for the appropriate notification of such
substances in accordance with the
acquis.
In the area of food safety Estonia has made considerable progress in transposing the
acquis.
It must now complete transposition and remove the incompatible pre-marketing
authorisation of foodstuffs. Estonia should further improve its institutional capacity by
implementing its action plan to address shortcomings. There is a need to clarify overlap
between inspection services, to improve horizontal co-ordination, and to increase the
level of sampling. Estonia must also proceed with its action plan for implementing
Hazard Analysis and Critical Control Points (HACCP) principles, in particular the
training of inspectors to audit implementation of HACCP principles, and the
establishment of guides to good hygiene practice. Further efforts are needed to ensure
appropriate control of genetically modified and novel foods. Estonia is making adequate
progress in preparing itself for participation in the Rapid Alert System for Food and Feed
(RASFF). Aspects of food safety are also covered under
Chapter 7 – Agriculture.
In the field of
public procurement
Estonia’s legislation remains to be fully aligned,
pending adoption of the draft Public Procurement Amendment Act. The Public
Procurement Office has been moved from the Ministry of Economy to the Ministry of
Finance. Although it is operational, administrative capacity needs to be reinforced
inter
alia
through training of staff and awareness raising amongst contracting authorities.
In the
non-harmonised area,
Estonia has conducted screening of national legislation
possibly in contradiction with the free movement of goods; this screening must be
continued and the identified barriers must be removed. In particular, amendments remain
to be made to remove the obstacles in the areas of environment and agriculture. Estonia
needs to include mutual recognition clauses in existing and planned legislation.
Transposition of the
acquis
as regards arms control is largely complete. However,
transposition remains to be completed in the specific area of the European firearms pass.
Only minor amendments are needed as regards the transposition of the
acquis
concerning
cultural heritage objects. The obligation under Estonian law that customs authorities
verify the safety of goods exported from and imported into the customs territory is not
completely in line with
acquis
requirements. A co-ordination structure for bodies
responsible for the checks on product conformity for imports from third countries has
been created.
Conclusion
Estonia is essentially meeting the requirements for membership as concerns
horizontal
and procedural measures
necessary for the implementation of EC legislation in the new
approach sectors and most of the
new approach sectoral legislation.
Once the
remaining aspects of the new approach
acquis
are put in place, administrative structures
further developed and the comprehensive market surveillance strategy finalised, Estonia
should be in a position to implement the
acquis
from accession.
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Estonia is partially meeting the requirements in respect of
old approach sectoral
legislation, public procurement
and the
non-harmonised area.
In the area of old
approach sectoral legislation, Estonia must make further efforts to transpose the
remaining
acquis.
Attention must be given to completing the transposition of the
acquis
on food safety and to ensuring proper implementation in this area. Additional efforts
should be made to provisionally notify "new" chemical substances prior to accession so
as to ensure the continued marketing of such substances. Estonia must also give priority
to completing transposition of the
acquis
on public procurement; the required
amendment must now be adopted without delay. Also, administrative capacity must be
significantly reinforced in this area. Finally, attention must be paid to ensuring the
implementation and enforcement of the principle of mutual recognition, as well as to the
abolition of trade barriers that have been identified.
Chapter 2: Free movement of persons
The
acquis
under this chapter provides for non-discriminatory treatment of workers who
are legally employed in a country other than their country of origin. This includes the
possibility of cumulating or transferring social security rights, which requires
administrative cooperation between Member States. In order to facilitate the practice of
certain professions, the
acquis
under free movement of persons also includes specific
rules concerning mutual recognition of qualifications and diplomas; for certain
professions a harmonised training curriculum must be followed to be able to use the
professional title. Furthermore, this area also covers the residence and voting rights of
EU citizens in any Member State.
In the field of
mutual recognition of professional qualifications,
major work remains
to be carried out. Estonia’s legislation on the general system and on lawyers is in line
with the
acquis.
However, the relevant sectoral legislation on the recognition of
qualifications of doctors, dentists, general care nurses, midwives and pharmacists
remains to be adopted and its implementation needs to be ensured. Transposition of
legislation on veterinarians needs to be completed whereas on commercial agents it
remains to be fine-tuned. Training of veterinarians is currently substantially deficient.
The necessary implementing administrative structures are in place in the area of mutual
recognition of professional qualifications but need to be strengthened.
In the area of
citizens’ rights
legislative alignment has been completed. The main
administrative structures for implementation are in place.
As for
free movement of workers
a transitional arrangement has been agreed. For the
first two years following accession, current Member States will apply national measures,
or bilateral agreements, to regulate the access of workers from Estonia to their labour
markets. These arrangements may continue up to a maximum of seven years. Most of the
legislation aiming at transposition of the
acquis
has been adopted. However, care must
continue to be taken over legislative requirements on language proficiency, to ensure
justified public interest, non-discrimination and proportionality. Under the
acquis
mandatory requirements for language proficiency can only be applied in very exceptional
circumstances, on a case-by-case basis. Estonia is also encouraged to continue to
demonstrate flexibility regarding the expiry of old language certificates. Full alignment
with the legislation on supplementary pension rights of workers moving within the EU
remains to be achieved. The Public Service Act remains to be amended in order to give
access for EU citizens to employment in the public service.
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With regard to
co-ordination of social security systems
no transposition into national
legislation is needed to achieve alignment with the
acquis.
However, administrative
capacity should be developed, in particular through further training of staff.
Conclusion
Estonia is essentially meeting the commitments and requirements in the area of
citizens’
rights, free movement of workers
and
co-ordination of social security systems.
Legislative alignment needs to be completed in the area of free movement of workers.
Furthermore, the ongoing measures to ensure adequate administrative capacity in these
areas should continue.
Estonia is partially meeting the requirements for membership in the veterinary sector
within the area of
mutual recognition of professional qualifications.
In order to
complete preparations for membership in this area, Estonia must improve the training for
veterinarians.
Serious concerns exist relating to Estonia’s preparations for mutual recognition of
professional qualifications in the healthcare sector, where Estonia must seriously
enhance its efforts to transpose the relevant directives. The required administrative
bodies must be fully established and the capacity to implement this
acquis
reinforced.
Unless immediate action is taken, Estonia will not meet the requirements for membership
in this area.
Chapter 3: Freedom to provide services
Under this chapter, Member States must ensure that the right of establishment and the
freedom to provide services anywhere in the EU is not hampered by national legislation.
In some sectors, the
acquis
prescribes harmonised rules which must be respected if the
internal market is to function; this concerns mainly the financial sector (banking,
insurance, investment services and securities markets) but also some specific professions
(craftsmen, traders, farmers, commercial agents). Harmonised rules concerning personal
data protection and certain information-society services must also be respected.
In the field of the
right of establishment and the freedom to provide non-financial
services,
the current comprehensive screening for obstacles caused by legal and
administrative restrictions needs to be completed and those obstacles found must be
removed. In Estonian legislation regulating economic activity, including the Commercial
Code, a clear distinction should be made between economic operators providing services
in Estonia temporarily and those established permanently, in order to ensure the free
provision of cross-border services. The screening should also include the Language Law,
where the requirement that all advertising and signs addressed to the public are only in
Estonian should, for example, be amended.
In the field of financial services, Estonia is completing the implementation of its
commitments with regard to legislative alignment with the
acquis
in the
banking sector.
The directives on electronic money institutions and on the winding up of credit
institutions have still to be transposed. Estonia has committed itself to ensuring the full
application of the
acquis
in respect of the deposit guarantee scheme and investor
compensation scheme by the end of 2007, in accordance with the transitional
arrangements it has been granted.
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As regards the
insurance sector,
legislative alignment has been mostly completed, with
the exception of, in particular, the rules related to cross-border operations and the
directives relating to motor vehicles. The procedure for Estonia becoming a signatory of
the ‘green card’ Multilateral Guarantee Agreement, as foreseen in the 1
st
motor vehicle
directive, still needs to be finalised and efforts should be made to cope with the
responsibilities linked to this status.
In the field of
investment services and securities markets,
discrepancies in respect of
all securities and financial instrument directives still need to be corrected. The directive
on financial collateral remains to be transposed.
In terms of administrative capacity, at the beginning of 2002 the three supervisory
authorities for banking, insurance and securities exchange were merged into one
authority, the Estonian Financial Supervision Authority (EFSA). By doing this, many of
the structural and organisational recommendations previously made have been followed
up and the average quality of supervision across the financial sector has increased.
Estonia should continue to pursue its 2002 Action Plan in order to meet each of the
remaining recommendations.
In the area of the
protection of personal data and the free movement of such data,
a
new Personal Data Protection Act has been adopted, aiming at bringing legislation closer
to the
acquis.
However, important data protection provisions have not been transposed
and the resulting act cannot be considered as fully aligned with the data protection
directive. The State Data Inspectorate lacks the elements necessary to guarantee the full
independence of this authority, as required by the directive, e.g. as regards the
appointment of the head of the inspectorate by the Government, or its position as a
government agency. These shortcomings should be rectified. Human resources at the
inspectorate also need to be reinforced.
As regards
information-society services,
the more recent
acquis
on e-commerce still
needs to be transposed and the relevant administrative capacity ensured before accession.
The conditional access directive also remains to be transposed.
Conclusion
Estonia is essentially meeting the requirements for membership and is expected to be in a
position to implement the
acquis
in the area of
banking
and
insurance
by the time of
accession. Some legislative work in this area still needs to be completed.
Estonia is meeting the majority of the requirements for accession in the areas of
investment services and securities markets, protection of personal data
and
information-society services.
In order to complete preparations for membership,
legislative alignment must be completed. The full independence of the State Data
Inspectorate must be ensured. Enhanced efforts are also needed to remove all remaining
administrative and legal restrictions on the
right of establishment and the freedom to
provide non-financial services.
Chapter 4: Free movement of capital
Under this chapter, Member States must remove all restrictions in national law on the
movement of capital between themselves, but also with third countries (with some
exceptions) and adopt EU rules to guarantee the proper functioning of cross-border
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payments and transfers of all forms of capital. The
acquis
under this chapter also
includes harmonised rules on payments systems and the fight against money laundering,
requiring adequate enforcement capacity.
In the area of
capital movements and payments,
Estonia is to a large extent in line with
the
acquis.
Estonia must still remove the restrictions on foreign direct investment in
security services and the air transport sector. Amendments aimed at removing the
remaining restrictions to ownership of sea-going vessels were adopted by the Parliament
in January 2003 and will enter into force upon accession.
In accordance with the transitional arrangement it has been granted, Estonia will remove
restrictions on the acquisition of agricultural land and forests by EU nationals and by EU
companies by May 2011 at the latest.
In the field of
payment systems,
Estonia is completing its legislative alignment. An out-
of-court arbitration body to cover complaints related to payment and settlement services
between commercial banks and their customers remains to be established.
In the area of
money laundering,
Estonia still has to amend its anti-money-laundering
legislation in line with the most recent
acquis
and,
inter alia,extend
the range of persons
obliged to report suspicious transactions to cover lawyers, accountants, tax advisors,
auditors and notaries. More detailed regulation on supervision of gambling is needed.
Estonia must extend reporting obligations in case funds are intended for the financing of
terrorism. Moreover, further work will also be necessary to comply with the
recommendations of the Financial Action Task Force. In terms of implementing
structures, the Financial Intelligence Unit (FIU) needs to be further strengthened both in
terms of staff and equipment, especially to carry out analysis and maintain the security of
data and premises. Training activities are needed for the FIU, economic police,
prosecutors, customs officials, and bank staff (see
also chapter 24 – Justice and home
affairs).
Conclusion
Estonia is essentially meeting the requirements for membership and should be in a
position to implement the
acquis
in the area of
capital movements and payments
and
payment systems
from accession. A limited number of specific issues still need to be
addressed in these areas before accession.
The commitments and requirements in the fight against
money laundering
are partially
met. In order to complete preparations for membership, Estonia must transpose the recent
acquis
and further reinforce its administrative capacity to effectively implement the
acquis
on money laundering.
Chapter 5: Company law
Under this chapter, Member States must adopt and apply harmonised rules required for
the proper operation of companies in the internal market. They concern five legislative
fields: company law in the strict sense, accounting law, intellectual property rights,
industrial property rights, and the recognition and enforcement of judgements in civil and
commercial matters as well as of contractual obligations.
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In the field of
company law
as such, Estonian legislation is to a very large extent in line
with the
acquis.
Administrative bodies are in place and their capacity appears to be
adequate.
With regard to
accounting,
Estonia’s commitments have essentially been met and it
should be in a position to implement the
acquis
in this field from the date of accession.
Legislation is largely in line with the
acquis,
although a few shortcomings in the Act on
authorised public accountants need to be addressed. In the area of auditing Estonia has
reached a relatively high level of alignment with the
acquis,
although some discrepancies
remain to be addressed. In terms of administrative capacity, Estonia should provide for
government supervision of the self-regulatory Institute of Authorised Auditors.
In the field of
protection of intellectual and industrial property rights (IPR),
further
efforts are required to align the legislation on copyright and neighbouring rights. The
recent Directive on copyright in the information society remains to be transposed; in
particular, provisions on the right of reproduction, the right to make available, the
protection of technological measures, rights management information and the principle
of EC exhaustion of distribution right need to be adopted. Estonia still needs to ratify the
two WIPO “Internet” Treaties. Legislation in the area of industrial property rights is
largely aligned with the
acquis.
Estonia has in place legislation aimed at transposing the
acquis
in the area of biological patents.
Specific transitional rules will apply in relation to pharmaceutical product patents,
involving the non-application of Community exhaustion to certain exports from Estonia,
as regards the granting of supplementary protection certificates for medicinal and plant
protection products, as well as in relation to the extension of registered or pending
Community trademarks to the territory of Estonia.
As regards enforcement of IPR, administrative structures are in place but the fight
against piracy and counterfeiting appears to no longer have sufficient priority. While the
number of pirated goods seized by the Customs Board slightly increased in 2002, the
number of seizures by the police fell from 70,109 items in 2001, to 15,393 items in 2002.
The performance and administrative capacity of customs, police and the judiciary should,
in particular, be reinforced. Efforts have been made to increase co-operation between
relevant bodies, e.g. through the signature of a co-operation memorandum between the
Police Board, the Estonian Organisation of Copyright Protection, the Estonian Authors’
Society and the Business Software Alliance Estonian Committee. Nevertheless, co-
operation between the police and local government should also be further enhanced, in
particular in the enforcement of copyright legislation. In addition, the court system in the
field of IPR should be improved by training judges and public prosecutors. The National
Patent Administration infrastructure is functioning satisfactorily overall.
The
Regulation replacing the Brussels Convention
on mutual recognition and
enforcement of foreign judgements in civil and commercial matters will be directly
applicable upon accession, and accession to the
Rome Convention
will only be possible
upon accession. Estonia should designate the relevant Courts and/or other authorities to
ensure swift implementation of these provisions
(see also Chapter 24 - Justice and home
affairs).
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Conclusion
Estonia is essentially meeting the requirements for membership, and is expected to be in
a position by accession to implement the
acquis,
in the areas of
company law
and
accounting,
as well as the
Regulation replacing the Brussels Convention
and the
Rome Convention.
Certain discrepancies with the
acquis
must be removed in the area of
auditing.
Estonia is partially meeting the commitments and requirements arising from the
accession negotiations in the field of the
protection of intellectual and industrial
property rights.
In order to complete alignment, further legislative adjustments are
required in respect of copyright and related rights, and information society rules. Efforts
to enforce intellectual and industrial property rights should be enhanced, in particular,
through better co-ordination and training of enforcement bodies (mainly customs, police
and judiciary). The efficient functioning of a well-trained judiciary should also be given
particular attention.
Chapter 6: Competition policy
The competition
acquis
covers both anti-trust and state aid control policies. It includes
rules and procedures to fight anti-competitive behaviour by companies (restrictive
agreements between undertakings and abuse of dominant position), and to prevent
governments from granting state aid which distorts competition in the Internal Market.
Generally, the competition rules are directly applicable in the whole Union, and Member
States must fully co-operate with the Commission on the enforcement of these rules.
In the
anti-trust
sector, Estonia has adopted legislation containing the main principles of
Community anti-trust rules as regards restrictive agreements, abuse of dominant position
and merger control. However, Estonia still needs to ensure that its legislation is not in
contradiction with the more recent Community block exemptions. Furthermore, Estonia
needs to continue its efforts to ensure that the rules allow for effective enforcement in
view of the recent criminalisation of anti-trust offences. Preparations should also be
made for the application of the EU's new procedural regulation.
Estonia has the necessary implementing structure in place. However, in view of the
recent criminalisation of anti-trust offences, it remains to be ensured that the Competition
Board is given the necessary powers and resources to continue to effectively enforce the
competition rules. Further efforts are needed to raise awareness of anti-trust rules
amongst all market participants and to build up a credible and transparent competition
culture. Special training for judges should be further developed.
The enforcement record is generally satisfactory, although somewhat weakened in 2002.
In order to ensure strengthening, priority should be given to cases that most seriously
distort competition. Furthermore, much more deterrent sanctions should be imposed.
In the field of
state aid,
Estonia has adopted state aid rules covering the main principles
of the
acquis.
The necessary implementing structures are in place and the State Aid division of the
Ministry of Finance is functioning well. Further efforts are needed to raise awareness of
state aid rules amongst all market participants and aid grantors. Estonia must also pay
further attention to training the judiciary.
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The enforcement record is generally satisfactory. Estonia should continue to ensure that
all aid measures are monitored and controlled.
Conclusion
Estonia is essentially meeting the commitments and requirements arising from the
accession negotiations in the
competition
area and is expected to be in a position to
implement this
acquis
from accession. In completing preparations for membership,
Estonia must continue to develop a track record of proper application and enforcement of
both anti-trust and state aid legislation, and complete the legislative fine-tuning that will
enable such strengthening of the enforcement record. Particular attention is needed for
ensuring that the new criminal procedure applied in anti-trust cases will allow for
effective enforcement.
Chapter 7: Agriculture
The agriculture chapter covers a large number of binding rules, many of which are
directly applicable. The proper application of these rules and their effective enforcement
by an efficient public administration are essential for the functioning of the common
agricultural policy. This includes the setting up of management systems such as a Paying
Agency and the Integrated Administration and Control System, which are covered under
"horizontal issues” below, and also the capacity to implement rural development actions.
The acceding countries must be ready to be integrated into the common market
organisations for a range of agricultural products, including arable crops, fruits and
vegetables, and meat. Finally, this chapter covers detailed rules in the veterinary field,
which are essential for safeguarding animal health and food safety in the internal market,
as well as in the phytosanitary field, including issues such as seed quality, harmful
organisms and plant protection products.
Horizontal issues
The CAP Implementing Act remains to be adopted by the end of 2003. The Agricultural
Registers and Information Board (ARIB) will be the
Paying Agency
for all CAP
measures. It remains to be accredited by the Ministry of Finance. A substantial amount of
work remains to be done (such as conclusion of agreements with delegated bodies,
written procedures and development of IT systems) if Estonia is to have a functioning
paying agency by the date of accession.
With regard to the
Integrated Administration and Control System
(IACS), Estonia
has made good progress so far, but much remains to be done if Estonia is to have a fully
functioning system by accession. The responsibilities of the 15 regional offices have to
be clearly defined and their administrative structure fully established. Digitalisation of
orthophotos remains to be finalised.
ARIB will be responsible for the administration of
trade mechanisms,
together with the
Customs Board and Veterinary and Food Board, which will have the relevant control
responsibilities. Further efforts will, however, be needed in setting up the procedures
within ARIB and the veterinary service. Staffing will also need to be reinforced.
Preparations in the customs field need to be accelerated.
Legislative measures for
quality policy
and
organic farming
are in place.
Administrative structures to implement quality policy have been finalised. Supervision of
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organic farming is performed by the Plant Production Inspectorate, the Veterinary and
Food Board and the Health Protection Inspectorate.
Estonia has met the commitments and requirements arising from the accession
negotiations in the area of the
Farm Accountancy Data Network
(FADN) and is
expected to have implemented the FADN by accession.
Estonia must ensure that
state aid
measures in the field of agriculture are brought in line
with the
acquis
at the time of accession.
As concerns direct payments to farmers, Estonia has not yet decided whether or not to
apply the single area payment scheme (SAPS).
Common market organisations (CMOs)
ARIB will be responsible for intervention as well as inspection and authorisation of
payments for
arable crops.
Intervention centres and storage premises remain to be set up
and price reporting needs to be put in place.
Implementing legislation as regards marketing standards for
fruit and vegetables
as well
as the establishment of producers organisations has been adopted. Further controls at the
import stage remain to be implemented and the mechanisms for the reporting of entry
prices remain to be set up. However, administrative structures are essentially in place.
In the area of
wine and alcohol,
the CMO for wine remains to be fully set up. Further
efforts are needed to complete alignment with the
acquis
on sparkling wine and on
registration of spirits. Estonia, in particular, needs to repeal national registering of spirits
by the date of accession.
The Milk Bureau in ARIB is responsible for managing the
milk
quota system. A
temporary simplified milk quota system was introduced in 2003, without application of
the super-levy. However, a significant number of preparations remain to be completed,
for example, the registration and quota allocation must be extended to cover all milk
producers and the IT system needs to be adapted so that it can handle the fat adjustment
and levy calculation. Other CMO mechanisms such as intervention also remain to be set
up.
Some legislative measures have been adopted regarding carcass classification and price
reporting for
beefmeat, sheepmeat and pigmeat,
but they need to be brought fully in
line with the
acquis.
The labelling system for beefmeat has been adopted but remains to
be implemented.
For
eggs and poultry,
quality standards for eggs and poultry and price reporting are in
place, and the reporting of production statistics has been implemented.
Rural development
The CAP Implementing Act, which will implement measures under the Guarantee
section of the European Agricultural Guidance and Guarantee Fund (EAGGF), remains
to be adopted, along with the necessary implementing legislation. ARIB will be the
paying agency for rural development and will be responsible for implementation of the
measures. This agency already has substantial experience with the implementation of
SAPARD. Estonia has submitted its draft Rural Development Plan for EAGGF
Guarantee expenditure to the Commission.
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Veterinary and phytosanitary issues
Transposition of legislation on transmissible spongiform encephalopathies (TSEs) and
animal by-products
has largely been completed. However, implementation needs to be
accelerated. TSE surveillance is not yet in compliance with the
acquis;
in particular,
testing is still insufficient. Construction of an animal waste rendering plant is not yet
complete, a final decision on the financing of the collection system for cadavers remains
to be taken and the collection system has still to be put in place. A total feed ban is in
place.
The
veterinary control system in the internal market
is not fully established. Estonia
has not yet joined ANIMO, the computerised network linking veterinary authorities. The
acquis
in the field of identification and registration of animals has mainly been
transposed. All bovine animals are ear-tagged and registered in the central bovine
database. This database is operational but needs upgrading. Holding registration needs to
be completed. The
acquis
on financing of veterinary inspections and controls has largely
been transposed but fee levels need to be adjusted. Transposition regarding veterinary
checks of imports from third countries and rules for imports remains to be completed.
Further work is still needed to bring border inspection posts into compliance with EU
requirements.
Regarding
animal disease control
measures, national contingency plans on foot and
mouth disease, classical swine fever, Newcastle disease and avian influenza have been
provided. Estonia has joined the Animal Disease Notification System (ADNS) on a
voluntary basis. Most of the legislation on
trade in live animals and animal products
still needs to be transposed and implemented.
Legislation on
public health
protection is largely in compliance with the
acquis,
but
remains to be adjusted for farmed game meat, wild game meat, and certain aspects of
milk and meat products. The upgrading of establishments has in most cases taken place
in accordance with upgrading plans. However, certain delays have taken place in the
meat and milk sectors.
The
acquis
on
common measures
(including zoonoses) has partly been transposed.
Shortcomings in the Estonian residue-monitoring programme, and in the effective follow
up of positive results, need to be addressed.
The
acquis
in the field of
animal welfare
has largely been transposed.
In the field of
zootechnics,
steps have been taken to align and implement Estonian
legislation with EU requirements.
The
acquis
for
animal nutrition
has partly been transposed but further legislative work
remains to be carried out in the areas of official inspections. Estonia must ensure the
effective implementation of registration and approval of establishments.
In the field of
phytosanitary
legislation (harmful organisms, quality of seeds and
propagating material, and plant protection products), transposition has been largely
achieved but amendments are still required. Legislation in the areas of harmful organisms
and quality of seeds and propagating material largely remains to be implemented. In
particular, the process of selecting and upgrading border inspection posts that will
operate after accession has to be completed. The plant passport system has been
introduced at a national level for some commodities. The main plant protection products
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directives have been transposed but, for the most part, not yet implemented. However,
the monitoring programme for residues is in place.
Estonia has no international veterinary and phytosanitary agreements.
In order to ensure a comprehensive approach to enhance food safety throughout the food
chain, the Food Safety Council has been established, with the participation of the Food
and Veterinary Board, the Health Protection Inspectorate and the Plant Production
Inspectorate. Aspects of food safety are also covered under
Chapter 1 – Free movement
of goods.
Conclusion
Estonia is essentially meeting the commitments and requirements arising from the
accession negotiations, among the horizontal issues as regards
quality policy
and
organic farming,
the
Farm Accountancy Data Network
(FADN) and
state aid;
among
the common market organisations (CMOs) as regards
arable crops, fruit and
vegetables, wine, beefmeat, sheepmeat and pigmeat,
and
eggs and poultry;
and as
regards
rural development.
In the veterinary field, Estonia is essentially meeting the
requirements relating to
animal disease control measures, animal welfare
and
zootechnics.
Subject to good progress being maintained in these areas, Estonia should be
in a position to implement this
acquis
from accession.
Estonia is partially meeting the commitments and requirements for membership as
regards the
Paying Agency,
the
Integrated Administration and Control System
(IACS),
trade mechanisms,
the CMO for
milk,
and in the veterinary field as regards
TSE and animal by-products,
the
veterinary control system in the internal market
(as regards animal identification and import controls),
trade in live animals and animal
products, common measures
(as regards residues),
animal nutrition
and
phytosanitary
issues. Attention must also be paid to
public health
protection as regards
the upgrading of agri-food establishments in the milk and meat sectors. Unless efforts are
accelerated in these areas, there is a risk that functioning systems will not be in place at
accession.
Chapter 8: Fisheries
The
acquis
on fisheries consists of regulations, which do not require transposition into
national legislation. However, it requires the introduction of measures to prepare the
administration and the operators for participation in the Common Fisheries Policy (in the
areas of market policy, resource and fleet management, inspection and control, structural
actions and state aid). In some cases, existing fisheries agreements or conventions with
third countries or international organisations need to be adapted.
In the field of
resource and fleet management, and inspection and control,
the
Estonian legislation is partially in line with the
acquis.
The draft Fishing Act
Amendment Act has been approved by the government but needs to be adopted in order,
for example, to extend the requirement for vessels to carry satellite-tracking devices
(Vessel Monitoring System (VMS)) to all vessels of 18 metres or more (including those
operating in Estonian waters), and provide for completion of the Fishing Vessel Register
(FVR). Implementing legislation in this area also remains to be fully harmonised. Estonia
has partly ensured the creation, the reinforcement, and the operational capacity of
institutions in the field of fleet management, resources, inspection and control. Co-
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ordination between the Ministry of Environment, responsible for resource management
and control, and the Ministry of Agriculture, responsible for market and structural policy,
has improved, but still needs further efforts. There is a need for more centralised co-
ordination, as well as institutionalised consultation with different stakeholders. The
Fishing Vessels Monitoring Centre (FMC) is operational. According to the latest figures,
40 vessels able to operate outside Estonian waters are equipped with satellite tracking
devices (VMS). The system also receives data from foreign vessels entering Estonian
waters. However, VMS data are not used so far in an organised way for targeting
inspections. The Fisheries Information System (FIS) has been established but needs to be
further developed. It must be able to cope with much larger amounts of data and there
should be more cross-checking options. A connection must be made with the Fishing
Vessel Register, and an on-line link to the Fisheries Inspectorate, and links to the
Ministry of Agriculture and the Agricultural Registers and Information Board (ARIB)
need to be developed. The parameters used in the inspection reporting system need to be
adjusted to meet the requirements for providing information to the Commission. Further
efforts should be made to increase the level of sanctions for fisheries violations.
In the area of
structural actions,
the chapter on fisheries in the Estonian Single
Programming Document (Development Plan) has been submitted to the European
Commission. The planned Structural Fund Regulation remains to be adopted. ARIB will
be responsible for the management of projects under the Financial Instrument for
Fisheries Guidance (FIFG). Co-ordination between the Ministry of Environment,
Ministry of Agriculture and ARIB needs to be improved in order to ensure smooth
implementation of structural policy. The Fishing Vessel Register has been established at
the Ministry of Environment and is operational for 158 vessels over 12 metres, including
11 large vessels fishing on the high seas. The register remains to be completed; in
particular, fishing vessels under 24 metres remain to be re-measured. Currently, the rate
of re-measurement is 65% for the total fishing fleet.
Regarding
market policy,
both the framework draft Fisheries Market Regulation Act,
which was recently approved by the government, and implementing legislation remain to
be adopted. This includes legislation concerning registration of first buyers, marketing
standards, fishery freshness, size criteria and aquaculture. If Estonia intends to
implement market intervention from accession, the legal basis for producers’
organisations (POs) must be established and POs must be fully operational. The
administrative structures and procedures in the area of POs have not yet been established.
Fish quality standards entered into force in July 2003.
As regards
state aid
to the fisheries sector, Estonia needs to ensure that all state aid
measures are in line with the
acquis
by accession.
As regards
international fisheries agreements,
Estonia needs to withdraw from the
International Baltic Sea Fisheries Commission (IBSFC), the North Atlantic Fisheries
Organisation (NAFO) and the North-east Atlantic Fisheries Commission (NEAFC)
before accession. A solution has been found between Lithuania, Estonia, Latvia and
Russia on the division of the NAFO block quotas.
Conclusion
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Estonia is essentially meeting the commitments and requirements arising from the
accession negotiations and is expected to be in a position as from accession to implement
the
acquis
in the areas of
state aid
and
international agreements.
Estonia is partially meeting the commitments and requirements for membership in the
areas of
resource and fleet management, and inspection and control, structural
actions
and
market policy.
In order to complete preparations for accession, necessary
legislative alignment must be completed, the Fisheries Information System (FIS) must
become fully operational and the Fishing Vessel Register must be finalised. Moreover, in
all areas, co-operation between the different bodies for fisheries administration should be
reinforced. In addition, as regards market policy, both framework and implementing
legislation remains to be adopted, and enhanced efforts are needed to establish the
necessary administrative structures and procedures for implementing the
acquis.
Chapter 9: Transport policy
EC transport legislation aims at improving the functioning of the Internal Market by
promoting efficient and environment- and user-friendly transport services. The transport
acquis
covers the sectors of road transport, railways, aviation, maritime transport and
inland waterways. Member States are required to adopt and implement legislation
concerning technical and safety standards as well as social standards. In order to further
develop the European Single Transport Market, EC legislation also includes rules on
market liberalisation. An important aspect of EC maritime policy is the establishment of
Union-wide maritime safety standards.
The extension of the
trans-European transport networks
has been defined. While the
necessary implementing structures in this area are in place, the administrative capacity
requires further strengthening, both in qualitative and quantitative terms, in particular in
the rail and the road sector.
In the land transport sector, Estonia is completing the implementation of its commitments
with regard to legislative alignment with the
road transport
acquis.
Framework
legislation is in place and in line. Alignment with the fiscal and social
acquis
has been
completed, except for checks of driving time and rest periods. The volume of the checks
has to be increased for volumes to reach
acquis
requirements. In the technical field, legal
alignment is largely complete, except for some implementing legislation. Further
alignment is needed with regard to technical road-side inspection, transportable pressure
equipment as well as speed-limitation devices. Implementing measures in the road
transport area are proceeding as foreseen. The necessary administrative structures in this
area are in place. Estonia has agreed to a transitional arrangement put forward by the EU
concerning gradual reciprocal access to the cabotage market in the road haulage sector
(for a maximum duration of five years).
Transposition of the revised
rail transport
acquis
of February 2001 is taking place, and
the process remains to be completed with regard to track access charging, capacity
allocation and the interoperability directives. In light of the imminent transformation of
the Railway Administration, procedures and task allocation should be reviewed and
training of staff should be pursued. The independence of the allocation and charging
functions remains to be ensured, in particular with regard to the privatised integrated
railways.
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On
inland waterways
transport, legislative alignment has been completed.
Administrative structures in this area are in place and satisfactory.
In the area of
air transport,
all relevant framework legislation has been transposed and
is essentially in line with the
acquis,
but some modifications are needed, notably with
regard to ground handling, slot allocations and accident investigation. Implementing
legislation is still being adopted in order to complete alignment with the
acquis.
The
administrative capacity is satisfactory. Full membership of the Joint Aviation Authorities
remains to be achieved, and particular efforts should be made in order to become a full
member before accession as required by the
acquis
and irrespective of the setting up of
the European Aviation Safety Agency (EASA).
In the field of
maritime transport,
framework legislation is in place and in line with the
acquis.
However, the adoption of implementing legislation needs to be accelerated, in
particular in relation to the
acquis
adopted under the “Erika” packages, and with regard
to the latest amendments to the
acquis
on passenger ships, fishing vessels, marine
equipment and port reception facilities. The relevant administrative structures in this
area are in place. The strengthening of the management system of the Estonia Maritime
Administration needs to continue. According to statistics for 2002 under the Paris
Memorandum of Understanding, the percentage of Estonian flag vessels detained
following Port State control was 6.7%. This compares with an average for EU-flagged
vessels of 3.5%. However, there are strong indications that the situation is deteriorating,
in that the number of Estonian flag vessels being detained is rising sharply. Estonia needs
to urgently address this issue with a view to reversing this trend of deteriorating
detention rates.
Conclusion
Estonia is essentially meeting the commitments and requirements arising from the
accession negotiations in the
trans-European transport networks, road transport,
inland waterway
and
rail transport,
and is expected to be in a position to implement
the
acquis
from the time of accession, provided that the current pace of progress is
maintained. In completing preparations for membership, Estonia must complete the
transposition of the railway
acquis
and strengthen administrative capacity. In the area of
road transport, Estonia needs to adopt implementing legislation and further reinforce its
administrative capacity.
Estonia is meeting the majority of commitments and requirements in the area of
air
transport,
where legislative alignment remains to be completed. Estonia needs to
accelerate its efforts to become a full member of the Joint Aviation Authorities before
accession. In addition, Estonia is partially meeting the commitments and requirements in
the area of
maritime transport,
where legislative alignment remains to be completed
and remedial action must be taken without delay in order to improve the detention rates
of Estonian flag vessels.
Chapter 10: Taxation
The
acquis
on taxation largely covers indirect taxation, as concerns VAT (value-added
tax) and excise duties. It lays down definitions and principles of VAT. Excise duties on
mineral oils, tobacco products and alcoholic beverages are regulated at EU level as
concerns the structure of the duty, the level of minimum rates and the holding and
movement of excisable goods. As concerns direct taxation, the
acquis
covers some
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aspects of corporate taxes and aims mainly at removing obstacles to cross-border
activities between enterprises. Finally, the Community legislation in the area of
administrative co-operation and mutual assistance provides tools to prevent intra-
Community tax evasion and tax avoidance on both direct and indirect taxation.
As concerns indirect taxation, Estonia should complete alignment in the area of
VAT
by
eliminating zero-rating on certain periodicals and educational textbooks, aligning its
definition of taxable person, introducing refunds to foreign taxable persons not based in
Estonia. Estonia should also introduce the special schemes for travel agents and
investment gold, align the scope of some VAT exemptions, except in the areas where it
has obtained transitional periods (see below) and introduce the intra-community regime.
Furthermore, Estonia should align discrepancies regarding the taxable amount, the place
of supply and the scheme for traveller’s allowances.
Estonia has obtained a transitional period concerning the continued application of the
reduced VAT rate on heating sold to natural persons, housing associations, apartment
associations, churches, congregations and institutions or bodies financed from the State,
rural municipality or city budget, as well as on peat, fuel briquettes, coal and firewood to
natural persons (until 30 June 2007) and a derogation to apply a VAT exemption and
registration threshold of € 16 000 for small and medium sized enterprises and a VAT
exemption on international passenger transport. The necessary administrative structures
in this area are in place, but actions to modernise and strengthen the tax administration
should be continued. Priority should be given to improving tax collection and control and
audit procedures.
As concerns
excise duties,
Estonia needs to align duty rates on certain mineral oil
products, some exemptions, the reimbursement system and to extend the duty suspension
arrangement to intra-community movements. The gradual increase of excise duties on
cigarettes is proceeding according to schedule, in order to reach the minimum rate level
on 31 December 2009, as agreed in the accession negotiations. Estonia was also granted
a transitional arrangement for a delayed implementation of the overall excise duty on
smoking tobacco (until 31 December 2009). Estonia has the required administrative
structures to apply and effectively implement the
acquis
in the area of excise duties.
However, attention should be paid to the persistent problem of fraud, concerning in
particular mineral oil.
In the area of
direct taxation,
Estonia needs to accelerate efforts to align its legislation
notably by removing remaining discriminations concerning the free movement of capital
provided by the EC Treaty on payments of dividend income by Estonian companies to
non-resident individuals. Furthermore, Estonia needs to transpose the Directives on
Interests and Royalties and on Taxation of Savings Income. A transitional measure
agreed permits Estonia, for as long as it charges income tax on distributed profits without
taxing undistributed profits, and at the latest until 31 December 2008, to continue to
apply that tax to profits distributed by Estonian subsidiaries to their parent companies
established in other Member States. The capacity of the tax administration is sufficient to
ensure proper implementation of the
acquis.
On
administrative co-operation and mutual assistance,
Estonia is taking the necessary
steps to transpose the
acquis
and implement it by accession, both from the legislative
point of view and as concerns organisational structures including information technology
systems. A Central Liaison Office (CLO) was set up, whereas the Excise Liaison Office
(ELO) remains to be established. Preparations for the VAT Information Exchange
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System (VIES) and for the System for Exchange of Excise Data (SEED) databases are
ongoing and proceeding according to plan.
Conclusion
Estonia is essentially meeting the commitments and requirements arising from the
accession negotiations in the area of
VAT, excise duties
and
administrative co-
operation and mutual assistance
and is expected to be by accession in a position to
implement the relevant
acquis.
Estonia needs to adopt legislation in some areas, so as to
complete alignment, as well as to strengthen its tax administration. Estonia should
continue its efforts to set up the information technology systems allowing for the
exchange of computerised data with the Community and its Member States.
Estonia is meeting the majority of the commitments and requirements arising from the
accession negotiations in the area of
direct taxation.
In order to complete preparations
for membership, Estonia must eliminate the remaining discriminations with respect to the
free movement of capital provided by the EC Treaty on payments of dividend income by
Estonian companies to non-resident individuals.
Chapter 11: Economic and monetary union
EC legislation on Economic and Monetary Union (EMU) contains specific rules ensuring
the independence of central banks in Member States, prohibiting indirect financing of the
state by the central bank, and disallowing privileged access of the public sector to
financial institutions. These rules must be transposed into the national legislation, despite
the fact that Estonia will not adopt the euro as a currency from accession. EMU policy
also includes the co-ordination of exchange rate and economic policies, adherence to the
stability and growth pact and the statutes of the European System of Central Banks.
In the area of
prohibition of direct financing of the public sector,
Estonia has met the
commitments and requirements arising from the accession negotiations, and is in a
position to implement the relevant
acquis
as from the date of accession.
In the area of
prohibition of privileged access of the public sector to financial
institutions,
Estonia has met the commitments and requirements arising from the
accession negotiations, and is in a position to implement the relevant
acquis
as from the
date of accession.
In the field of
independence of the national central bank,
legislation is in place and in
line with the
acquis.
One final specific amendment to the Central Bank Law should be
adopted concerning possible conflicts between managing bodies of the bank and
potential interference of the Parliament. The necessary administrative structures are in
place and function adequately.
Conclusion
Estonia has met the commitments and requirements arising from the accession
negotiations in the fields of
prohibition of direct financing of the public sector
and
prohibition of privileged access of the public sector to financial institutions.
Estonia
is essentially meeting the requirements arising from the negotiations in the area of
independence of the national central bank
and is expected to be able to implement the
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acquis
as of accession. Estonia should adopt one final amendment to its Central Bank
Law.
Chapter 12: Statistics
The
acquis
in the field of statistics requires adoption of basic principles such as
impartiality, reliability, transparency, confidentiality of individual data and dissemination
of official statistics. It also covers methodology, classifications and procedures for data
collection in various areas such as statistical infrastructure, macro-economic and price
statistics, business statistics, transport statistics, external trade statistics, demographic
and social statistics, agricultural statistics and regional statistics. The focal point of the
statistical system of a country is the National Statistical Institute, which acts as the
reference point for the methodology, production and dissemination of statistical
information.
Estonia is essentially meeting the commitments and requirements arising from the
accession negotiations in the area of
statistics
and is expected to be in a position to
implement the
acquis
as from accession. Estonia needs to improve the quality and the
timeliness of data in certain domains such as government finance statistics and economic
accounts for forestry data.
Chapter 13: Social policy and employment
The
acquis
in the social field includes minimum standards in fields such as labour law,
equal treatment of women and men in employment and social security, and health and
safety at work. Specific binding rules have also been developed in public health (on
tobacco control and surveillance and control of communicable diseases) and recently also
with respect to non-discrimination on grounds of racial or ethnic origin, religion or
belief, disability, age or sexual orientation. The European Social Fund (ESF) is the main
financial tool through which the EU supports the implementation of its Employment
Strategy and contributes to social inclusion efforts (implementation rules are covered
under Chapter 21, which deals with all structural instruments). The acceding countries
are expected to be able to participate in social dialogue at European level, and in the EU
policy processes in the areas of employment, social inclusion and social protection.
Estonia must pay attention to completing alignment in the field of
labour law.
Only a
small part of the legislation aiming at the alignment with the
acquis
has been adopted.
The Draft Employment Contract Act and the Social Dialogue Act, which aim at
transposing directives on
inter alia
European Works Council, collective redundancies,
fixed-term work and part-time workers, remain to be adopted. There are substantial
delays compared to the original timetable for transposition, which need to be addressed
urgently. The independent guarantee fund for employees is in place and functioning well.
However, the remaining implementing structures need to be put in place.
Estonia has not transposed legislation in the field of
equal treatment of women and
men.
Alignment with the
acquis
is scheduled to be achieved with the adoption of the
Gender Equality and Equal Treatment Act and the Employment Contract Act. The
adoption of the Gender Equality and Equal Treatment Act is foreseen to also provide for
an institutional framework for ensuring its effective implementation. There are
substantial delays compared to the original timetable for transposition, which need to be
addressed urgently. Implementing structures remain to be put in place.
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In the area of
health and safety at work,
most of the legislation has been transposed and
is expected to be in force as from accession. Further legal alignment is still required, in
the areas of, amongst others, work equipment, drilling, surface and underground mineral
extracting industries. Further legal adjustments are also needed in order to achieve full
alignment with the framework directive. The National Labour Inspectorate is in place,
but further strengthening, in terms of staffing, salaries, training, and technical facilities,
is needed. In particular, attention should be paid to the enforcement of the legislation in
small and medium-sized enterprises.
As regards
social dialogue,
the tripartite social dialogue body is in place. However,
effective tripartite social dialogue, as well as autonomous sectoral social dialogue, could
be improved. The number of collective agreements signed at sectoral level is still low in
Estonia and should be increased.
In the field of
public health,
the legislative transposition of the new tobacco
acquis
remains to be completed. Transposition of the legislation with regard to surveillance and
control of communicable diseases requires further revision. In addition, new laboratory
equipment and training in modern epidemiology, as well as additional computerisation,
are needed. Efforts should continue in order to improve the health status of the
population, including communicable diseases, such as HIV/AIDS, and to increase health
expenditure. A National Institute for Health Development, administered by the Ministry
of Social Affairs, was established in May 2003.
Concerning
employment policy,
efforts are still needed to effectively implement the
priorities identified in the Joint Assessment of the Employment Priorities (JAP). In
particular, it is important to increase incentives for job creation and for people to take up
work. Estonia needs to continue the modernisation of education and training policies,
including establishment of the lifelong learning system. Concerns exist over the capacity
to develop a more active and preventive strategy, and efforts are needed to improve
policy co-ordination, as well as financial resources.
As regards the future establishment of the
European Social Fund (ESF),
the
administrative framework is being put in place. However, development of the
administrative structures for the management of the ESF should be accelerated. The
capacity of the Ministry of Labour and Social Affairs (one of the intermediate bodies for
human resource development) should be strengthened to effectively monitor, evaluate
and financially manage the fund. The capacity of the other intermediate bodies should be
developed and their tasks clarified. The on-going preparatory work on a project pipeline
needs to be strengthened. Preparations for participation in the transnational operations of
the EQUAL initiative also need to be intensified.
The Commission and Estonia are finalising the Joint Memorandum on Social Inclusion
(JIM), which identifies key challenges and possible policy orientations for promoting
social inclusion.
On this basis, an integrated strategy and a National Action Plan on
social inclusion will have to be developed. Analytical work and social statistics systems
on poverty and social exclusion should continue to be developed in line with the EU
commonly agreed indicators on social inclusion.
In the field of
social protection,
sustained efforts are required to implement the reforms
that have been introduced, including the health care reform and pension reform, which
will further help improve the level and efficiency of social protection.
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Concerning
anti-discrimination,
legislation remains to be prepared to ensure full
alignment with the
acquis
and the Equality Body required by the
acquis
needs to be
established. Estonia is also encouraged to further promote integration of the Russian
minority by, in particular, continuing to increase the speed of naturalisation procedures
and by taking other proactive measures to increase the rate of naturalisation. It is also
encouraged to ensure the effective and flexible implementation of the planned transition
by 2007 to bilingual education in non-Estonian speaking schools, and to ensure that at all
levels the implementation of the language law respects the principle of justified public
interest and proportionality, as well as Estonia’s international obligations.
Conclusion
Estonia is essentially meeting the commitments and requirements arising from the
accession negotiations in the areas of
health and safety at work, social dialogue,
employment policy, social inclusion and social protection,
and is expected to be in a
position to implement this
acquis
from accession. As regards health and safety at work,
further alignment will be needed in order to fully comply with the
acquis,
as well as a
strengthening of the National Labour Inspectorate in terms of financial, human and
technical resources. In the field of employment policy, the effective implementation of
the priorities identified in the Joint Assessment Paper is necessary to prepare for full
participation in the European Employment Strategy.
Estonia is partially meeting the requirements for membership in the areas of
public
health, European Social Fund
and
anti-discrimination.
In order to complete
preparations for membership, Estonia needs to complete legal alignment and
implementation of the new tobacco
acquis
and revise its communicable disease
legislation. Measures are also needed to reach the necessary capacity to meet Community
requirements in the area of communicable disease surveillance and control. With regard
to European Social Fund, including EQUAL, while considerable progress has been
achieved during the last few months, further efforts are urgently needed in order to
strengthen the administrative capacity for management, implementation, monitoring,
audit and control at both national and regional level. In addition, Estonia needs to fully
transpose and implement the anti-discrimination
acquis.
There are serious concerns in the fields of
labour law and equal treatment of women
and men.
In these areas there have been significant delays in the adoption of legislation,
which must urgently be addressed. The necessary implementing structures must also be
put in place.
Chapter 14: Energy
EU energy policy objectives include the improvement of competitiveness, security of
energy supplies and the protection of the environment. The energy
acquis
consists of
rules and policies, notably regarding competition and state aids (including in the coal
sector), the internal energy market (for example, opening up of the electricity and gas
markets, promotion of renewable energy sources, crisis management and oil stock
security obligations), nuclear energy and energy efficiency. This chapter also covers
important aspects of the safety of nuclear installations.
With respect to
security of supply,
and in particular oil stocks, legislation in Estonia is
in line with the
acquis.
Both framework and implementing legislation are in place.
Administrative capacities required - the Estonian oil-stocks authority body and a division
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within the Ministry of Economic Affairs - are in place. Building up of oil stocks is
essentially taking place in accordance with the transitional arrangement Estonia has been
granted, namely to reach the 90 days of oil stocks required by the
acquis
by the end of
2009.
In the field of
competitiveness and the internal energy market
(electricity and gas-
sectors), transposition of the
acquis
is taking place according to schedule. Framework
legislation, on electricity and gas, is in place and partially in line with the
acquis.
Implementing legislation is partially in place and in line with the
acquis
but needs to be
completed. Estonia was granted a transitional arrangement to implement the market
opening provisions of the electricity directive until end 2008. It needs to ensure that
market opening takes place according to commitments and that access to the grid -in
particular the application of import license rules - takes place on a non-discriminatory
basis without affecting cross-border trade. Market opening, taking place in line with the
commitments made in the negotiations, is presently 10% for electricity and 90% for
gas. The energy regulator, the Energy Market Inspectorate, functions satisfactorily within
the current market conditions. However, it needs to be strengthened, including in terms
of its independence, given the potential conflict of interest stemming from the State’s
ownership of Eesti Energy and the Inspectorate’s position under the jurisdiction of the
Ministry of Economic Affairs. Estonia should transpose the recently adopted electricity
and gas directives in line with the timetable laid down by the
acquis,
while taking into
account the transitional arrangement negotiated with Estonia on electricity.
Restructuring of the oil shale sector should be continued in line with the Restructuring
Plan for the Estonian Oil-shale Sector 2001-2006 as a necessity for further electricity
market opening. Eesti Energy is investing nearly € 191 million in the reconstruction of
Narva oil shale power plants in the current year. In parallel, certain mines have been
closed down and their workers redeployed or retrained.
In the area of
energy efficiency and renewable energy,
legislative alignment has been
largely completed. Framework legislation is in place and implementing legislation is
largely in place and in line with the
acquis.
Estonia should transpose Directives on
refrigerators and freezers on energy efficiency, and requirements for ballasts for
fluorescent lightning. The newest
acquis
should be transposed according to the
timetables laid down in the directives. The Ministry of Economic Affairs and the
Technical Inspectorate, a body functioning under the Ministry as the main institution, are
in place but need to be strengthened. The Energy Efficiency Target Programme and
implementation plan were adopted in 2000/2001.
In the field of
nuclear energy and nuclear safety,
Estonia meets the commitments and
requirements arising from the accession negotiations and is in a position to implement
the Euratom
acquis
as from the date of accession. During the accession negotiations
Estonia committed itself to providing further information on measures taken to
implement the recommendations of the June 2001 Council Report on Nuclear Safety in
the Context of Enlargement. Estonia provided such information in January 2002. In July
and September 2003, Estonia submitted additional information covering recent progress
made in various fields of nuclear safety,
inter alia
legislative aspects and implementing
structures, as well as radioactive waste management issues concerning the three sites of
Paldiski, Tammiku and Sillamäe. Estonia should continue to pay attention to the further
strengthening of the capacity of the Radiation Protection Centre.
Conclusion
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Estonia is essentially meeting the commitments and requirements arising from the
accession negotiations in the
energy
sector and is expected to be in a position to
implement the
acquis
by accession. Estonia needs to continue to build up oil stocks
progressively, open up the electricity and gas markets in line with the schedules agreed
during the negotiations and complete restructuring of the oil shale sector. It also needs to
continue to further strengthen administrative capacity in the energy sector.
Chapter 15: Industrial policy
EC industrial policy seeks to enhance industrial competitiveness and rates of
employment, whilst operating in markets open to international competition. Its aim is to
speed up adjustment to structural change, encouraging an environment favourable to
initiative and to the development of undertakings throughout the Community. EC
industrial policy mainly consists of policy principles and horizontal and sectoral
industrial policy communications.
Estonia’s
industrial strategy
essentially complies with the concepts and principles of
EC industrial policy, i.e. it is market-based, stable and predictable. Estonia should
complete the process of drafting its comprehensive Economic Development
Policy/Industrial Policy guidelines, based on the existing policy documents on
Enterprising Estonia, knowledge-based Estonia, export policy and tourism policy. The
necessary administrative structures in this area are in place. The central body for the
formulation and co-ordination of industrial policy, the Ministry of Economic Affairs and
Communications, needs to ensure that line ministries and other relevant institutions
responsible for managing specific industrial branches participate in the on-going policy-
making process.
The
privatisation and restructuring
process in Estonia is almost complete in the
industrial sector, with the exception of the energy industry, which is not on the
privatisation agenda at present. The restructuring of the oil-shale industry has continued
in line with the restructuring plan approved by the Government in March 2001. Priority
should be given to ensuring that restructuring policy is implemented in a manner which
conforms to the competition and state aid
acquis,
in order to create efficient and
competitive firms. The necessary administrative structures in this area are in place.
Conclusion
Estonia is essentially meeting the commitments and requirements arising from the
accession negotiations in the area of
industrial policy
and is expected to be in a position
to implement the relevant
acquis
as of accession.
Chapter 16: Small and Medium-sized Enterprises
SME policy aims to improve the formulation and co-ordination of enterprise policy
across the internal market with a view to supporting the development of SMEs. In doing
so, it seeks to improve the overall business environment in which SMEs operate. SME
policy consists largely of consultation fora and Community programmes, as well as of
communications, recommendations and exchanges of best practices.
Estonia is essentially meeting the commitments and requirements arising from the
accession negotiations in the chapter
small and medium-sized enterprises.
Alignment
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with the new Commission recommendation on the SME definition should be carried out.
The implementation of the European Charter for Small Enterprises should be maintained.
Chapter 17: Science and research
Due to its specificity, the
acquis
in the field of science and research does not require any
transposition in the national legal order. However, the necessary implementing capacity
needs to be created to allow for effective participation in activities under the Framework
Programmes in the field of research.
Estonia has met the commitments and requirements arising from the accession
negotiations in the area of
science and research
and will be in a position to implement
the
acquis
as from accession.
Chapter 18: Education and training
Education, training and youth is primarily the competence of the Member States. The
Community's
acquis
consists of a directive on education of the children of migrant
workers, and of action programmes and recommendations. The necessary implementing
capacity needs to be in place to allow for effective participation in the Community
programmes related to this chapter (Leonardo da Vinci, Socrates and Youth).
Estonia has met the commitments and requirements for membership in the area of
Community programmes,
and will be in a position to implement this
acquis
from
accession. The implementing capacity for Community programmes will need to be
enhanced to benefit from additional allocations for decentralised actions following
accession.
In the area of
education of children of migrant workers,
Estonia’s legislation is
broadly in line with the
acquis
and efforts made to ensure its implementation need to be
continued.
Conclusion
Estonia is essentially meeting the commitments and requirements arising from the
accession negotiations in the area of
education and training
and is expected to be in a
position to implement this
acquis
from accession. Efforts to implement the
acquis
on
education of children of migrant workers should continue.
Chapter 19: Telecommunications and information technologies
The
acquis
in the field of telecommunications consists mainly of the 1998 regulatory
framework and a 2000 regulation, and is aimed at the elimination of obstacles to the
effective operation of the single market in telecommunications services and networks,
and the achievement of universally available modern services. However, A regulatory
framework on electronic communications was adopted in 2002 and must be
implemented. As regards postal services, the objective is to implement the single market
by opening up the sector to competition in a gradual and controlled way, within a
regulatory framework which assures a universal service (1997 and 2002
acquis).
In the field of
telecommunications,
Estonia’s primary legislation is in line with the
acquis
adopted in the period 1998 to 2000, but needs to be amended to transpose fully
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the
acquis
on carrier pre-selection, local loop unbundling and affordable universal
service. The 2002
acquis
remains to be transposed. Implementation of Estonia’s
regulatory framework is largely in line with the
acquis,
except concerning carrier pre-
selection and for all the elements of universal service as required by the
acquis.
Local
loop unbundling has started despite the lack of a legal requirement by Estonian
legislation.
The necessary administrative structures in this area are in place and function adequately.
The Estonia National Communication Board (ENCB) is a fully independent regulatory
authority with licensing powers and supervision functions. However, it operates under
the administrative authority of the Ministry of Economic Affairs and Communications.
In the area of
postal services,
Estonia’s legislative alignment remains to be completed,
inter alia
regarding the independent regulatory body, the licence regime, universal
service providers as well as standards for quality monitoring for postal services. The
administrative capacity in this sector is in place and the ENCB also exercises the
functions of regulatory institution for the postal field. However, given that the Ministry
of Economic Affairs and Communications represents the full state shareholder’s interest
in Eesti Post, the incumbent universal service provider, and at the same time exercises
the administrative authority over ENCB, conflicts of interest could arise.
Conclusion
Estonia is meeting the majority of the commitments and requirements arising from the
accession negotiations in the
telecommunications
area and is partially meeting the
commitments and requirements in the
postal services
sector. Attention must be given to
the transposition and implementation of the telecommunications
acquis.
In order to
complete preparations for membership, enhanced efforts must be made with regard to the
transposition of the
acquis
in the postal sector. Estonia must ensure the correct
application of the universal service
acquis.
Possible conflict of interests, as the
Government is both the majority shareholder and regulator of Eesti Post, should be
resolved.
Chapter 20: Culture and audio-visual policy
The culture and audio-visual policy chapter requires legislative alignment with the
Television without Frontiers directive and contains the community programmes Culture
2000, Media Plus and Media Training. Alignment with the Television without Frontiers
directive creates the conditions for the free movement of television broadcasts within the
Community. It implies basic common requirements concerning advertising; the
protection of minors and public order; and the promotion of European works.
Estonia has met the commitments and requirements arising from the accession
negotiations on
culture and audio-visual policy
and will be in a position to implement
the
acquis
by accession.
Chapter 21: Regional policy and co-ordination of structural
instruments
The
acquis
under this chapter consists mostly of regulations, which do not require
transposition into national legislation. They define the rules for drawing up, approving
and implementing Structural Funds programmes and Cohesion Fund actions. These
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programmes are negotiated and agreed with the Commission, but implementation is the
responsibility of the Member States. It is essential that Member States respect
Community legislation in general, for example in the areas of public procurement,
competition and environment, when selecting and implementing projects, and have the
necessary institutional structures in place to ensure implementation in a sound and cost
effective manner from the point of view of both management and financial control.
Estonia has agreed with the Commission on a NUTS classification of its
territorial
organisation.
The essential feature of the
legislative framework,
i.e. the ability to ensure multi-annual
budget programming, is in place. Draft amendments to the State Budget Act have been
drafted to ensure the necessary flexibility.
The legislative framework for financial control and compliance with other Community
policies is monitored in other chapters. However, in order for Estonia to make effective
use of its eligibility for structural funds from 1 January 2004, the relevant
acquis
in areas
such as public procurement, state aid and environmental protection will need to be fully
respected from that date. In particular, urgent efforts are needed in the area of public
procurement.
The necessary
institutional structures
for the preparation and implementation of the
Structural and Cohesion Funds have been identified. However, those structures in charge
of the implementation of the specific financial control provisions, including the 5% and
15% on-the-spot checks, have not yet been formally designated. The Foreign Investment
Department of the Ministry of Finance is designated as the Managing Authority. The
National Fund Department of the same ministry will assume the role of the Paying
Authority.
Effective inter-ministerial co-ordination and establishment of the delivery structure
placed under the responsibility of the Managing Authority, as well as of the functions of
the Paying Authority require close attention. The final division of tasks between the
Managing Authority and the intermediate bodies, as well as amongst the intermediate
bodies themselves, needs to be fully clarified.
Functionally independent internal audit units are being established in all Intermediate
Bodies. The required separation of functions has been made. Training of auditors
continues to be a priority.
As regards
programming,
the draft Single Programming Document (SPD), submitted in
March 2003, provides a good basis for the ongoing negotiations. The Programme
Complement was submitted in May 2003. The ex-ante evaluation and the strategic
Environmental Impact Assessment were submitted with the SPD. As regards partnership,
Estonia has involved a wide number of actors in the preparation of the draft SPD.
Considerable and sustained efforts are required to establish a pipeline of projects that are
ready to be implemented in technical and financial terms, so that Estonia is able to
benefit from Community funds as soon as the programme starts. This would include
clarification of any state aid cases and their clearance by the Commission. A key concern
is the preparation of projects at the local level, due to the inexperience of local
stakeholders.
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A Monitoring and Evaluation Unit has been established in the Ministry of Finance
(within the Foreign Investment Department). However, delays have occurred in the
development of the monitoring information system, which is now planned for May 2004.
Given the importance of this system, its further development should be closely followed.
Arrangements for
financial management and control
have been made. Estonia now
needs to focus on finalising specific procedures for financial control, auditing,
certification of expenses, and correction of irregularities. Separate accounting codes
should be used within the existing accounting systems for the needs of the Structural
Funds and the Cohesion Fund.
Additionality will be verified before approval of the Single Programming Document.
Conclusion
Estonia is essentially meeting the requirements for membership in relation to
territorial
organisation
and
programming.
Concerning programming it needs to focus on
establishing an adequate pipeline of well-prepared projects and on setting up a
functioning computerised monitoring system. Estonia also needs to give priority to
strengthening partnership arrangements.
Estonia is only partially meeting the requirements in relation to the
legislative
framework, institutional structures
and
financial management and control.
Estonia
must fully align its legislation with the
acquis
on public procurement, and ensure the
effective application of the resulting rules and procedures by final beneficiaries in order
to benefit from Community funding from 1 January 2004. Particular attention must be
paid to finalising arrangements for financial management and control.
Chapter 22: Environment
Community environment policy aims to promote sustainable development and protect the
environment for present and future generations, and is based on the integration of
environmental protection into other Community policies, preventive action, the polluter
pays principle, fighting environmental damage at source, and shared responsibility. The
acquis
comprises over 200 legal acts covering horizontal legislation, water and air
pollution, management of waste and chemicals, biotechnology, nature protection,
industrial pollution and risk management, noise, and radiation protection. Ensuring
compliance with the
acquis
requires significant investments, but also brings significant
benefits for public health and reduces costly damage to forests, buildings, landscapes and
fisheries. A strong and well-equipped administration at national, regional and local level
is imperative for the application and enforcement of the environment
acquis.
Horizontal legislation
is in place and is in line with the
acquis,
except for the recent
acquis
on strategic environmental impact assessment, which needs to be transposed and
implemented by July 2004 in line with the Directive. While the relevant administrative
capacities are in place and function adequately, the competent authority for strategic
environmental impact assessment needs to be designated.
In the
air quality
sector, the
acquis
has not yet been fully transposed. The Ambient Air
Protection Act, one new implementing regulation and two existing regulations need to be
amended as regards air quality directives. Administrative capacities are in place and
function adequately. Air quality plans and programmes need to be completed and
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monitoring enhanced by accession. As regards volatile organic compound emissions
from storage and distribution of petrol, a transitional arrangement until 31 December
2006, with intermediate targets, has been agreed for certain installations in Estonia.
In the field of
waste management,
the
acquis
has not yet been fully transposed. As
regards packaging waste and landfill of waste, new waste and packaging acts and new
implementing regulations to replace existing acts and regulations still have to be adopted.
Transposition of the recent
acquis
on end-of-life vehicles also needs to be completed by
accession. Administrative capacities are in place and function, but more staff are needed
at ministerial and regional levels. While a national waste management plan has been
adopted, some regional and municipal plans need to be revised and adopted. The
establishment of permit and deregistration systems for end-of-life vehicles needs to be
completed by accession. The establishment of collection systems and recovery and
disposal facilities needs to continue. As regards landfill of waste, a transitional
arrangement until 16 July 2009, with intermediate targets, was agreed for oil shale.
In the area of
water quality,
legislation is not yet fully in place. Full transposition
requires the adoption of implementing regulations related to discharges of dangerous
substances, groundwater and the recent framework
acquis
on water. These need to be
adopted by accession. Administrative capacities are in place and function, but require
continuous close attention. A programme for nitrates needs to be finalised and adopted
by accession. A programme for dangerous substances also needs to be adopted. Close
attention needs to be paid to implementation as regards drinking water, and the problem
of fluoride needs to be solved by accession. Transitional arrangements, until 31
December 2010 for urban waste water and until 31 December 2013 for drinking water,
with intermediate targets, have been agreed.
In the field of
nature protection,
enhanced efforts are required to adopt a new nature
protection act and implementing legislation, including the authorisation for site
designation. Further efforts are needed to finalise the list of proposed sites of Community
interest, to designate special protection areas by accession, and to ensure that relevant
protection measures are applied by accession. Close attention needs to be paid to
ensuring proper consultations while avoiding delays. Administrative capacity at various
levels needs to be further strengthened. A derogation has been agreed as regards strict
protection of lynxes. The Commission will report to the Council by 1 May 2009, and the
Council will review this derogation on the basis of the Commission’s report.
The legislation on
industrial pollution and risk management
is not yet fully in place.
Full transposition requires adoption of an amendment to the Ambient Air Protection Act,
a new Waste Act, and implementing legislation regarding volatile organic compound
emissions from solvents, incineration of waste and the recent
acquis
on large combustion
plants and national emission ceilings. These need to be transposed by accession. Permits
need to be issued and complied with for new installations subject to the rules on
integrated pollution prevention and control (IPPC) by accession, and permits for existing
installations must continue to be issued until October 2007. While administrative
capacities are in place and function, the capacity to issue integrated permits needs to be
strengthened. As regards air pollution from large combustion plants, a transitional
arrangement until 31 December 2015, with intermediate targets, was agreed for certain
installations in Estonia.
The
acquis
concerning
chemicals and genetically modified organisms
(GMOs) has
been transposed, and the legislation is in line with the
acquis,
except for biocides and the
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recent
acquis
on the deliberate release into the environment of GMOs, which need to be
transposed by accession. Administrative capacities are in place and function.
Implementing measures are proceeding as planned. Authorisation procedures for
biocides need to be established by accession. Co-ordination between the organisations
involved needs to continue to be enhanced.
Transposition of the
acquis
on
noise
is proceeding according to schedule, and the
legislation is in line with the
acquis.
The
acquis
on noise from outdoor equipment needs
to be completed by accession and the recent
acquis
on ambient noise needs to be
transposed by July 2004 in line with the Directive. Administrative capacities are in place
and function.
The legislation on
nuclear safety and radiation protection
is not yet fully in place.
Enhanced efforts are required to adopt a new act on radiation protection and a number of
implementing regulations on basic safety standards, outside workers, shipments of
radioactive waste, information on emergencies and medical exposure by accession.
Administrative capacities in this area are largely in place and function.
Conclusion
Estonia is essentially meeting the commitments and requirements arising from the
accession negotiations and is expected to be in a position to implement the
acquis
in the
areas of
horizontal legislation, water quality, industrial risk management, chemicals
and genetically modified organisms
and
noise
by accession. Estonia needs to finalise
legal alignment as regards the following areas: horizontal legislation, water quality,
chemicals and genetically modified organisms and noise. It needs to complete air quality
plans and programmes and continue to enhance air quality monitoring. Moreover,
Estonia must pay particular attention to implementation in the water sector and to
finalising necessary programmes on water. As regards waste management, Estonia needs
to strengthen administrative capacity at ministerial and regional levels. Regional and
municipal waste management plans need to be completed. The establishment of waste
collection systems and recovery and disposal facilities needs to continue. In addition, in
the area of nature protection further efforts are needed to finalise the lists of proposed
nature protection sites and special protection areas. In this context, close attention needs
to be paid to ensuring proper consultation while avoiding delays. Administrative capacity
for integrated permits requires close attention. Permits for IPPC installations need to
continue to be issued and complied with according to
acquis
deadlines. Authorisation
procedures for biocides need to be established.
Estonia is partially meeting the commitments and requirements in the areas of
air
quality, waste management, nature protection, industrial pollution
and
nuclear
safety and radiation protection.
In order to complete preparations for membership,
enhanced efforts are required to amend the ambient air act and adopt a new waste act, a
new packaging act, a new radiation protection act and a new nature protection act.
Moreover, a significant amount of implementing legislation remains to be adopted by
accession. Although Estonia has taken steps to implement the
acquis
in these areas, it
needs to ensure that delays in the adoption of legislation do not have an adverse effect on
ensuring full implementation by accession. In addition, the administrative capacity for
nature protection requires close attention at various levels.
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Chapter 23: Consumer and health protection
The
acquis
covers protection of the economic interests of consumers (concerning
misleading and comparative advertisement, price indication, consumer credit, unfair
contract terms, distance and doorstep selling, package travel, timeshare, injunctions for
the protection of consumers’ interests, and certain aspects of the sale of consumer goods
and associated guarantees) as well as the general safety of goods (liability for defective
products, dangerous imitations and general product safety). Recently adopted legislation
includes rules on general product safety and distance marketing of consumer financial
services. The acceding countries need to effectively enforce the
acquis
through
appropriate judicial and administrative systems, including market surveillance and a role
for consumer organisations.
In the area of
safety-related measures
Estonia has completed alignment related to
liability for defective products. The revised general product safety directive remains to
be transposed. The relevant administrative structures are in place, but
market
surveillance
relating to general product safety is only partly developed. The Consumer
Protection Board under the Ministry of Economic Affairs and Communication is the
main market surveillance body and has signed several co-operation agreements with
other institutions. However, market surveillance activities should be further developed
(for example, by designing pro-active surveillance plans) and the capacity of the main
enforcement structures reinforced. The number of inspectors engaged in market
surveillance activities should be increased, as should laboratory capability for testing the
safety of non-food products.
As regards
non-safety related measures,
with the adoption of the Law on Obligations
Estonia has made further steps to complete transposition. However, the Consumer
Protection Act needs to be brought into line with the
acquis
on injunctions for the
protection of consumers’ interests and on indication of the prices of products offered to
consumers. The relevant administrative framework is in place. The Consumer Protection
Board is working effectively to settle consumer complaints and to inform and advise
consumers. Of the 1 763 consumer complaints submitted to the Board in 2002, 94% were
resolved by the body. However, it should be further strengthened both in terms of human
and financial resources.
With regard to
consumer organisations,
the development of an effective consumer
movement in Estonia needs greater support. There is one umbrella consumer
organisation in place, which groups together ten legal entities. Activities in areas such as
representation of consumer interests, testing of products, publications on consumer issues
and consumer education should be further developed. Improvements are also necessary
to increase the level of consumers’ and businesses’ awareness of their rights and
responsibilities.
Conclusion
Estonia is essentially meeting the commitments and requirements arising from the
accession negotiations in the areas of
safety-related measures
and
consumer
organisations
and is expected to be in a position to implement this
acquis
as from
accession. Estonia needs to complete alignment of the revised general product safety
directive.
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Estonia is meeting the majority of the requirements for membership in the areas of
market surveillance
and
non-safety related measures.
In order to complete
preparations for membership, Estonia needs to improve market surveillance, in particular
through the development of pro-active surveillance plans, and thereby ensure the proper
enforcement of legislation on safety and non-safety related measures including by
strengthening the administrative capacity and structure. Alignment with the
acquis
in the
area of non-safety related measures should also be finalised.
Chapter 24: Justice and home affairs
The most developed part of this chapter is the Schengen
acquis,
which entails in the
lifting of internal border controls. However, much of this
acquis
will not apply to the
acceding countries upon accession, but only after a later separate Council Decision. The
Schengen Implementation Action Plan aims at preparing this on the basis of a credible
schedule for the introduction of the Schengen provisions. Binding rules which must be
put in place as from accession include part of the rules on visas, rules on external borders
and the acquis on migration, asylum, police co-operation, combating organised crime,
fight against terrorism, fraud and corruption and drugs, customs co-operation as well as
human rights legal instruments. On issues such as border control, illegal migration, drugs
trafficking and money laundering, organised crime, police and judicial co-operation, data
protection and the mutual recognition of court judgements, acceding countries need to be
equipped to meet adequate standards of administrative capacity. The establishment of an
independent, reliable and efficient judiciary and police organisation are also of
paramount importance.
With regard to the preparation of the Schengen provisions (Schengen
Action Plan)
relevant for accession, progress is still broadly satisfactory in Estonia, but significant
efforts will be needed after accession to prepare for the lifting of internal borders and full
implementation of the Schengen
acquis
once a further decision has been taken by the
Council. The preparation for integration into the Schengen Information System (SIS) II is
continuing according to schedule.
In the field of
data protection,
Estonia has largely aligned its legislation, also on the use
of personal data by the police. Outstanding amendments to the “Statutes of the Data
Protection Inspectorate” should be adopted (see
also Chapter 3 - Free movement of
services).
The responsible body, the Data Protection Inspectorate, has been in place since
1999. Staff and training and inter-agency co-operation should be further enhanced.
On
visa policy,
Estonia has almost completed alignment with the EU visa
acquis.
Estonia has introduced visas requirements for all countries with EU visa obligations and
has to implement and complete bilateral visa free travel arrangements with 17
outstanding countries. Estonia should also introduce a visa sticker following the
transmission of the relevant technical specifications by the EU in August 2003. As
regards implementation and administrative capacity, the national visa register is
operational, with connections with the Estonian foreign representations for processing
visa requests. The capacity of the consulates in the Russian Federation, Belarus and
Ukraine need to be reinforced. Estonia also has to provide all diplomatic and consular
missions with equipment to detect forged and falsified documents.
As regards the management of the future
external borders,
remaining legislation
concerning border control and border surveillance should be aligned. Border co-
operation agreements with neighbouring countries are in place although the Border
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Agreement, including demarcation, with the Russian Federation has not yet been signed.
Implementation of the relevant parts of its Schengen Action Plan is ongoing, although
Estonia still needs to develop an Integrated Border Management Strategy. Inter-agency
co-operation has been improved by the conclusion of several co-operation agreements
between the various law enforcement agencies. However, particular attention is needed
for the recruitment of staff and the allocation of sufficient financial means to fully
implement the Schengen Action Plan. Estonia is in the process of upgrading its
equipment for border surveillance, including sea borders and the construction and
renovation of border posts at Estonia’s eastern border.
In the area of
migration,
legislative alignment has been completed, including with
regard to carrier liability. However, provisions concerning expulsion still need to be
adopted. Estonia is taking action to conclude readmission agreements with the Russian
Federation, Belarus and Ukraine; however further efforts are required. Administrative
structures are in place at the visa and illegal immigration department of the Citizens and
Migration Board.
In the field of
asylum,
Estonia has completed its alignment. As regards implementation
capacity Estonia needs to accelerate its preparation (technical and organisational) for
active participation in EURODAC and Dublinet, including the establishment of the
corresponding National Action Points, in order to ensure full implementation by
accession. Its reception capacity is adequate.
In the area of
police co-operation and combating organised crime,
preparations are
broadly satisfactory. Management, quality control and salary levels of the police are
good, as is inter-agency co-operation and, increasingly, information sharing through use
of police databases. The organisational reform of the police (including reducing the
number of prefectures and creating regional emergency centres) remains to be
implemented. Police training is also in good order, but a decision still needs to be made
on the funding of the new training system that will start in 2004. As regards co-operation
and co-ordination between the police and the prosecuting and judicial bodies, the
changes foreseen under the new Criminal Procedure Code will require adequate
preparation and training of the police and prosecutors to ensure smooth implementation.
International co-operation is well established and supported by co-operation agreements,
in particular the conclusion of an agreement with Europol. Attention should be paid to
the timely preparation of national procedures in order to ensure the swift ratification of
the Europol Convention upon accession to the EU. The strengthening of the International
Criminal Intelligence Department's administrative capacity in connection with the
establishment the Supplementary Information Request at the National Entries Bureau
should be stepped up. Inter-agency co-operation is being reinforced. Estonia has signed
but not yet ratified the three protocols to the UN Convention against transnational
organised crime.
Estonia has ratified the most important Conventions in the area of the
fight against
terrorism.
Estonia should accelerate its preparatory efforts in order to accede to the
Convention on Mutual Assistance in Criminal Matters between the EU Member States
upon accession.
As regards the
fight against fraud and corruption,
Estonia still needs to align with the
acquis
on the protection of the European Communities’ Financial Interest and its
Protocols and to adopt the necessary amendments of the Penal Code before accession. It
should also align with the provisions of the 1997 Convention on the Fight Against
46
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Corruption involving Officials of the European Communities or Officials of Member
States of the EU. Alignment with the Council Framework Decisions of 29 May 2000 and
6 December 2001 on the protection of the euro against counterfeiting is also still
necessary. Estonia has yet to designate a National Central Office, dealing notably with
banknote and coin analysis. Full implementation of this
acquis
should be ensured.
Progress has been made to establish the anti-corruption legal framework by
implementing appropriate legislation and establishing supporting institutions. An overall
anti-corruption strategy still needs to be developed in order to ensure effective anti-
corruption co-ordination between relevant authorities and establish an early corruption
detection strategy. As regards
corruption,
see also
Section C.1. — Administrative and
judicial capacity.
On the
fight against drugs,
Estonia has largely completed its legislative measures. The
new multidisciplinary national drug strategy still needs to be adopted by the Government.
The alcohol and drug abuse prevention programme 1997-2007 continues to be
implemented. Implementation, however, needs further improvement, including the
necessary arrangements for connection of databases, collection and exchange of
information and the allocation of sufficient financial resources. The institutional
infrastructure of the National Focal Point for co-operation with the European Monitoring
Centre for Drugs and Drug Addiction (EMCDDA) is in place. Overall, inter-agency co-
operation and co-ordination needs to be increased.
Estonia still needs to complete its legislative alignment with the most recent
acquis
on
money laundering.
A Financial Intelligence Unit is in place, but its resources and
capacities should be reinforced (see
also Chapter 4 – Free movement of capital).
In the area of
customs co-operation,
Estonia still needs to align its legislation and to
ratify the relevant conventions in this area. Inter-agency co-operation is provided for as
well as co-operation with businesses on the basis of memoranda of understanding.
However, inter-agency co-operation needs to be further improved and a register for
customs investigation established.
In the area of
judicial co-operation in civil and criminal matters
legislative alignment,
where still necessary, is ongoing and Estonia should be ready upon accession to apply it
and accede to the relevant conventions. Particular attention is needed for alignment with
the Council Framework Decision of 13 June 2002 on the European arrest warrant and the
surrender procedure between Member States. The administrative structures for direct
contacts between competent judicial authorities are in place but need to be further
strengthened.
As regards the
reform of the judiciary
in general, a detailed analysis is provided in
Section C.1. — Administrative and judicial capacity.
All the
human rights legal instruments
under the justice and home affairs
acquis
have
been ratified by Estonia.
Conclusion
Estonia is essentially meeting the commitments and requirements arising from the
accession negotiations and is expected to be able to implement by accession the
acquis
in
the areas of
Schengen Action Plan, visa policy, external borders, migration, asylum,
police co-operation and combating organised crime, the fight against terrorism,
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drugs, customs co-operation, judicial co-operation in civil and criminal matters and
human rights legal instruments.
Estonia is partially meeting the commitments and requirements for membership in relation
to the
data protection, fight against fraud and corruption
and
money laundering.
Estonia needs to adopt and implement the necessary legislation. Particular attention must
be given to the technical an organisational preparations necessary to implement
EURODAC and Dublin II. Overall, inter-agency co-operation needs to be improved and
co-ordination structures strengthened.
Chapter 25: Customs union
The Customs Union
acquis
consists almost exclusively of legislation which is directly
binding on the Member States and does not require transposition into national law. It
includes the Community’s Customs Code and its implementing provisions; the
Combined Nomenclature, Common Customs Tariff and provisions on tariff
classification, customs duty reliefs, duty suspensions and certain tariff quotas; and other
provisions such as those on customs control of counterfeit and pirated goods, drugs
precursors and cultural goods and on mutual administrative assistance in customs matters
as well as Community agreements in the areas concerned, including transit. Member
States must ensure that the necessary enforcement capacities, including links to the
relevant EC computerised customs systems, are in place.
Estonia’s
customs legislation
is largely in line with the
acquis
as it stood in 2001.
Implementation of the provisions in the 2002 and 2003
acquis
will take place upon
accession, when the EC customs legislation becomes directly applicable. National
provisions superseded by the
acquis
are to be repealed at the time of accession and
agreements on mutual administrative assistance in customs matters are to be amended as
necessary.
Administrative and operational capacity
is partly in place. Although a functioning
customs administration is in place, the current absence of duties on industrial products
does not allow Estonian customs to function in the same way as in EU Member States.
Such duties will be introduced only at the time of accession. As a result, tariff
classification, rules of origin, customs procedures with economic impact, temporary
admission and duty reliefs are major areas where expertise is lacking. Therefore, in these
areas extensive training is necessary and ongoing.
The envisaged IT simulation, which aims at providing the Estonian customs service with
practice in an EC-type environment, should be implemented prior to the introduction of
the Community Integrated Tariff (TARIC) system which Estonia intends to start
operating in parallel with the existing national system two months before accession.
Preparations should also be made for the implementation of quota management, through
introduction of dedicated software and training.
The
Customs services’ capacity to
combat fraud and economic crime, in close co-operation with other enforcement bodies,
should continue to be strengthened.
Estonia should continue to carry out its plans for reorganisation in terms of closure of
customs offices, and redeployment of staff as a result of accession, when the volume of
customs work will decrease as a result of the conversion of external to internal trade and
the land frontier with Latvia becomes an internal border.
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Measures to complete the development and implementation of the computerised customs
system and solve all the other interconnectivity-related issues are ongoing and on track.
However, the Estonian authorities must ensure that the remaining work, including
delivery of hardware and software and testing, is completed according to schedule,
especially as regards the integrated tariff system and adaptation of the declaration-
processing system which needs to be connected to it. Attention should be paid to
ensuring that the Estonian authorities are fully able to manage and maintain these
systems effectively after accession.
Conclusion
Estonia is essentially meeting the commitments and requirements for membership in the
customs union
area. Subject to good progress being maintained in the preparation for the
application of tariffs and tariffs-related measures, in completing the remaining work on
computerised systems, and training on Community measures and provisions, Estonia is
expected to be in a position to implement the
acquis
with the necessary administrative
and operational capacity by accession. The development and implementation of
computerised customs systems and work aimed at ensuring inter-operability remain to
be completed. Attention should also be paid to improving co-operation by the customs
administration with other enforcement bodies.
Chapter 26: External relations
The main element in this chapter, the common commercial policy, is made up of directly
binding EU legislation which does not require transposition into national law. The
acceding countries were requested to align before accession with the
acquis
on dual-use
goods and, where applicable, export credits. Acceding countries committed themselves to
ensure compatibility with the
acquis
of their bilateral agreements with third countries. In
the area of humanitarian aid and development policy, countries need to ensure the
capacity to participate in the EC’s development and humanitarian policies.
The administrative structures for dealing with the issues related to the
common
commercial policy
are essentially in place and sufficient.
Estonia has co-ordinated its positions and policies with the Commission with regard to
the Doha Development Agenda. Estonia should continue close co-ordination and co-
operation with the Commission, mainly in order to carry on preparing the convergence of
its GATS commitments and Most Favoured Nation (MFN) exemptions into the EU ones
(consolidation EU 25), to be finalised upon accession. Exchanges of information have
taken place on Estonia’s third stage of integration under the Agreement on Textiles and
Clothing (ATC), although some discrepancies remain.
On trade in dual-use goods, Estonia has reached a high degree of alignment with the
acquis.
However, further alignment, in particular regarding the list of dual-use items,
needs to be achieved, since export control regimes continue to adopt decisions that the
EU integrates into its legislation. Membership in all export control regimes is a crucial
factor enabling implementation of export controls by Estonia. Based on the Thessaloniki
Action Plan to support the acceding countries’ membership in export control regimes, the
EU supports Estonia’s accession to the regimes to which it has already applied but is not
yet a member. Full alignment as regards the Community general export authorisation can
only take place upon accession. Administrative structures are adequate in the area of
dual-use goods, with ongoing efforts to train customs officials.
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Estonia is finalising its compliance with the
acquis
in the area of export credits. The
amended State Export Guarantees Act has entered into force and implementing
legislation is being adopted. Administrative structures for export credits are in place and
satisfactory.
Estonia needs to take further steps to terminate or renegotiate those
bilateral
agreements with third countries
that are found to be incompatible with the
acquis,
within the timeframe set by the respective agreements. Following the successful
signature of the Memorandum of Understanding regarding the bilateral investment treaty
(BIT) between Estonia and the USA, Estonia must ensure swift ratification of the
additional protocols to the BIT, which were also signed with the US, in order for the
adaptations to enter into force by the date of its accession to the EU.
In the area of
humanitarian aid and development policy,
Estonia needs to further
pursue the shaping of a development policy in line with EU principles, particularly as
regards financial expenditure levels given that the 2003 budget in this area represented
less than 0.01% of GDP. It needs to ensure that its policy is in line with the guidelines
laid down by the OECD Development Assistance Committee, as well as the
commitments and objectives that Estonia has approved in the context of the UN and
other international organisations. A new legislative framework to increase the
transparency of the decision-making process and of project management in the area of
development co-operation has been adopted. The few humanitarian aid actions
undertaken seem to be in line with EU practice.
Conclusion
Estonia is essentially meeting the commitments and requirements arising from the
accession negotiations and is expected to be able to implement the
acquis
on the
common commercial policy
and
humanitarian aid and development policy
from
accession.
Estonia is meeting the majority of the commitments and requirements for membership in
relation to
bilateral agreements with third countries.
In order to complete preparations
in this area, Estonia must finalise the steps it has taken to renegotiate or terminate its
bilateral agreements to make sure that they are compatible with the
acquis
upon
accession.
Chapter 27: Common foreign and security policy
The
acquis
related to the common foreign and security policy (CFSP) is essentially based
either on legally binding international agreements or on political agreements to conduct
political dialogue in the framework of CFSP, to align with EU statements, and to apply
sanctions and restrictive measures where required.
Estonia has the required administrative capacity to participate in the
political dialogue.
With regard to alignment with
EU sanctions and restrictive measures, statements,
declarations and démarches,
Estonia has adopted the necessary legislation in relation to
the introduction and withdrawal of economic sanctions. The administrative structures in
this area in Estonia are in place and satisfactory.
Conclusion
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Estonia is essentially meeting the commitments and requirements arising from the
accession negotiations in the chapter on the
common foreign and security policy,
and is
expected to be able to participate in the political dialogue and to align with EU
statements, sanctions and restrictive measures by accession.
Chapter 28: Financial control
The
acquis
under this chapter consists mostly of general, internationally agreed and EU-
compliant principles of public internal financial control that need to be transposed into
the control and audit systems of the entire public sector. In particular, the
acquis
requires
the existence of adequate ex ante financial control and functionally independent internal
audit systems; an independent external audit of the public internal financial control
systems in the public sector; an appropriate financial control mechanism for EU pre-
accession funding and future structural action expenditure; and arrangements on the
protection of EC financial interests. In addition, an anti-fraud co-ordination service,
capable of co-operating with the Commission’s Anti-fraud Office OLAF at an
operational level, is to be designated.
In the area of
public internal financial control,
Estonia has put framework and
implementing legislation in place which is in line with the
acquis.
Internal audit facilities
are in place in all income and spending centres, as well as in county governments, and a
Central Harmonisation Unit has been established in the Ministry of Finance. Adequate
training facilities for PIFC have been established.
In the field of
external audit,
framework legislation is in place and is in line with the
acquis.
The State Audit Office (SAO) is functionally independent and its audit services
satisfactorily cover all public and EU funds. The recently developed audit manuals still
need adoption. Formal mechanisms for Parliament to react to SAO reports are included
in the SAO law. A strategy for 2003-5 has been adopted, including improving co-
operation with Parliament and continuing preparation of SAO audit standards based on
international standards.
As regards
control over EU pre-accession funding and structural action expenditure,
framework and implementing legislation in Estonia is in place and is essentially in line
with the
acquis.
However, audit manuals with a specific focus on on-the-spot checks and
annual audits need to be developed for the future auditing of the Structural and Cohesion
Funds. Appropriate administrative structures are being set up and Estonia should
continue to enhance its administrative capacity to manage future structural funds in order
to meet fully the requirements for financial control and internal audit. Estonia needs to
complete its efforts to implement the extended decentralised implementation system
(EDIS) for Phare and ISPA.
In the area of the
protection of EC financial interests,
Estonia needs to complete the
framework and implementing legislation in particular, with a view to defining the powers
and co-ordinating role of the anti-fraud co-ordinating service (AFCOS), located within
the Ministry of Finance’s Financial Control Department. The AFCOS’ operational
capacity also needs to be substantially reinforced, enabling co-operation with OLAF and
with other Estonian institutions to be effectively implemented.
Conclusion
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Estonia is essentially meeting the commitments and requirements arising from the
accession negotiations in the area of
public internal financial control, external audit
and
control over structural action expenditure
and is expected to be in a position to
implement the
acquis
in these fields as of accession. It should continue to enhance its
administrative capacity in the areas of public internal financial control and of managing
future structural funds. Estonia should also complete its preparations for the extended
decentralised implementation system.
Estonia is meeting the majority of the commitments and requirements arising from
accession negotiations in the area of
protection of EC financial interests.
In order to
complete preparations for accession, enhanced efforts are required to reinforce its
legislation and administrative capacity in this area.
Chapter 29: Financial and budgetary provisions
Chapter 29 covers the rules concerning the financial resources necessary for the funding
of the EC budget (‘own resources’). These own resources are made up mainly from
contributions from Member States based on 1) traditional own resources from customs
and agricultural duties and sugar levies, 2) a resource based on VAT and 3) a resource
based on the level of gross national income (GNI). Member States must ensure the
creation of appropriate administrative capacity to adequately co-ordinate and ensure the
correct calculation, collection, payment and control of own resources and reporting to the
EU for implementation of the own resources rules.
As regards the
traditional own resources (TOR),
the national reporting system on cases
of fraud and irregularity is currently being reconsidered. Estonia should finalise the
system and ensure that the data required by the Commission’s OWNRES system will be
available. Definitive procedures and systems for A and B accounts still need to be
established.
Estonia needs to improve its ability to correctly calculate the
VAT-based resource,
in
particular as regards the calculation of the weighted average rate in accordance with
ESA95.
As regards the
GNI-based resource,
continued efforts are needed by Estonia to further
improve the quality and reliability of the national accounts and GNI calculations in line
with ESA95, in particular, with respect to exhaustiveness, durable goods of small value,
own account software and in the field of constant price estimates.
All institutions necessary for application of the own resources system in Estonia exist. A
unit within the Ministry of Finance co-ordinates a task force for own resources issues,
which is operating effectively.
Conclusion
Estonia is essentially meeting the commitments and requirements arising from the
accession negotiations in the area of
financial and budgetary provisions
and is
expected to be in a position by accession to implement the relevant
acquis.
Estonia
should now focus attention on completing preparations under this chapter by finalising
OWNRES procedures for reporting to the European Commission, establishing the
definitive procedures for the A and B accounts, improving the calculation of the VAT
resource and further improving the quality and reliability of the national accounts.
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D.
C
ONCLUSION
Against the background of weak external demand, macroeconomic performance in
Estonia remained solid but the current account deficit widened appreciably. The
authorities adhered to their reform path, particularly in the areas of pension reform and
financial supervision.
As regards the areas where last year’s report suggested improvements, some progress has
been made, but challenges remain. The expansionary fiscal policy, notably during 2002
and 2003, at the level of the local and central governments poses a risk to
macroeconomic stability, particularly in the light of a widening current account deficit.
Active labour market policies are being pursued to address the unemployment problem
and progress to-date has been satisfactory. The restructuring of the oil-shale sector is
advancing, but there has been no further liberalisation of the energy market.
As regards overall administrative and judicial capacity, sufficient conditions are in place
for the implementation of the
acquis
by the Estonian public administration and judiciary,
but there is room for further improvements. In the field of public administration,
weaknesses in the conditions of service and career structures should be improved, as well
as co-ordination across the civil service. A number of further reforms remain to be made
to the judicial system, and will partly result from the new Code of Criminal Procedure,
due to enter into force in July 2004. Estonia should continue to improve the effectiveness
of its anti-corruption measures.
As regards the implementation of the
acquis
in specific policy areas, the findings of this
report are set out below.
Firstly, it should be noted that Estonia has reached a
high level of alignment with the
acquis
in most policy areas.
It is expected to be in a position to implement the
acquis
as required in the following
areas by accession: horizontal and procedural measures, and new approach legislation in
the
free movement of goods
chapter; citizens’ rights, free movement of workers and co-
ordination of social security systems, in terms of
free movement of persons;
the banking
sector and insurance in the area of
freedom to provide services;
capital movements and
payments, and payment systems related to the
free movement of capital; company law
and accounting; and
competition policy.
In the area of
agriculture,
Estonia is expected to
be in a position by accession to implement the
acquis
in a number of horizontal areas, in
most common market organisations, in rural development, and in the veterinary field in
areas such as animal disease control, zootechnics and animal welfare; and in
fisheries,
in
the areas of state aid and international agreements.
Estonia is also expected to be in a position to implement the acquis by accession in: the
majority of the
transport
sector; most areas in the field of
taxation; economic and
monetary union; statistics;
health and safety, social dialogue, employment policy, social
inclusion and social protection in the area of
social policy and employment;
the
energy
sector;
industrial policy; small and medium-sized enterprises; science and research;
education and training; culture and audio-visual policy;
programming for
regional
policy and co-ordination of structural instruments;
horizontal legislation, industrial risk
management, water quality, chemicals, genetically modified organisms and noise in the
environment
chapter; safety-related measures and consumer organisations in terms of
consumer and health protection;
almost all aspects of
justice and home affairs; customs
- 53 -
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union;
the common commercial policy, and humanitarian aid and development policy in
the
external relations acquis; common foreign and security policy;
most aspects of
financial control;
and the area of
financial and budgetary provisions.
Secondly, in certain areas Estonia partially meets the commitments and requirements and
needs to make
enhanced efforts
in order to complete its preparations for accession.
This includes the old approach sectoral legislation on the
free movement of goods,
as
well as public procurement and the non-harmonised area; in the area of
free movement of
services,
the fields of investment services and securities markets, protection of personal
data, information society services, and the right of establishment and the freedom to
provide non-financial services; in the fields of
free movement of capital,
the
reinforcement of its efforts in the fight against money laundering; and, within the area of
company law,
the protection of intellectual and industrial property rights. In the
agriculture
area it concerns the Paying Agency, the Integrated Administration and
Control System (IACS), trade mechanisms, the common market organisation for milk,
TSEs and animal by-products, the veterinary control system, trade in live animals and
animal products, public health in agri-food establishments, common measures, animal
nutrition and phytosanitary issues; and most areas of the
fisheries
policy.
This also includes the fields of: air and maritime
transport,
direct
taxation;
public health,
the European Social Fund, and anti-discrimination in the area of
social policy and
employment; telecommunications and information technologies,
including the postal
services sector; the legislative framework, institutional structures and financial
management and control for
regional policy and co-ordination of structural instruments;
legislative alignment and implementation in the air quality, waste management, industrial
pollution, nature protection, and nuclear safety and radiation protection areas of
environment
policy; market surveillance and non-safety measures in the area of
consumer and health protection;
data protection, and the fight against fraud, corruption
and money laundering in the area of
justice and home affairs; external relations,
as
regards bilateral agreements with third countries; and the protection of EC financial
interests in the area of
financial control.
Thirdly, Estonia must take immediate and decisive action to address three issues of
serious concern
in two chapters of the
acquis
if it is to be ready by the date of accession.
This concerns the field of
free movement of persons,
relating to Estonia’s preparations
for mutual recognition of qualifications for certain professions in the healthcare sector. It
also concerns the field of
social policy and employment,
as regards labour law, and equal
treatment of women and men.
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1465030_0055.png
S
TATISTICAL ANNEX
1998
Basic data
Population (average)
Total area
National accounts
Gross domestic product at current prices
Gross domestic product at current prices
Gross domestic product per capita a) at current
prices
Gross domestic product at constant prices (nat.
currency)
Employment growth
Labour productivity growth
Unit labour cost growth
Gross domestic product per capita a) at current
prices
GDP per capita a) at current prices in PPS
Labour productivity (GDP per person employed in
PPS)
Structure of production
- Agriculture
- Industry (excluding construction)
- Construction
- Services
Structure of expenditure
- Final consumption expenditure
- household and NPISH
- general government
- Gross fixed capital formation
- Stock variation c)
- Exports of goods and services
- Imports of goods and services
Inflation rate
Consumer price index
73.5
4.7
3,400
1,386
45,227
1999
1,376
45,227
2000
in 1000
1,370
in km²
45,227
2001
1,364
45,227
2002
1,359
45,227
1000 Mio Kroon
76.3
4.9
3,600
87.4
5.6
4,100
97.9
6.3
4,600
108.0
6.9
5,100
1000 Mio ECU/euro
in ECU/Euro
% change over the previous year
4.6
-2.0
6.8
-1.6
8,000
-0.6
-4.3
3.8
5.5
8,200
7.3
-1.3
8.8
-6.5
9,100
6.5
0.8
5.5
-3.0
9,400
6.0
1.3
4.5
-2.1
10.000
in Purchasing Power Standards
in % of EU-15 average
40
39
38
40
40
43
40
42
42
43
% of Gross Value Added b)
7.2
22.6
6.7
63.5
81.6
59.0
22.6
29.6
-0.3
79.7
90.1
6.7
21.1
6.0
66.2
81.6
58.2
23.4
24.9
-0.4
77.2
82.2
6.1
22.5
6.1
65.3
77.4
56.3
21.0
25.4
2.4
93.7
97.7
5.7
22.8
6.2
65.6
75.9
55.9
20.0
26.5
2.4
89.4
93.1
5.4
22.8
6.6
65.3
77.0
57.3
19.7
28.5
2.9
84.2
93.6
as % of Gross Domestic Product
% change over the previous year
8.8
3.1
3.9
5.6
3.6
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1465030_0056.png
1998
Balance of payments
-Current account
-Trade balance
Exports of goods
Imports of goods
-Net services
-Net income
-Net current transfers
-
of which: government transfers
- FDI (net) inflows
Public finance
General government deficit/surplus
General government debt
Financial indicators
Gross foreign debt of the whole economy
Gross foreign debt of the whole economy
Monetary aggregates
- M1
- M2
- M3
Total credit
Average short-term interest rates
- Day-to-day money rate
- Lending rate
- Deposit rate
ECU/EUR exchange rates
- Average of period
- End of period
- Effective exchange rate index
Reserve assets
-Reserve assets (including gold)
-Reserve assets (excluding gold)
External trade
Trade balance
Exports
Imports
Terms of trade d)
Exports with EU-15
Imports with EU-15
-1,277
2,252
3,529
98.5
66.7
67.8
753
751
6.5
11.8
11.2
15.753
15.647
294.0
:
1.5
0.9
1.7
-429
-998
2,399
3,397
511
-74
132
99
513
1999
-277
-827
2,303
3,130
540
-96
106
90
284
2000
-326
-840
3,601
4,441
612
-223
125
97
425
2001
-378
-882
3,748
4,630
649
-315
170
140
603
2002
-847 h)
:
:
:
:
:
:
:
307 h)
in Mio ECU/euro
in % of Gross Domestic Product
-0.4
6.0
-4.0
6.5
-0.4
5.1
0.2
4.8
:
:
2.0
2.9
:
2.5
4.5
8.6
5.7
15.647
15.647
339.4
931
929
3.1
3.6
7.0
4.2
15.647
15.647
346.4
958
956
1.3p
5.8p
in % of Gross Domestic Product
31.5
25.4
30.9
29.6
as % of exports
39.6
32.9
1.2
2.1
:
1.6
11.7
10.2
9.3
15.647
15.647
:
2.1
4.9
9.0
7.6
15.647
15.647
% per annum
33.0
1.4
2.6
:
33.1
1.7
3.2
1000 Mio ECU/euro
(1ECU/euro=..Estonian Kroon)
1992=100
344.4
334.9
Mio ECU/euro
941
938
1,084
1,082
Mio ECU/euro
-986
2,238
3,224
99.9
72.5
65.3
-1,170
3,445
4,615
98.6
76.5
62.6
-1,100
3,698
4,798
108.1
69.5
56.5
-1,441
3,638
5,079
94.4
68.0
57.9
previous year=100
as % of total
56
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1998
Demography
Natural growth rate
Net migration rate (including corrections)
Infant mortality rate
Life expectancy :
Males:
Females:
Labour market (Labour Force Survey)
Economic activity rate (15-64)
Employment rate (15-64), total
Employment rate (15-64), males
Employment rate (15-64), females
72.2
64.6
69.6
60.3
64.4
75.5
-5.2
-4.8
9.4
1999
-4.3
-0.9
9.6
65.4
76.1
2000
-3.9
:
8.4
at birth
65.1
76.0
2001
-4.3
:
8.8
64.7
76.2
2002
-3.9
:
5.7
65.2
77.0
per 1000 of population
per 1000 live-births
% of population
70.0
61.5
65.8
57.8
69.6
60.3
64.1
56.8
69.6
61.0
65.0
57.4
68.3
62.0
66.5
57.9
as % of the total population of the same age group
Employment rate of older workers (55-64)
Average employment by NACE branches
- Agriculture and forestry
- Industry (excluding construction)
- Construction
- Services
Unemployment rate, total
Unemployment rate, males
Unemployment rate, females
Unemployment rate of persons < 25 years
Long-term unemployment rate
Social cohesion
Inequality of income distribution
Early school-leavers
Population in jobless households (persons aged
0-65)
Standard of living
Number of cars
Main telephone lines
Number of subscriptions to cellular mobile
services
Infrastructure
Railway network
Length of motorways f)
21.4
74
312.0
345.3
172.3
:
12.6
10.1
9.3
25.6
7.4
57.7
9.2
9.9
8.3
14.9
4.8
50.2
47.5
8.6
25.2
6.4
59.8
11.3
12.5
10.1
22.1
5.5
44.8
6.8
26.7
7.8
58.7
12.5
13.4
11.5
23.5
6.3
48.5
6.9
27.0
7.2
59.0
11.8
11.5
12.0
24.5
6.2
51.6
6.5
25.0
5.9
62.6
9.1
9.8
8.4
17.3
4.8
In % of total
% of labour force
ratio of top quintile to lowest quintile
:
14.0
11.6
6.3
14.2
11.0
:
14.1
12.0
:
12.6
11.3
% of population aged 18-24
% of population aged 0-65
per 1000 inhabitants
334.4
375.4
282.8
339.4
381.9
407.8
299.2e)
376.2
542.8
295.5
351.5
650.7
in km per 1000 km²
21.4
87
21.4
Km
93
93
98
21.4
21.4
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1465030_0058.png
1998
Industry and agriculture
Industrial production volume indices g)
Gross agricultural production volume indices g)
Innovation and research
Spending on Human
expenditure on education)
Resources
(public
6.77
104.1
96.4
1999
96.6
89.6
2000
114.6
108.2
2001
108.9
99.0
2002
107.1p
96.9p
previous year=100
as % of GDP
7.37
6.66
6.74
7.13E
as % of GDP
Gross domestic expenditure on Research &
Development
Level of Internet access - households
Environment
Total greenhouse gases emissions
Energy intensity of the economy
Share of renewable energy
Modal split of freight transport
p=provisional figures
E=estimated data
:
0.61
0.75
0.66
:
:
per 1000 inhabitants
:
7.0
9.8
:
tonnes CO2 equivalent per capita
49.4
1,576.4
0.2
38.4
45.2
1,468.6
0.2
35.3
45.4
1,316.4
0.2
32.7
:
:
:
35.3
:
:
:
:
kg of oil equivalent per 1000 euro of GDP
as % of total electicity consumption
as % of total freight transport
a) Figures have been calculated using the population figures from National Accounts, which may differ from those
used in demographic statistics.
b) Including FISIM.
c) These figures include changes in inventories,
acquisitions
less disposals of valuables and the statistical
discrepancy between the GDP and its expenditure components.
d) On the basis of unit value indexes.
e) The vehicles not re-registered in the National Motor Vehicle Registration Centre of 1 June 2001 were excluded.
f) Semi-motorway (double-track road).
g) In 2000 year prices as % of previous year.
h) Website of the National Bank
Methodological notes
Inflation rate
For
details
please
refer
to
the
following
link
to
the
Eurostat
website:
http://europa.eu.int/newcronos/suite/info/notmeth/en/theme1/strind/ecobac_ir.htm
Finance
Public finance:
The general government deficit / surplus refers to the national accounts
concept of
consolidated general government net borrowing / net lending (EDP B.9) of ESA95. General government
debt is defined as consolidated gross debt at end-year nominal value.
External trade
Imports and exports (current prices).
The data is based upon the special trade system. Trade Classification:
Trade in goods are recorded using the commodity classification according to the Combined Nomenclature.
Imports are recorded on CIF basis, exports on FOB basis.
Imports and exports with EU-15.
Data declared by Estonia.
Labour market
Indicators are harmonised annual figures with the exception of average employment by NACE branches
and unemployment rate of persons < 25 years, which are for the 2
nd
quarter of the respective year.
58
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1465030_0059.png
The results are based on the European Union Labour Force Survey (LFS). The EU LFS is conducted on a
quarterly basis in accordance with Council Regulation (EEC) No. 577/98 of 9 March 1998.
For
details
please
refer
to
the
following
link
on
the
Eurostat
website:
http://europa.eu.int/newcronos/suite/info/notmeth/en/theme1/strind/emploi.htm
Social cohesion
For
details
please
refer
to
the
following
link
on
the
Eurostat
website:
http://europa.eu.int/newcronos/suite/info/notmeth/en/theme1/strind/socohe.htm
Industry and agriculture
Industrial production volume indices.
Industrial production covers mining and quarrying, manufacturing
and electricity, gas, steam and water supply (according to the NACE Rev.1 Classification Sections C,D,E).
Index of Industrial Production covers total industrial production including estimates for enterprises with up
to 19 employees. Electricity, gas and water supply cover only energy production (NACE Rev. 1 classes:
4010, 4030).
Gross agricultural production volume indices.
The gross agricultural output has been calculated in 2000
prices.
Innovation and research
For
details
please
refer
to
the
following
link
to
the
Eurostat
website:
http://europa.eu.int/newcronos/suite/info/notmeth/en/theme1/strind/innore.htm
Environment
For
details
please
refer
to
the
following
link
to
the
Eurostat
website:
http://europa.eu.int/newcronos/suite/info/notmeth/en/theme1/strind/enviro.htm
Sources:
Total area, External trade, Demography, Standard of living, Infrastructure, Industry and agriculture:
National sources. Other indicators: Eurostat.
59