INTERNATIONAL TRADE LAW

On November 13, 1999, Estonia became the 135th member of the World Trade Organization (WTO), successfully concluding an accession process that had lasted over five years.

In regards to free trade, Estonia has developed a well-earned reputation for being a Baltic “Hong Kong.” For several years the Estonian government had no law on tariffs, such that no goods could have any tariffs (taxes levied based on the import of goods) placed on them. This was extraordinary in that all of the members of the rich country group- the OECD - have at least some tariffs.

At the insistence of the European Union, Estonia now has a law regarding tariffs, which authorizes the levying of tariffs. Still, Estonia is one if the most open trading regimes in the world. Since January 2000, Estonia has imposed tariffs on certain agricultural products originating in certain third countries.

Currently, Estonia levies excise duty on tobacco, alcohol, fuel and motor vehicles. In addition, the mandatory 18% Value-Added Tax (VAT) must be paid upon the importation of goods. This is not actually a trade restriction though because Estonian retailers must charge the same VAT for goods whether imported or domestic.

In fact, Estonia may be faced with the burden of raising its trade restrictions further in order to become a member of the European Union in a few years’ time.


PRIVATISATION

Estonia’s program for privatisation of industry is now nearing completion. A large majority of the Estonian economy is now in private hands and almost 2/3 of the nation’s GDP comes from the private sector. This is remarkable considering that nearly the entire Estonian economy was owned by the Soviet government just over ten years ago.

Examples of successful privatisations include Estonian airlines and Estonian Gas.

During the year 2001, some of the last major privatisations received attention, however, there were stumbling blocks. An agreement was reached with NRG Energy for the acquisition of 49% of the Narva Power Stations, which generate 98-99% of Estonia’s electricity, but the deal fell through on technical grounds and deadlines for negotiation were not extended.
Privatisation of the state-owned railways has proved a difficult process and is still underway.

A handful of enterprises owned by municipalities and local governments remain to be privatised, but these account only for a small percentage of economic activity. One subject of consideration has been the Tallinn port.

Given that the vast majority of projects has been completed, the work of the Estonian Privatisation Agency wound up as of November 1, 2001. This function will be taken over by the Ministry of Finance.

Privatisation/restitution of land is still underway as well. As at February 2002, according to the National Land Board, 64.8% of the land in Estonia is duly recorded in the Land Register and has private title.

INTELLECTUAL PROPERTY RIGHTS

Estonian legislators have worked out an efficient system for the protection of intellectual property rights.

The State Patent Office was re-established on December 3, 1991 (it had ceased operation in 1940), and re-commenced operations on March 10, 1992. Information about the chronological order of legislation passed since is available on numerous web sites.

Estonia has also passed several international treaties. The same applies - information is available on web sites. Such as that of the Estonian Investment Agency - http//www.eia.ee

(To be continued)

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