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State to start screening impact of foreign investments on Estonia’s economic security

Estonian news, EWEA news, EWPA news, EWPA's blog, International News, Tuuleenergia blogi - Tuul June 2, 2020

Estonian Minister of Economic Affairs and Infrastructure Taavi Aas has sent to a round of approvals legislative intent regarding a bill on foreign investment screening, whereby the background of foreign investments that are critical from the perspective of Estonia’s economic security will be probed in greater detail in the future.

“Estonia is a small open economy based on export and reliable foreign investments. The state must guarantee in strategic areas that new capital should not jeopardize national security and vital services like energy, transport, medical equipment, communications and information technology,” Aas said in a press release. 

The minister said that foreign investment screenings are particularly important in a situation where many businesses are struggling and in need of additional capital or are being sold altogether due to the pandemic.

“Limiting foreign investments is definitely not the goal here, but the transparency of owners of vital business sectors must be ensured and options for risk mitigation must be found when problems emerge,” he said.

Estonia currently lacks legal regulation enabling to request from foreign investors or businesses receiving foreign investments information that would help analyze the impact of investments on Estonia’ economic security, public order and foreign policy more broadly.

“These responsibilities are at present scattered between various pieces of legislation and institutions, and exchange of information between them is inadequate. The purpose of the bill is to create an organized system so that investors would be informed about the areas, information, time frame and activities related to screening and the authorities involved therein,” Aas said, adding that the procedure will thus also become clearer for entrepreneurs.

Pursuant to the legislative intent of the bill, administrative burden for obtaining the information required for screening must be kept to a minimum by making full use of existing databases.

“Recent examples have seen important investments suspended for a long time, such as [off-shore wind farm development] Saare Wind Energy. To prevent such situations, we aim for screening to be conducted without needless inconvenience and bureaucracy and as quickly and transparently as possible,” the minister said.

Procedures and details, such as the size of investments, participation and time frame, will be determined during the development of the bill.

Most member states of the European Union have likewise begun introducing foreign investment screening in addition to those who have already adopted the mechanism.

The bill will be submitted to the government in late 2020.

Tallinn newsroom, +372 610 8821, majandus@bns.ee

Baltic News Service

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