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Description
of content:
1. The draft amendment regulates the classification of weapons in the
Weapons Act and introduces new terms (service weapon, military weapon,
training weapon). In addition, the object and purpose of the Weapons Act is
modified. The Act has hitherto mostly regulated the handling and supervision
of weapons in civil use. The amendment extends the scope of the Weapons Act
to include the handling of any weapons.
2. The draft amendment changes the definition of a 'firearm'. A
firearm is any weapon or device intended or modifiable for expelling a
directed projectile by means of the gas pressure resulting from gunpowder
gases, combustion gases or explosive gases. The definition has been carried
over from Article 1(1) of Directive (EU) 2017/853, although the wording has
been amended and supplemented for the purposes of this draft Act. In general
this Directive does not regulate weapons in military use and is limited to
weapons in civil use, which does not usually include military weapons. The
existing definition must also be changed as gun powder is not the only method
used in military weapons to expel a cartridge, shell or missile. The
definition must be expanded to include military weapons which do not use gun
powder to expel a projectile. Furthermore, the change is required in order to
avoid the use of two identical terms with different meanings in the same Act.
3. The draft act supplements the list of circumstances precluding the
granting of an acquisition permit or weapons permit to a natural person and
the circumstances under which an issuer of permits may refuse to grant an
acquisition permit or a weapons permit to a legal person. The objective is to
guarantee public order and national security.
4. Regulations for handling military weapons, ammunition and
munitions make up the bulk of the draft amendment. Firstly, military weapons
are classified as handguns, rocket systems, heavy weapons and other weapons
not included under firearms. Moreover, the draft amendment defines the term
'munitions'. Munitions, with the exception of ammunition, means devices or
materials with a military purpose, containing explosives, pyrotechnical
substances, igniting substances or other chemical substances with ignition or
explosive capacity, which can be used or modified to damage or destroy enemy
troops or battle technology, for battlefield illumination, for smokescreens
or for signalling. Examples of munitions are mines, grenades not launched
from a firearm (i.e. a mortar or grenade launcher), pyrotechnical devices,
smoke grenades, signal flares, illumination flares, etc. Munitions include
ammunition, but for the purposes of this Act, ammunition and munitions are
treated separately, as military and civilian weapons can use ammunition of
the same calibre and storage or transportation requirements for ammunition
can differ from those of munitions. Mines and grenades launched from firearms
are also classified as ammunition. The term 'ammunition' has not been defined
in the Weapons Act and this draft amendment does not define it.
5. The draft amendment specifies the mandatory requirements for the
owners, managers, responsible persons and employees of businesses handling
military weapons, ammunition for military weapons and munitions. In
comparison to regular businesses, several restrictions apply. Inter alia, the
draft amendment limits bankruptcy and enforcement proceedings. One of the
fundamental principles of EU contract law is the freedom of establishment,
which inter alia means, that a person (both physical and legal) is free to do
business and can freely choose the form of business. Article 16 of the
Charter of Fundamental Rights of the EU also clearly guarantees the freedom
to conduct a business in accordance with Union law and national laws and
practices. The Treaty on the Functioning of the European Union (hereinafter
TFEU) places several obligations on Estonia, including the absence of any
legal measures which may obstruct the free movement of persons, services and
capital within the EU internal market. However, these prohibitions are not
absolute. According to Article 36, a Member State may impose prohibitions or
restrictions on export, import and transit, if this is required for assuring
the state's public policy or public security. Such prohibitions or
restrictions shall not, however, constitute a means of arbitrary
discrimination or a disguised restriction on trade between Member States.
Article 52(1) allows for special treatment of foreign nationals, on the right
of establishment, on grounds of public policy, public security or public
health. Article 65(1) of the TFEU permits restrictions or prohibitions on the
free movement of capital and restrictions on payments between Member States
and third countries, in the interest of public policy or security. In
addition, Article 346(1)(b) allows any Member State to take such measures as
it considers necessary for the protection of the essential interests of its
security which relate to the production of or trade in arms, munitions and
war material. Such measures may not adversely affect the conditions of
competition in the EU internal market regarding products which are not intended
for specifically military purposes. Under the amended draft act, private
legal persons have the right to handle military weapons and their essential
parts, ammunition and munitions. The primary objective of this change is to
give Estonian businesses the chance to compete with other Member State's
businesses in intra-EU procurements (this is not currently possible, as no
authorisation exists for the relevant field). Granting this right does not
have an adverse effect on the handling of weapons and ammunition for civil
use by private legal persons, as the relevant regulations are not amended
(both will exist in parallel). The amended Act specifies the requirements for
business owners, management (members of the board and supervisory board),
responsible persons (e.g. engineers) and employees with access to the
business's territory or data, or to persons who can in any other way
influence the businesses decisions, safety or security. Such requirements
have been based on evaluated security risks, experience in Estonia and other
countries. Significant security risks have been determined in individuals'
characteristics or activities, for which restrictions or prohibitions have
been established by the draft legislation. In summary, the TFEU provides for
exceptions which allow the Member States to restrict the defence industry, as
it is closely connected to national security and public policy. This means
that the draft amendment complies with EU law and does not impact business in
other fields.
6. The draft amendment specifies exceptions for obtaining stocks in a
business handling military weapons and their ammunition or munitions:
* Requirements for persons acquiring or
having a qualifying holding;
* Requirements for notification of
obtaining stocks or holdings;
* Requirements for
acquisition of a qualifying holding and grounds for prohibiting such
acquisitions.
7. The draft amendment specifies exceptions in cases where a business
handling military weapons, ammunition and munitions defaults. As any business
handling military weapons and their ammunition or munitions without the
required security measures poses a significant national security risk, it is
essential that these measures also function in case the business defaults. It
is not significant if the business's payment difficulties are temporary or
permanent in nature and security measures must always be functional, as the
business's warehouses may hold military weapons and their essential parts or
ammunition, munitions or materials related to their manufacture (explosives,
fuses, etc.). It is therefore essential for the management of a business
handling military weapons, ammunition or munitions to notify the issuer of
authorisations of any payment difficulties, whether they are temporary or
permanent in nature. This notification shall also include a plan for assuring
future compliance with the requirements specified in this Act. The latter is
essential for the issuer of authorisations to be aware of the business's
plans. It is also important so that the issuer of authorisations can provide
recommendations for the business and the business is prepared to implement
relevant security measures when necessary.
The draft
amendment specifies some significant exceptions to actions taken by the
assignee in bankruptcy. Most significantly, the assignee in bankruptcy shall
ensure that any military weapons, ammunition, munitions and essential parts
of these in the insolvency estate are stored as required and under conditions
specified by the amended Act. The objective is to ensure national security,
general safety and the maintenance of assets. The second significant
requirement specifies that an assignee in bankruptcy may exclusively sell
military weapons and ammunition or munitions from the insolvency estate to
persons who are legally permitted to obtain, hold and possess military
weapons, ammunition or munitions. Likewise, exceptions are specified for the
transfer of an insolvency estate. Military weapons, ammunition, munitions or
their essential parts and components can, with the permission of the issuer
of authorisations and the Strategic Goods Commission, only be transferred to
the country's armed forces or other businesses with a permit to handle such
products. If the transfer is not accomplished within the set term (six months),
the military weapons and their essential parts, ammunition, munitions and
significant parts must be disposed of in accordance with the specified
requirements. Secondly, an exception is established for transferring a
business's stock or shares to the business. In bankruptcy and enforcement
proceedings, stocks and shares can only be transferred to persons who meet
the requirements specified for persons acquiring and holding a qualifying
holding. Military weapons, military ammunition, munitions and their essential
parts shall not be impounded, sold or otherwise processed in enforcement
proceedings.
8. The draft amendment specifies requirements for businesses handling
military weapons, ammunition or munitions. These include requirements on the
business's form, management board location, management, responsible persons
and employees. The draft amendment also introduces mandatory liability
insurance.
A business
wishing to handle military weapons and their essential parts, ammunition or
munitions and essential parts shall be established as either a public limited
company or a private limited company. The business can also be established in
an EU Member State, Switzerland or any Contracting Party to the European
Economic Area Agreement, but must be established as a legal person equivalent
to a public limited company or a private limited company. The business must
have a share capital of at least EUR 25,000, which must have been paid.
The business
and the business's management board shall be in Estonia and this must also be
stated in the business's association agreement or governing charter. The
objective of these requirements is to enhance national supervision over the
activities of the management and supervisory board. It should be noted that
no restrictions are established for the residence and nationality of members
of the board.
Requirements
are specified for the business's management. Management includes members of
the management and supervisory board, procurators and any other persons
regularly fulfilling tasks usually assigned to members of the board. In
principle, this means that the business's management cannot have been
punished for major offences listed in the draft amendment. In other words,
the business's management must have an impeccable reputation. Additional
requirements are specified for the business's employees. Employees are all
physical persons not considered management or responsible person(s). Inter
alia, employees include the business's accountant, secretary and all other
office workers, also any service providers (e.g. outsourced accounting,
cleaning or security services) or subcontractors with access to the
business's territory or data (inventory, accounting, etc.). The business's
employee, subcontractor's employee or an employee of another business
providing services to the business and having access to the business's
territory may not be:
1) Punished in a criminal or misdemeanour
procedure for a crime in the first degree, criminal offence against the state
or any offence committed by using explosives, pyrotechnical products,
ammunition or a firearm, and who's criminal record has not been deleted from
the criminal records database as specified in the Criminal Records Database
Act;
2) A fugitive, a suspected or accused person
of any criminal offences specified in point 1;
3) A person who is known or assumed to be
part of a criminal or terrorist organisation or to have committed or planned
to commit a terrorist act or is related to funding or supporting terrorist
activity or money laundering.
In addition,
health requirements are specified for the business's employees. The
business's liability insurance shall cover any non-contractual and unlawful
damages caused to third persons.
9. The draft amendment specifies a separate regulation for the
verification of the business management and employees' suitability and
plausibility check (also known as a background check) and the permitted
methods for this check. Additionally, while processing the authorisation
application, any persons having dominant influence over the legal person's
management are determined (the existence of such persons and their compliance
with the same requirements as specified for the business's management).
The Police
and Border Guard Board shall conduct a background check to determine the
fitness of a person to obtain qualifying holdings, manage the business or
work for a business handling military weapons, ammunition or munitions. A
background check is conducted to determine the conformity of the following:
* Persons holding qualifying holdings;
* Management of the business;
* Employees, subcontractors and service
providers of the business and;
* Responsible persons of the business.
10. The draft amendment specifies a list of activities that require an
authorisation to handle military weapons, ammunition or munitions, the
conditions for issuing a licence, exceptions for processing the authorisation
application and grounds for refusal to grant an authorisation.
An
authorisation is required to operate in the following fields:
* Production of a military weapon, an
essential part of a military weapon or munitions not containing explosives;
* Repairs or modifications to military
weapons as a service;
* Transport of a military weapon,
ammunition or munitions;
* Production of a vehicle, water craft,
aircraft or other product used to install a military weapon;
* Provision of services to store ammunition
or munitions;
* Production of munitions containing
ammunition or explosives.
Authorisations
are issued for up to five years. Authorisations shall not be transferable,
and the use thereof by another business or person shall be prohibited. An
Estonian authorisation is also required for businesses already holding an
equivalent authorisation in another EU Member State. Authorisation is also
required for temporary activities.
For the
handling of military weapons, authorisation is issued by the Police and
Border Guard Board. For the handling of ammunition or munitions,
authorisation is issued by the Technical Surveillance Authority. The issuing
of authorisations is coordinated by a commission established at the Police
and Border Guard Board. The applicant shall pay a state fee for processing an
authorisation application.
11. In addition to an authorisation, the business requires an
operating licence to handle military weapons, ammunition or munitions. The
draft amendment specifies the requirements for a specific place of operation
and regulations for operating licence applications and grants.
Whereas a
business's authorisation permits the handling of military weapons, ammunition
or munitions and is primarily linked to the business's employees or owners,
an operating licence permits the handling of military weapons, ammunition or
munitions in a specific location and is linked to a specific place of
operation. The place of operation shall be selected on the basis of safety
requirements and security considerations. An operating licence is granted to
a business handling military weapons, if:
* The place of operation and operational
conditions meet the requirements specified by law;
* The implemented safety measures ensure
the safety and security of persons and environment;
* The implemented security measures ensure
public policy, constitutional order and security;
* The place of operation does not increase
risks to national security;
* The use of a building or parts thereof
meets the building's intended use.
Operating
licences for a place of operation used for military weapons are granted by
the Police and Border Guard Board. Operating licences for a place of operation
used for storage or production services including ammunition or munitions are
granted by the Technical Surveillance Authority. The operating licence and
authorisation enter into force at the same time.
12. The draft amendment specifies the permitted methods for handling
military weapons, ammunition and munitions as follows:
* Who can use which method of handling,
from acquisition to disposal;
* Prohibitions, e.g. the prohibition to
restore military weapons rendered incapable of firing to working order;
* The minister responsible for the area
(primarily the Minister of Defence) is empowered to establish the
requirements for each method of handling.
13. The draft amendment changes the Strategic Goods Act in three
principal categories: changes linked to demilitarisation, changes linked to
handling military goods (including import and export of military goods to and
from Estonia) and changes linked to goods subject to international sanctions.
The most
significant changes add regulations for the demilitarisation of military
goods. The new regulations specify the military goods subject to
demilitarisation, including goods that can be imported into Estonia after
demilitarisation, the location for legally required inspections of allegedly
demilitarised military goods, the authority determining conformance and
issuing a conformity certificate. The Defence Forces of Estonia are
responsible for the latter.
The second
significant change expands the authority of the Strategic Goods Commission so
that the commission can discuss and decide on issues related to the transport
of goods subject to international sanctions and associated services and
transactions. These powers currently lie with the Ministry of Finance, but
the amended Act transfers them to the Strategic Goods Commission.
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