Ministry of Justice proposes much higher fines for financial violations
The Ministry of Justice has tabled a new law which would allow for more effective responses, including much larger fines, to financial, competition and data protection law violations and would bring domestic law more in line with European Union law.
The law would provide for much larger fines, potentially into tens of millions of euros rather than the present tens or hundreds of thousands under Estonian law, and would also divert such cases to administrative rather than criminal courts.
Justice minister Raivo Aeg (Isamaa) says that the main aim of the proposed law, which should it come to fruition would likely enter into force in the first quarter of 2021, is to fufill obligations arising from EU law, which in turn would provide for effective, proportionate and dissuasive fines for violations in certain areas.
The proposed law would also maintain a flexible supervision procedure in accordance with administration best practices and ensures the protection of the fundamental rights of persons subject to proceedings in every way.
Violations covered by the proposed law have up to now been processed mostly as misdemeanor offenses, with a maximum fine of €400,000. However, EU legislation allows for fines amounting to tens of millions of euros, in areas where large volumes of money have been involved, meaning fines should be in proportion, Aeg said.
Simplify proceedings and divert them to administrative courts
The law would also simplify proceedings and help to remove a bottleneck which has caused problems in prosecuting legal persons.
"These are areas where large sums of money flow and where penalties must be commensurate with the size of the infringement," said Raivo Aeg.
"Whereas in Finland, for example, the highest known administrative fine for an abuse of a dominant position has been €70 million, in Estonia the largest fine imposed in a misdemeanor proceeding for an equivalent violation has been €16,000," Aeg said.
"The procedure leading to a potential financial penalty must be effective, in order to enable the application of effective, proportionate and dissuasive fines. Taking into account both the relevant research from the University of Tartu, and the views of stakeholders, we are of the opinion that it would be most effective in Estonia to implement this through administrative proceedings, which are supplemented by the specifics of criminal proceedings," Aeg continued.
The change would also ensure the observance of the fundamental rights of persons subject to proceedings, in line with the Estonian constitution, the Charter of Fundamental Rights of the European Union and the European Convention on Human Rights.
The draft is expected to be sent for approval and opinion this summer, and, should it pass into law, would likely come into effect in the first quarter of 2021.
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Editor: Andrew Whyte