Estonia and Finland

17.11.2009

- Diplomatic Relations
- Visits of importance
- Co-operation
- Significant agreements
- Economic relations
- Cultural and educational relations

Diplomatic Relations

Finland recognised Estonia in 1920 and diplomatic relations were restored on 29 August 1991. Since October 2006 is Estonian Ambassador to Finland Merle Pajula. Finland's Ambassador to Estonia Jaakko Kalela assumed his duties in September 2005.

Estonia has five Honorary Consuls in Finland: Jyrki Ristiluoma in Oulu, Keijo Aarre Virtanen in Turku, Tuomo Marttila in Tampere, Kyösti Olavi Manninen in Kotka and Johan Anders Eriksson in Mariehamn.

The relations between Estonia and Finland are characterised by strong historic ties. The close contacts between the two countries extend to issues concerning politics, economics, culture and many other fields.

Estonia’s accession to the European Union and NATO along with the winding up of bilateral aid programmes has taken bilateral relations to a new level. In order to better plan future mutual co-operation between the two EU countries, ambassador Jaak Jõerüüt and former vice president of the Bank of Finland Esko Ollia compiled a report in 2003 that includes 43 proposals related to the environment, the economy, culture, science, and education. The majority of the recommendations of the report have been implemented and in June 2007 prime ministers Andrus Ansip and Matti Vanhanen decided that a new report concerning the future relations between Estonia and Finland be compiled. In 2008, a report entitled “The Co-operation Opportunities of Estonia and Finlad 2008” was compiled by the Vice President of the Nordic Investment Bank Gunnar Okk and the former Finnish ambassador Jaakko Blomberg, the purpose of which was to offer ideas, how Estonia and Finland could better cope with challenges ensuing from globalization and help each other to raise the competitive capacity of the countries. Both of the reports are available at: http://www.vm.ee/?q=et/node/199

Visits of importance (2000-2008)

Co-operation

Co-operation between Estonia and Finland in defence matters is regular and active. Close co-operation has taken place in the field of defence education and military training, as well as in connection with procurements and arms control. In the first half of the year 2008, Estonia and Finland (together with Sweden, Norway and Ireland) participated in the European Union’s Nordic Battle Group.

Since August 2008, the Military Attaché of the Republic of Estonia in Finland and Sweden is Peeter Läns, Lieutenant Colonel, residing in Helsinki. Since July 2007, the Military Attaché of the Republic of Finland in Estonia is Erkki Pekonen, Lieutenant Colonel.

Good, direct relations have been established between institutions under the jurisdiction of the Ministries of the Interior and Justice. Co-operation in the prevention of crime is of considerable importance to the police, border guards and customs services. The working group for fighting drug-related crimes, FINESTO, has been very successful, the operations of which have detected many illegal drug activities. The FINESTO mandate was recently expanded to include white collar crime. Finnish Ministry of Internal Affairs official Ari Lahtela is working as police expert in the Finnish Embassy in Tallinn.

Also, of great importance is co-operation in the realm of justice, in which the principal areas of co-operation are among others international legal assistance, criminal policy, the application of EU law, issues related to prisons, crime prevention and probation supervision. Since January 2009, Sirpa Väätäinen serves as the Liaison Prosecutor of the Republic of Finland in Tallinn. Since 2004, the four-part meetings of justice and internal affairs ministers have been arranged regularly.

The two countries have also developed extensive co-operation in environmental matters, where special attention is paid to ensuring the safety of the Baltic Sea environment. Estonia and Finland along with several other Baltic Sea States have made great efforts in having the Baltic Sea recognised as a Particularly Sensitive Sea Area (PSSA). In 2004, the trilateral (Estonia-Finland-Russia) Gulf of Finland ship Reporting System GOFREP was taken into use.

Estonia and Finland have developed their close co-operation further through participation in different international organisations, which have supplemented their close bilateral relations.

Significant agreements

Treaties between the two countries have been developed extensively. As of 1 May 2004, the economic relations are governed by the regulations of the EU’s internal market.

Among others the following agreements are in force between Estonia and Finland:

1. Agreement on Spiritual Co-operation (came into force 5 Feb 1992);
2. Agreement on Environmental Protection Co-operation (came into force 2 Mar 1992);
3. Agreement on the Promotion and Protection of Investments (came into force 3 Dec 1992);
4. Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital (came into force 30 Dec 1993);
5. Agreement on Co-operation in Air Defence (came into force 14 Sep 1994);
6. Agreement on Co-operation in Combating Marine Pollution (came into force 28 May 1995);
7. Agreement on Co-operation in Combating Crime (came into force 12 Oct 1995);
8. Agreement on Mutual Assistance in the Event of Disasters (came into force 31 Jul 1996);
9. Agreement Regarding the Readmission of Persons Whose Entry or Residence is Illegal(came into force 3 Oct 1996);
10. Agreement Concerning Co-operation in Respect of Maritime and Aeronautical Search and Rescue (came into force 1 May 1999);
11. Agreement on Environmental Impact Assessment in a Transboundary Context (came into force 6 Jun 2002);
12. Agreement on Joint Implementation Projects for the Reduction of Greenhouse Gas Concentrations (came into force 19 Jan 2004).
13. Agreement on the Transmission of the Data of the Population Register (entered into force 1 Feb 2005)
14. Social Insurance Agreement (came into force 1 Nov 2006)

Economic relations

TRADE

*Pre and post 1 May 2004 data are incomparable. After accession to the EU, the import is calculated on the basis of the sending country, earlier this was based on the country of origin.

Finland is perennially Estonia's largest trade partner.

In 2008, total trade with Finland equalled 3.1 billion EUR, of which 50.1% or 1.55 billion EUR was exports and 49.9% or 1.54 billion EUR was imports. Finland’s share in Estonia’s foreign trade was 16.0%.
In Estonian-Finnish trade, positive developments are expected to take place in the future as well. A great many Finnish businesses are continuing to transfer their production activities to Estonia or widen existing facilities in Estonia. This will contribute to the growth of trade volumes.

Major export articles in 2008:

• Machinery and equipment - 29.1%
• Metals and metal products - 12.6%
• Other manufactured goods - 10.1%
• Wood and wood products - 10.0%

Major import articles in 2008:

• Machinery and equipment - 29.6%
• Metals and metal products - 16%
• Means of transport - 7.7%
• Chemical products - 6.5%

All economic figures originate from the Statistical Office of Estonia

INVESTMENTS

As of September 30th 2008, direct investments made to Estonia by Finnish investors amounted to 2.9 billion euros, i.e., 24.7% of all foreign investments to Estonia. The largest investments of Finnish companies are associated with the sectors of commerce, industry, telecommunications, building and real estate, and financial intermediation. As at September 30th 2008, direct investments made from Estonia to Finland amounted to 223 million euros.

FINNISH-ESTONIAN TRADE ASSOTIATION

The Finnish-Estonian Trade Association (SEKY), established in 1990, comprises Finnish enterprises active in Estonia and enterprises potentially interested in Estonia. There are 170 members.
The main purpose of SEKY is to establish contacts and to improve relations between Estonian and Finnish businesses. A priority of the SEKY is to attract a more active participation of Estonian firms in the association. A number of Estonian politicians and economic figures have presented at SEKY’s annual meetings. Every year SEKY organises a trip for its members to a county in Estonia, so that they can become acquainted with businesses there.

FINNISH-ESTONIAN CHAMBER OF COMMERCE

The Finnish-Estonian Chamber of Commerce (FECC, www.fecc.ee) unites Finnish entrepreneurs operating in Estonia; the organisation has approx. 120 members and its objective is to mediate business contacts and provide the members with information about Estonian economy.

TOURISM

Finland is Estonia's most important tourism target market. In 2008, of all foreign tourists who used accommodation services in Estonia, 50.8 % (728,181) were from Finland (growth per year 2.9%). In 2008, the number of overnight stays of Finnish tourists amounted to 1.42 million, i.e., 48.3% of all overnight stays of foreign tourists. The importance of Finland to Estonia as a tourism target market becomes apparent from the fact that the money spent by Finnish tourists in Estonia in 2007 was comparable to the entire share of Estonia’s agricultural production in the GNP (i.e., approx. 4 %).

The Enterprise Estonia regularly participates in the Helsinki tourist fair Matka.

In May 2002, the Helsinki office of the Enterprise Estonia was opened to deal primarily with tourism-related matters along with investment and export promotion. The Enterprise Estonia representative in Finland is Toomas Tärk.

Cultural and educational relations

Cultural relations between Estonia and Finland are traditionally close. On December 1st 2007, the 70th anniversary of the conclusion of Estonian-Finnish Mental Co-operation Convention was celebrated. In connection with this, a seminar took place in Helsinki on November 9th 2007, with participation by the Ministers of Culture of both countries. On November 22nd 2007, a similar festive seminar was held in Tallinn; the speakers included President Toomas Hendrik Ilves and Paavo Lipponen.

Tallinn and Turku have been chosen as the European Capitals of Culture in 2011. The Mayors of Tallinn and Turku concluded a Memorandum of Co-operation establishing the principles of co-operation between the two cities.

From March 8th to March 9th 2009, a large-scale information event Welcome to Estonia took place at the Senate Square (Senatintori) in Helsinki. The event was opened by Juhan Parts, Minister of Economic Affairs and Communications of the Republic of Estonia, and Jussi Pajunen, Mayor of Helsinki. The event included comprehensive tourism-related exhibitions and a cultural programme.

From November 22nd to November 23rd, the annual event Mardilaat (St. Martin’s Day Fair) took place in Helsinki for the 25th time; over the years, it has grown into one of the largest events promoting Estonia in Finland. Over 14,000 visitors attended the fair, including Tarja Halonen, President of Finland.

On February 18th 2006, the new building of the Art Museum of Estonia (KUMU) designed by Finnish architect Pekka Vapaavuori was opened.

The R&D-related co-operation between institutes of higher education and scientific research establishments is increasing gradually. The second joint session of the Estonian Science and Development Council and the Finnish Science and Technology Development Council took place on 15 April 2008 in Tallinn (the first occurred on 26 May 2004 in Helsinki). The main focus of the session was on opportunities for Estonia-Finland co-operation and discussing joint initiatives for advancing science and technology. The session was led by the prime ministers of the two nations, who expressed the conviction that the success of the entire Baltic Sea region in the global economy in the future depends on development of knowledge-based products and services. For this reason, co-operation is very important for both nations. At the meeting, the universities, research institutions, financing organisations and businesses of both countries were called upon to utilise their potential by increasing their co-operation. The nations were also encouraged to increase co-operation between their science and development councils and co-ordinate policy development in the countries so that they support a common competitiveness level. A concrete initiative was brought up by the council members to jointly develop and plan a science and development infrastructure, to co-operate in the field of scientific data processing, and to exchange experiences between companies that finance science and development. Estonia and Finland are also planning a joint science doctorate programme and joint investments for the procuring of research equipment. Other topics discussed at the session were matters related to the new Estonia-Finland co-operation report, and the decision to have joint session of the science and development councils regularly, either every year of every other year.

As regards co-operation in the field of education, arrangement of the possibilities for acquisition of basic education in Estonian in Finland and for acquisition of education in Finnish in Estonia is considered important. In Helsinki, two schools offer instruction in Estonian, while in Estonia the Tallinn Finnish School and Tartu Catholic School offer instruction in Finnish. An important milestone of the education-related co-operation was the establishment of professorship of Finnish language and cultural studies at the University of Tartu in September 2006. Since 1993, Estonian and Finnish Ministries of Education have co-operated in the field of youth work.