Estonia and Finland

Bilateral relations

- Visits of importance
- Co-operation
- Significant agreements
- Economic relations
- Cultural co-operation

Finland recognised Estonia in 1920 and diplomatic relations were restored on 29 August 1991. Since August 2010 the Estonian Ambassador to Finland is Mart Tarmak. Finland's Ambassador to Estonia Aleksi Härkönen assumed his duties in September 2010.

Estonia has seven honorary consulates functioning in Finland: in Oulu, Turku, Kotka, the Åland Islands, Vaasa, Kuopio, and Rovaniemi.

Finland has two honorary consulates in Estonia: in Tartu and in Pärnu.

Visits

Co-operation

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 took 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 included 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 Finland 2008” was compiled by Vice President of the Nordic Investment Bank Gunnar Okk and former Finnish ambassador Jaakko Blomberg, the purpose of which was to offer ideas as to how Estonia and Finland could better cope with challenges ensuing from globalisation 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

Defence co-operation

Co-operation between Estonia and Finland in defence matters is active and includes regularly occurring political and defence consultations as well as shared practical endeavours. Co-operation in the area of cyber security is growing – Finland participates in the work of the NATO Cyber Defence Centre in Estonia on a project basis. The Estonian Embassy in Helsinki was the NATO Contact Embassy in Finland from 2011-2012. 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.

Co-operation in interior and justice issues

Good, direct relations have been established between institutions under the jurisdiction of the ministries of the interior. Co-operation in the prevention of crime is of considerable importance to the police, border guards and customs services. The co-operation of the Estonia-Finland anti-narcotics working group has been very successful. A police co-operation plan between the Estonian and Finnish police has been concluded for the years 2011-2014.

Close and effective co-operation also takes place in the justice sector. Finnish liaison prosecutor Sirpa Väätäinen works in the Estonian Public Prosecutor’s Office and there are direct contacts between detention facilities in Estonia and Finland. Co-operation is also good when it comes to international legal assistance – as of 6 June 2009 Estonia unilaterally recognises Finland’s business prohibitions. On 1 July 2012 a legal assistance agreement signed by prime ministers Ansip and Katainen came into effect, which states that documents from the countries’ population registries will be reciprocally recognised without an apostille. The agreement will significantly reduce the expenses and bureaucracy Estonian and Finnish citizens used to face.

Environmental co-operation

Environmental co-operation between the two countries is extensive, and special attention is paid to ensuring the safety of the Baltic Sea environment. Estonia and Finland along with the other Baltic Sea states have made great efforts in having the Baltic Sea recognised as a Particularly Sensitive Sea Area (PSSA). In the name of improving the situation of the Baltic Sea environment, co-operation is taking place within the framework of HELCOM and the International Maritime Organisation (IMO). The year 2014 has been named the Gulf of Finland Year, during which the environmental ministries of Estonia, Finland and Russia will intensify their co-operation to improve the Baltic Sea watershed. In April 2013 the environmentally-themed meeting of the Baltic Sea states called the Baltic Sea Action Summit, which was created at the initiative of Finland and first convened in 2010, had another meeting in St. Petersburg.

Educational and research co-operation

One condition that sets the stage for close bilateral educational co-operation is an adequate and thorough knowledge of each other’s history, and the importance of this has been confirmed by, among others, the presidents of both countries. The education ministries of both Estonia and Finland have expressed their readiness to advance reciprocal language instruction on all educational levels. Considering the growing Estonian community in Finland, the issue of Estonian-language education is becoming more and more relevant. In 2008 a bilingual class for Estonian children was opened at Latokartano School in Helsinki. As of the fall of 2009 there were already five Estonian-Finnish classes in Helsinki. It is possible to study Estonian in many Finnish universities (Helsinki, Turku, Tampere, and Oulu, and in the University of Eastern Finland in Joensuu). The spread of Estonian-language education has been helped greatly by the Finnish Estonian-Language Education Society founded in 2007, which does work to help open more Estonian-language kindergartens.  Since 2009 a successful project has been underway within the framework of which Estonian teachers and cultural figures have given Estonia-themed lessons at various Finnish schools. Finnish is taught in a few dozen Estonian high schools as an elective subject. In vocational schools, Finnish language classes are primarily found in the service curriculums.

A big step was made when the professorate of Finnish language and culture was opened at Tartu University in September 2006. It is possible to study Finnish language and culture at Tartu and Tallinn universities. Direct contacts exist between Estonian and Finnish educational institutions and co-operation is done in various areas. Altogether there are close over 150 ongoing joint research and study projects between Estonia and Finland. On 19 November 2012 a joint session of the Estonia-Finland Research and Development Council took place for the third time in Helsinki.

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, economic relations are governed by the regulations of the EU’s internal market. There are 32 bilateral agreements between Estonia and Finland, of which the following are the most significant:

• Agreement Between the Republic of Estonia and Republic of Finland Abolishing the Requirement to Legalise Population Registry Documents (came into force 1 July 2012)
• Agreement Between the Government of the Republic of Estonia and the Government of the Republic of Finland on the Mutual Protection of Confidential Information (came into force 5 June 2007)
• Agreement Between the Government of the Republic of Estonia and the Government of the Republic of Finland on the Reciprocal Holding of Stocks of Crude Oil and Petroleum Products (came into force 23 December 2006)
• Social Insurance Agreement (came into force 1 Nov 2006)
• Agreement on Joint Implementation Projects for the Reduction of Greenhouse Gas Concentrations (came into force 19 Jan 2004)
• Agreement on Environmental Impact Assessment in a Transboundary Context (came into force 6 Jun 2002);
• Agreement Regarding the Readmission of Persons Whose Entry or Residence is Illegal(came into force 3 Oct 1996)
• 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)
• Agreement on the Promotion and Protection of Investments (came into force 3 Dec 1992) 

Economic relations

All the major economic agreements have been concluded between Estonia and Finland, including agreements for the facilitation and protection of investments, economic co-operation and aid, avoidance of double taxation and prevention of fiscal evasion, an aviation agreement, and an agreement for reciprocal customs aid and road transport. As of 1 May 2004 Estonia and Finland’s bilateral economic relations are regulated by the rules of the EU internal market.

TRADE

Finland has long been Estonia's most important economic and trade partner.

In 2012 Finland held first place among Estonia’s trade partners with 14.5% of Estonia’s total trade. Finland is Estonia’s biggest import partner (14.5% of total imports) and second-biggest export partner (14.6% of all exports). For the first time since 2008, the trade balance with Finland was negative in 2012. Trade with Finland is dominated in both imports and exports by machinery and equipment.

Estonian-Finnish trade 2006-2012 (in millions EUR)

All economic figures originate from the Statistical Office of Estonia

INVESTMENTS AND BUSINESS

Finland is the second-biggest foreign investor in Estonia after Sweden. At the end of 2012 direct investments from Finland to Estonia totalled 3.3 billion euros (23.3% of all foreign investments). Of those investments, 24.8% went to the real estate sector, 23.9% to the manufacturing industry, and 17.2 to wholesale and retail trade. Estonia’s investments in Finland made up 5.5% of all investments, making Finland Estonia’s fourth destination for investments after Cyprus, Lithuania and Latvia. Of Estonian investments in Finland, 37% went to the financial and insurance sector.  There are at least 4 700 enterprises in Estonia with Finnish participation – in 2011 Finnish entrepreneurs’ interest in expanding to Estonia grew significantly and over 500 new companies were established. There are Finns on the boards of nearly 18 000 Estonian companies. Estonian companies’ activities in Finland are more modest. There are over 1 500 Estonian companies registered in Finland and 45 Estonian companies have branches in Finland. There are Estonian citizens on the boards of close to 5 000 Finnish business groups.

Estonian and Finnish businesses also engage in close co-operation. Estonia businesses are largely tied to Finnish businesses through contractor work and intermediate commercial transactions, but there are also successful examples of more complicated partnerships in many fields, including energy, information technology, ship- building and mechanical engineering, legal aid, design and product development, and construction

g and mechanical engineering, legal aid, design and product development, and construction

Enterprise Estonia, trade associations, and Chamber of Commerce

As of 2002 there is a representation of Enterprise Estonia functioning in Helsinki. The goal of its activities is to introduce possibilities in Estonia to Finnish investors and help Estonian companies that are entering the Finnish market.

The Finnish-Estonian Trade Association (SEKY, www.seky.fi), established in 1990, comprises Finnish enterprises active in Estonia and enterprises potentially interested in Estonia. The main purpose of SEKY is to establish business contacts and to improve relations between Estonian and Finnish businesses. In Estonia the Finnish-Estonian Chamber of Commerce (FECC, www.fecc.ee) has similar goals – to mediate business contacts and provide its members with information about the Estonian economy.

In the fall of 2007 the Estonian Embassy, the Finnish-Estonian Chamber of Commerce, Enterprise Estonia and local Finnish chambers of commerce co-operated to start up a series of seminars introducing the Estonian economy entitled "Verkotu Viroon". Seminars have been carried out in Tampere, Turku, Oulu, Kotka, and Helsinki; there are plans to continue holding events in other cities.

TOURISM

Finland is Estonia's most important tourism target market. The number of Finnish tourists in Estonia grew significantly after Estonia joined the European Union in 2004, but in the years 2005-2007 the number decreased by about 5-6% per year. In 2008 and 2009 the number of Finnish tourists visiting Estonia gradually grew again, and in 2010 the number once again reached record levels (same as 2004). According to data from all of 2012, there were 829 225 Finnish tourists received at accommodation establishments that year and a total of 1.65 million nights were spent in Estonia (making up 43.2% of all the nights spent by foreign tourists in accommodation establishments). Compared with 2011, in 2012 the number of Finns accommodated dropped by 1.4% and the number of nights by 1.5%.

All economic data from Statistics Estonia and the Bank of Estonia

Cultural co-operation

Estonia-Finland cultural ties are extremely close - the number and quality of reciprocal events introducing Estonian and Finnish culture are substantial.

The idea came about to establish an Estonian House in Helsinki to support the Estonian population in Finland and entrepreneurship in Finland. The Estonian House (Viro-keskus) opened in 2010 is a “new generation” Estonian House, which brings together factions that represent Estonia (Estonian Institute, Tourism Development), that promote export and obtain investments (Enterprise Estonia), and that promote Estophilia and support the adjustment of newcomers (Tuglas Society) all under one roof. In Estonia the development of Finland-Estonia cultural and economic relations has since 1994 been overseen by the Finnish Institute, led by Riitta Heinämaa.

In 2012 Helsinki was the World Design Capital, and Estonians were involved in many projects during this year. On 1 December 2012 Estonia and Finland celebrated 75 years since they had concluded their first cultural co-operation agreement. From 14-17 June 2012 the third joint Estonian-Finnish dance festival was held, which was attended by the first couples of both Estonia and Finland.

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