amendments act of weapons act strategic good act explosives act and other acts 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. 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. 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. regulations for handling military weapons ammunition and munitions make u 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. 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 states 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 states 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 businesss 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. 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. 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 businesss payment difficulties are temporary or permanent in nature and security measures must always be functional as the businesss 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 businesss 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 countrys 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 businesss 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. the draft amendment specifies requirements for businesses handling military weapons ammunition or munitions. these include requirements on the businesss 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 businesss management board shall be in estonia and this must also be stated in the businesss 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 businesss 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 businesss management cannot have been punished for major offences listed in the draft amendment. in other words the businesss management must have an impeccable reputation. additional requirements are specified for the businesss employees. employees are all physical persons not considered management or responsible persons. inter alia employees include the businesss 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 businesss territory or data inventory accounting etc. . the businesss employee subcontractors employee or an employee of another business providing services to the business and having access to the businesss 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 whos 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 businesss employees. the businesss liability insurance shall cover any non-contractual and unlawful damages caused to third persons. 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 persons management are determined the existence of such persons and their compliance with the same requirements as specified for the businesss 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. 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 u 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. 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 businesss authorisation permits the handling of military weapons ammunition or munitions and is primarily linked to the businesss 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 buildings 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. 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. 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.