A total of 36 lawmakers voted in favor of the bill, while 47 voted against. The bill was proposed by the country's opposition.
Estonia and Russia introduced a preferential visa regime in 2002 that provided for free annual visas to citizens included on lists drawn up by local authorities. The regime was annulled by Estonia, in line with EU regulations, on January 19.
The privileged visa regime applied to people who had relatives, property or other reasons to visit Russia or Estonia. Around 2,000 free visas and 6,000 privileged visas were issued for Estonian citizens per year.
Although the Schengen rules allow local governments to request visa-free crossings for people living up to 50 kilometers from the border, Estonian Interior Minister Juri Pihl said the authorities would not be able to ensure border security.
The minister said Estonia, which became an EU member in 2004, regarded the privileged border regime with Russia "with conservative cautiousness."
However, the Estonian Interior Ministry has devised a special program that would compensate once a year the cost of the 35 euro ($46.5) visa fee for those people who have lost out under the new rules.
