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Who’s Behind the Curtain?

In today’s digital age, transparency and accountability are crucial aspects of financial transactions. As part of a broader effort to combat money laundering and terrorist financing, banks are required to identify and verify the beneficial owners of accounts.

What is a Beneficial Owner?

According to experts, a beneficial owner is an individual who exercises influence over a transaction or operation, holds control over shares or voting rights, or performs actions on behalf of someone else. In cases where it’s difficult to determine the beneficial owner, the highest executive body member may be considered as such.

Can Individuals Be Behind the Scenes?

Yes, individuals can be the beneficial owners of accounts if they’re not the actual account holders but have control over transactions performed on their behalf.

Riskier Customers

Non-residents are often viewed as higher-risk customers due to the challenges of verifying their identities and ensuring compliance with anti-money laundering regulations. Banks must devote extra attention to non-resident customers, particularly those from countries with inadequate measures in place to prevent financial crimes.

E-Residents: Can They Open a Bank Account?

E-residency allows individuals to authenticate their identities online, but banks may have stricter requirements for e- residents than for residents. Opening an account still depends on meeting the bank’s specific requirements.

Is Video Identification Secure Enough?

Authentication by information technology is considered equivalent to verifying identities in person. Banks use advanced software and database queries to verify customers’ identities, making it a secure process.

Transaction Limits: A Safety Net

Banks impose transaction limits as a precautionary measure to prevent unauthorized access to accounts. These limits help protect against potential losses if an account is compromised.

Who Has Access to Your Data?

Credit institutions are required by law to disclose customer data to specific authorities or individuals for legitimate purposes. Customer consent is necessary in cases where data is shared with non-authoritative parties.

Will Your Bank Cooperate with Law Enforcement?

Banks do not initiate requests to share customer data with the police, except in cases where authentication is performed through the Police and Border Guard Board’s database. However, banks are obligated to respond to inquiries from law enforcement agencies as part of their anti-money laundering efforts.

Data Retention: A Five-Year Rule

Under Estonia’s Money Laundering and Terrorist Financing Prevention Act, credit institutions must retain customer data for at least five years after the end of a business relationship. This ensures that financial transactions can be traced back in case of an investigation or audit.