Estonia Cracks Down on Money Laundering with Comprehensive Prevention Act
Estonia has taken a significant step in combating money laundering and terrorist financing by implementing a robust framework aimed at preventing these illegal activities. The country’s overall policy, legislation, and coordination efforts in this area are led by the Ministry of Finance.
Key Organizations Involved in Combating Money Laundering
- Estonian Financial Intelligence Unit (FIU): An independent structural unit of the Estonian Police and Border Guard Board that analyzes and verifies information about suspected money laundering or terrorist financing, takes measures to preserve property when necessary, and forwards materials to relevant authorities upon detecting elements of a criminal offense.
- Other key organizations: The Prosecutor’s Office, Security Police, Tax and Customs Board, and courts in Estonia work together to identify criminals and establish legal liabilities as needed.
Strengthening Financial Sector Stability
The Financial Supervision Authority is responsible for ensuring stability, reliability, and transparency in Estonia’s financial sector. Given the direct connection between money laundering and terrorist financing and the financial sector’s stability, the Authority exercises close supervision in this area.
Promoting Cooperation and Coordination
- Governmental Committee: A governmental committee was established to fight against money laundering and terrorist financing, chaired by the Minister of Finance and including representatives from various ministries, the Tax and Customs Board, Prosecutor’s Office, police, Bank of Estonia, and Financial Supervision Authority.
- Advisory Committee of Market Participants: Provides a platform for entrepreneurs and other obligated persons to channel information, share concerns, and propose ideas for legislative development.
Citizen Involvement
Citizens play a crucial role in preventing money laundering, particularly those engaged in the financial sector. According to the Anti-Money Laundering and Terrorist Financing Prevention Act:
- Obligated persons: Banks, entrepreneurs providing financial services, organizers of games of chance, real estate transaction intermediaries, pawnbrokers, auditors, and consultants are required to report cash transactions exceeding €32,000 or an equivalent amount in another currency to the FIU.
- Entrepreneurs’ responsibilities: Entrepreneurs may request additional information when entering into long-term contracts or engaging in large-sum transactions. They must inform the FIU about all cash transactions exceeding €32,000 or an equivalent amount in another currency.
Registering Businesses
To provide their services in Estonia, entrepreneurs must register in the Register of Economic Activities. Financial institutions not subject to supervision by the Financial Supervision Authority must also register, as must service providers like SMS-loan and pawnbroking operators.
Additional Resources
For further information on Estonia’s money laundering prevention efforts, citizens are advised to visit the website of the Ministry of Finance.