Financial Crime World

Terrorist Financing Laws in Estonia Receive Boost with Strengthened Measures to Combat Illicit Activities

Estonia has taken significant steps to prevent money laundering and terrorist financing, with a range of organizations and authorities working together to identify and prosecute criminals.

The Role of the Ministry of Finance and the Estonian Financial Intelligence Unit (FIU)

  • The Ministry of Finance is responsible for general policy, legislation, and coordination in the area of anti-money laundering and counter-terrorism.
  • The FIU analyzes and verifies information about suspicions of money laundering or terrorist financing, takes measures to preserve property where necessary, and forwards materials to competent authorities upon detection of elements of a criminal offense.

Collaboration among Authorities

  • The Prosecutor’s Office, Security Police, Tax and Customs Board, and courts in Estonia are actively working together to identify criminals and establish legal liabilities if necessary.
  • The Financial Supervision Authority is responsible for stability, reliability, and transparency of the financial sector, exercising supervision in this field due to its direct connection with money laundering and terrorist financing.

Governmental Committee for Money Laundering Prevention

  • A governmental committee was established to promote the fight against money laundering and terrorist financing.
  • The committee, chaired by the Minister of Finance, includes representatives from ministries, Tax and Customs Board, Prosecutor’s Office, police, Bank of Estonia, and Financial Supervision Authority.
  • The committee meets as often as needed but at least once every four months.

Advisory Committee of Market Participants

  • An Advisory Committee of Market Participants was created to channel information and enhance communications regarding market situations and listen to proposals from market participants.
  • Members include representatives from different associations of entrepreneurs and other obligated persons, serviced by the Ministry of Finance.

Role of Law-abiding Citizens in Preventing Money Laundering

  • Law-abiding citizens of Estonia, especially those in the financial sector, play a crucial role in preventing money laundering.
  • The Anti-Money Laundering and Terrorist Financing Prevention Act requires obligated persons to inform the Financial Intelligence Unit if cash transactions of large value are made.

Obligated Persons under the Act

  • Obligated persons include:
    • Banks
    • Entrepreneurs providing financial services
    • Organizers of games of chance
    • Those carrying out or acting as intermediaries in real estate transactions
    • Pawnbrokers
    • Auditors and consultants
    • Notaries, lawyers, bailiffs, trustees in bankruptcy, and others

Registration Requirements for Obligated Persons

  • Entrepreneurs must register in the Register of Economic Activities.
  • Financial institutions and service providers must also register if they are not subject to supervision by the Financial Supervision Authority.

International Cooperation and Membership

  • Estonia is a member of international organizations such as the Financial Action Task Force (FATF) and Moneyval, demonstrating its commitment to combating money laundering and terrorist financing.
  • These organizations play a key role in promoting national and international policies to combat money laundering and terrorist financing.

National Risk Assessment 2020

  • The National Risk Assessment 2020 highlights Estonia’s efforts to strengthen its anti-money laundering and counter-terrorism measures, building on previous assessments such as the 2015 report.
  • With a range of measures in place, Estonia remains committed to preventing money laundering and terrorist financing and ensuring a secure financial environment for its citizens.