Financial Crime World

Estonia Adopts Money Laundering Prevention Act to Fight Financial Crime

Tallinn, Estonia - The Estonian government has introduced the Money Laundering Prevention Act, aimed at preventing and combating money laundering and terrorist financing in the country.

Strengthening Financial Sector Resilience

The act is designed to strengthen the financial sector’s resilience against financial crime and ensure that Estonia complies with European Union anti-money laundering directives. The new law requires financial institutions to implement stricter customer due diligence measures, including:

  • Verifying the identity of customers
  • Monitoring transactions for suspicious activity

Guidelines for Identifying High-Risk Third Countries

The act also establishes guidelines for identifying high-risk third countries and requires financial institutions to take additional measures to mitigate money laundering and terrorist financing risks in these jurisdictions.

Advisory Guidelines from Estonian Financial Supervision Authority

The Estonian Financial Supervision Authority (Finantsinspektsioon) has issued advisory guidelines to explain the legislation and provide guidance to supervised entities. The guidelines aim to ensure that financial institutions understand their obligations under the Money Laundering Prevention Act.

European Banking Authority Guidelines

The European Banking Authority (EBA) has also issued guidelines on:

  • Customer due diligence
  • Risk factors
  • Compliance management
  • Remote customer onboarding solutions
  • Policies for managing money laundering and terrorist financing risks

These guidelines have been adopted as advisory guidelines by Finantsinspektsioon and are applicable to Estonian financial institutions.

Part of International Efforts

The Money Laundering Prevention Act is part of Estonia’s efforts to strengthen its anti-money laundering and counter-terrorist financing regime in line with international standards and European Union directives. The act aims to:

  • Protect the integrity of the financial system
  • Prevent the misuse of financial services for criminal purposes
  • Ensure that Estonia remains a safe and attractive location for foreign investment

Implementation of 6th Anti-Money Laundering Directive

In related news, Estonia has also implemented the 6th Anti-Money Laundering Directive, which introduces new requirements for financial institutions, including:

  • Enhanced customer due diligence measures
  • Increased transparency in cross-border transactions

The directive aims to strengthen the EU’s anti-money laundering framework and ensure that all member states have similar standards in place to prevent money laundering and terrorist financing.

Commitment to Combating Money Laundering and Terrorist Financing

Estonia is committed to implementing the necessary measures to combat money laundering and terrorist financing, and the Money Laundering Prevention Act is an important step towards achieving this goal. The act will help to strengthen the country’s financial sector and ensure that it remains a reliable partner for international cooperation in fighting financial crime.