Financial Crime World

Here is the converted article in markdown format:

Estonia Establishes Committee to Combat Money Laundering and Terrorist Financing

Tallinn, Estonia - The Estonian government has established an Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Committee to oversee the country’s efforts to prevent financial crimes.

Committee Composition and Responsibilities

The committee is composed of representatives from various government agencies, including:

  • Ministry of Finance
  • Financial Intelligence Unit
  • Estonian Financial Supervision Authority

The committee will be responsible for developing policies and legislative proposals to combat money laundering and terrorist financing. It will also work with international partners to share best practices and coordinate efforts.

Market Participants Advisory Committee

In addition, the committee will establish a Market Participants Advisory Committee, which will consist of representatives from obligated entities, such as:

  • Banks
  • Financial institutions

This committee will provide input on policy development and implementation.

Risk Assessment Mandatory for Obligated Entities

Under new regulations, obligated entities must conduct a risk assessment to identify potential money laundering and terrorist financing risks. The risk assessment must consider the following factors:

  • Customer relationships
  • Geographic locations
  • Products and services offered
  • Communication channels

Based on the risk assessment, obligated entities must:

  • Establish fields of lower and higher risk
  • Determine their risk appetite
  • Develop a risk management model that includes:
    • Simplified due diligence measures for lower-risk areas
    • Enhanced due diligence measures for higher-risk areas

Documentation and Supervision

Obligated entities must document their risk assessments and risk management models and submit them to the competent supervisory authority upon request. The supervisory authority may exempt obligated entities from preparing a documented risk assessment if:

  • The specific risks are clear and understandable
  • The national risk assessment has already established the risks, risk appetite, and risk management model

Conclusion

The Estonian government has emphasized the importance of effective risk management in preventing financial crimes and protecting the integrity of the financial system. The AML/CFT Committee will play a critical role in ensuring that Estonia’s efforts to combat money laundering and terrorist financing are coordinated and effective.