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Estonia Receives Mixed Ratings from Financial Action Task Force (FATF)

Estonia has received a mixed bag of ratings from the Financial Action Task Force (FATF) on its implementation of anti-money laundering and combating terrorist financing measures. According to the FATF’s Estonia Mutual Report 2022, Estonia is considered compliant in certain areas, while it falls short in others.

Assessment Methodology

The report assesses Estonia’s compliance with the technical requirements of the FATF Recommendations, which aim to prevent the misuse of financial systems for money laundering and terrorist financing. The ratings range from “compliant” (C) to “non-compliant” (NC).

Compliant Ratings

Estonia received a compliant rating in several areas:

  • National cooperation and coordination (R.2)
  • Regulation and supervision of financial institutions (R.26)
  • Powers of supervisors (R.27)
  • Mutual legal assistance (R.37)

Additionally, Estonia was found to be largely compliant in the following areas:

  • Record keeping (R.11)
  • Customer due diligence (R.10)

Partially Compliant Ratings

However, Estonia was found to be partially compliant in several areas:

  • Assessing risk and applying a risk-based approach (R.1)
  • Confiscation and provisional measures (R.4)
  • Targeted financial sanctions related to terrorism and terrorist financing (R.6)
  • Transparency and beneficial ownership of legal persons and arrangements (R.24)

Non-Compliant Ratings

Estonia was also found to be non-compliant in several areas:

  • Regulation and supervision of DNFBPs (R.28)
  • Powers of law enforcement and investigative authorities (R.31)

Roadmap for Improvement

The FATF’s report provides Estonia with a roadmap for improvement, highlighting areas where it needs to strengthen its anti-money laundering and combating terrorist financing measures.

Commitment to Reform

Estonia has committed to addressing the deficiencies identified in the report and implementing the necessary reforms to enhance its financial system’s resilience against money laundering and terrorist financing.