Financial Crime Prevention Measures in Estonia: A Multi-Faceted Approach

Estonia has taken a comprehensive approach to preventing financial crimes such as money laundering and terrorist financing. The Ministry of Finance plays a key role in developing the country’s general policy, legislation, and coordination of activities in this area.

Key Players in the Fight Against Financial Crime

• Estonian Financial Intelligence Unit (FIU): An independent authority that analyzes and verifies information about suspected cases of money laundering or terrorist financing.
  • Takes measures to preserve property where necessary
  • Forwards materials to competent authorities upon detection of criminal elements
• Other key players:
  • Prosecutor’s Office
  • Security Police
  • Tax and Customs Board
  • Courts
  • Financial Supervision Authority: Ensures stability, reliability, and transparency in Estonia’s financial sector

Coordination and Cooperation

• A governmental committee was established to combat money laundering and terrorist financing, chaired by the Minister of Finance.
• The committee brings together representatives from various ministries, law enforcement agencies, and financial institutions.
• An Advisory Committee of Market Participants was set up to enhance communication between market participants and authorities.

Law-Abiding Citizens’ Role

• Reporting cash transactions: According to the Anti-Money Laundering and Terrorist Financing Prevention Act (2008), many individuals and businesses are required to report cash transactions above certain thresholds.
  • Obligated persons include banks, entrepreneurs providing financial services, organizers of games of chance, real estate agents, pawnbrokers, auditors, accountants, and consultants.
  • These individuals and businesses must notify the Financial Intelligence Unit if they conduct or facilitate transactions worth at least €15,000 in cash.

International Standards

• Estonia is a member of:
  • Financial Action Task Force (FATF)
  • Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (Moneyval)

National Risk Assessment 2020 Findings

• The assessment found that Estonia’s anti-money laundering system is effective, but there are still areas for improvement.
• Vulnerabilities were identified in cash-intensive businesses, such as real estate agents and pawnbrokers.

Addressing Weaknesses

• Introduced measures to enhance customer due diligence
• Improved reporting requirements
• Increased cooperation between authorities

Recognition and Reputation

• Estonia’s commitment to preventing financial crime has earned recognition from international organizations.
• The country has solidified its position as a reputable financial hub in the region.