Financial Crime World

Estonian Authorities Crack Down on Money Laundering: New Regulations and Centralized Units

Amid rising concerns over money laundering (ML) and terrorist financing (TF) activities in Estonia, various organizations have taken on the responsibility of preventing such illicit transactions. The Estonian government has established a robust framework toidentify and prosecute ML and TF offenses.

Key Players in Estonia’s ML and TF Prevention

Ministry of Finance

The Ministry of Finance plays a crucial role in shaping policy, legislation, and coordinating efforts against ML and TF. Its responsibilities include:

  • Promoting awareness and legislation
  • Ensuring financial sector stability and transparency

Estonian Financial Intelligence Unit (FIU)

The independent structural unit of the Estonian Police and Border Guard Board is dedicated to thwarting potential ML and TF activities. FIU analysts:

  • Scrutinize and authenticate information
  • Preserve assets where necessary
  • Report potential criminal offenses to law enforcement agencies

Law Enforcement Agencies and Courts

The Prosecutor’s Office, Security Police, Tax and Customs Board, and courts work collaboratively to identify and prosecute criminals involved in ML and TF.

Financial Supervision Authority

The Financial Supervision Authority monitors the stability, reliability, and transparency of the Estonian financial sector, recognizing the link between financial stability and ML and TF prevention.

Governmental Committees for ML and TF Prevention

Coordination of ML and TF Prevention

A governmental committee has been established to foster collaboration and ensure an effective, unified approach to combating financial crimes. Representatives from various ministries, law enforcement agencies, and financial oversight bodies attend these meetings, held at least every four months.

Advisory Committee of Market Participants

An Advisory Committee of Market Participants was created to facilitate information exchange between the government and industries to address ML and TF risks.

Anti-Money Laundering and Terrorist Financing Prevention Act – This act came into effect in January 2008 and expanded the number of obliged entities responsible for reporting large-value transactions. These entities include:

  • Banks
  • Financial service providers
  • Real estate traders
  • Auditors
  • Accounting or consulting firms

Individuals or entities are required to:

  • Provide additional identification information for long-term business relationships or large-sum transactions

Obliged persons are also required to report every transaction involving a cash payment of at least €32,000 or an equivalent amount in another currency to the FIU.

Financial institutions not subject to the Financial Supervision Authority’s oversight and entities offering SMS loans, other types of loans, pawnbroker services, and currency exchange services must register with the Estonian Register of Economic Activities to legally operate in the country.

Stay Informed of the Latest Regulations and Resources

Keep up-to-date with the latest anti-money laundering regulations and resources by visiting the Ministry of Finance’s website.**