Title: Estonia’s Financial Crimes Law: Money Laundering and Terrorist Financing Prevention Act
The Money Laundering and Terrorist Financing Prevention Act of Estonia, enacted on January 28, 2008, is the primary legislation combating money laundering and terrorist financing in the country. This Act has undergone several amendments, the most recent being in 2014.
Objectives and Scope
The main objective of this Act is to prevent the use of Estonia’s financial system and economic space for money laundering and terrorist financing activities. it covers various sectors including:
- Credit institutions
- Financial institutions
- Organizers of games of chance
- Professionals such as notaries, attorneys, and auditors
Definitions: Money Laundering and Terrorist Financing
The Act defines money laundering as:
- Concealment or disguise of the true nature, source, location, disposition, movement, right of ownership, or other rights related to property derived from criminal activity.
- Conversion or transfer of such property for the purpose of concealing its illicit origin.
Terrorist Financing
As defined in the Act, terrorist financing refers to financing activities related to terrorism as outlined in Section 2373 of the Penal Code.
Due Diligence Measures
The law regulates the due diligence measures that obligated entities must take to prevent money laundering and terrorist financing. These measures include:
- Customer Due Diligence: Identifying and verifying customers, and assessing the risk associated with them.
- Transaction Due Diligence: Monitoring transactions and reporting any suspicious transactions.
- Customer Relationship Due Diligence: Continuously monitoring business relationships and examining facts that indicate a possibility of money laundering or terrorist financing.
Additional Obligations for Credit Institutions and Financial Institutions
These entities have additional obligations to take due diligence measures when opening accounts or providing services in jurisdictions where sufficient measures for preventing money laundering and terrorist financing have not been taken.
Simplified Due Diligence
The Act also sets conditions for simplified due diligence measures when the risk of money laundering or terrorist financing is low. In such cases, obligated entities may take due diligence measures pursuant to a simplified procedure.
Conclusion
Estonia’s Money Laundering and Terrorist Financing Prevention Act provides a legal framework to prevent money laundering and terrorist financing activities within the country. It regulates due diligence measures, applies to various sectors, and offers simplified procedures for low-risk situations.