Estonian Institutions at Risk of Money Laundering
Investigation Reveals Vulnerable Sectors
A recent investigation has revealed that Estonian credit institutions, virtual asset service providers, and company service providers are the most vulnerable sectors to money laundering.
Foreign Funds Transferred into Estonian Accounts
The report highlights that the majority of money laundering cases in Estonia involve foreign persons transferring funds obtained through fraud into accounts held by Estonian credit institutions. These funds are then used to facilitate further criminal activities.
Virtual Asset Service Providers at Risk
According to the Financial Intelligence Unit (FIU), virtual asset service providers have decreased significantly, with only 53 authorizations remaining. However, despite this reduction, the volume of transactions has increased again in 2023, reaching €20 billion.
- Decreased authorizations: Only 53 virtual asset service providers remain authorized
- Increased transaction volume: €20 billion in 2023
Company Service Providers at Risk
The FIU also found that company service providers are at risk due to their failure to implement proper due diligence measures and report suspicious transactions. Nearly two-thirds of these providers offer services to non-residents, with only 4% submitting reports in 2023.
- Failure to implement due diligence measures
- Low reporting rates: Only 4% of providers submitted reports in 2023
International Connection
The report reveals that companies associated with Estonia are being used for criminal purposes in other countries. One-third of foreign inquiries submitted to the FIU involve legal persons registered in Estonia, while nearly half of Estonian companies associated with foreigners have no active economic activity in Estonia.
- International connections: Companies associated with Estonia involved in criminal activities abroad
- Lack of economic activity: Nearly half of Estonian companies associated with foreigners have no active economic activity in Estonia
Convictions and Confiscations
The investigation led to the conviction of 14 individuals in four separate cases of money laundering, with assets worth over €668,000 and $37,000 confiscated. The common thread among these cases was business email compromise (BEC) fraud.
- Convictions: 14 individuals convicted in four separate cases
- Confiscated assets: Over €668,000 and $37,000
Cooperation between Authorities
The FIU cooperated with investigative authorities in all four cases, sharing information for the detection, prevention, and investigation of criminal offenses. In three of the cases, the FIU submitted reports of criminal offenses to the police and imposed restrictions on criminal assets, which were later seized during criminal proceedings.
- Cooperation between authorities: FIU shared information with investigative authorities
- Seized assets: Three cases resulted in the seizure of criminal assets
Experts Warn of Ongoing Risk
Experts warn that the ongoing risk of money laundering highlights the need for stricter regulations and increased cooperation between authorities to prevent these types of crimes.