Financial Crime World

Estonia’s War on Money Laundering: A Collaborative Effort from the Government and Financial Sector

In the Baltic Sea nation of Estonia, the fight against money laundering is a collaborative effort between various organizations, involving:

  • Government
  • Regulatory bodies
  • Law enforcement
  • Financial sector

Role of the Ministry of Finance and Estonian Financial Intelligence Unit (FIU)

The Ministry of Finance plays a pivotal role in establishing the general policy and legislation regarding money laundering prevention. One of its key structural units is the Estonian Financial Intelligence Unit (FIU), an independent body under the Police and Border Guard Board.

  • Analyzes and verifies information related to potential money laundering or terrorist financing
  • Takes necessary measures for property preservation
  • Swiftly forwards materials to the competent authorities upon detection of criminal activities

Prosecutor’s Office, Security Police, Tax and Customs Board, and Local Courts

When it comes to identifying offenders and enforcing legal liabilities, these organizations are actively involved.

Maintaining Financial Sector Stability

Financial Supervision Authority

The Financial Supervision Authority ensures the stability, reliability, and transparency of Estonia’s financial sector, keeping a watchful eye on any suspicious activities.

Open Communication and Information Sharing

Governmental committee for the Coordination of Money Laundering Prevention

  • High-level body chaired by the Minister of Finance
  • Brings together representatives from various ministries, law enforcement, banking, and other financial regulatory bodies
  • Meets at least twice a quarter to ensure an effective and coordinated approach to fighting money laundering and terrorist financing

Advisory Committee of Market Participants

  • Platform for market participants to share knowledge and insights on the local financial market
  • Propose legislative improvements
  • Raise awareness among entrepreneurs and engage them in the development of relevant laws and regulations
  • Members include representatives from different industry associations and obligated persons

Vigilance of Estonian Citizens

Estonian citizens, particularly those engaged in the financial sector, play a crucial role in reporting suspicious transactions.

Obliged Persons

Certain financial transactions necessitate reporting to the FIU. Obliged persons include:

  • Banks
  • Financial service providers
  • Game organizers
  • Real estate brokers
  • Pawnbrokers
  • Auditors
  • Service providers dealing with accounting or consulting

Registration Requirements

Providers of services such as SMS loans, other types of loans, pawnbrokers, and currency exchange offices must comply with registration requirements.

Identification Requirements

Entrepreneurs can ask for additional information when conducting long-term contracts or substantial transactions to facilitate proper identification.

Reporting Requirements

Obliged entities must report every transaction involving a cash payment of at least 32,000 EUR or an equivalent amount to the FIU, with the exception of credit institutions for currency exchange services.

For more detailed information, please consult the Ministry of Finance’s website.