Financial Crime World

Title: Estonia’s New AML Regulations: Cracking Down on Money Laundering and Terrorist Financing

Subtitle

The Estonian government has passed new regulations, the Estonian Money Laundering and Terrorist Financing Prevention Act, aimed at preventing money laundering and terrorist financing, expanding the scope of obligations for various industries and professionals.

Overview

  • Title: Estonian Money Laundering and Terrorist Financing Prevention Act
  • Adoption Date: October 26, 2017 *Scope: Increasing transparency, combating illicit activities

Chapter 1: Fundamental Objectives

  • Objectives: Transparency, preventing money laundering and terrorist financing
  • Principals: Risk assessment, management, mitigation *Roles: Financial Intelligence Unit, supervision of obliged entities *Reporting: Legal persons disclosing beneficial owners

Definitions

  • Section 3: Important terms and definitions
    • Cash, property, obliged entity, business relationship, customer
    • Virtual currency, virtual currency wallet service, politically exposed person, senior management

Money Laundering

  • Section 4: Process of converting, transferring, or disguising criminal proceeds *Applicability: Activities committed in or outside Estonia *Definition: Criminal activities’ proceeds

Terrorist Financing

  • Section 5: Financing and supporting acts of terrorism

Risk Appetite and Assessment

  • Section 10: Obliged entities establish risk appetite
  • Components: Reputation, legal and regulatory, financial risks, ML/TF risks

Key Points

  1. New regulations to combat money laundering and terrorist financing in Estonia
  2. Expanded scope for credit institutions, financial institutions, gambling operators, real estate traders, precious metal dealers, auditors, legal professionals plus others
  3. Increased transparency in Estonian business environment
  4. Objectives include risk assessment, management, mitigation, and supervision of obliged entities
  5. Definitions provided for terms like “cash,” “property,” “virtual currency,” “terrorist financing,” and others
  6. Obliged entities must establish a risk appetite to outline accepting risks for economic activities and strategic goals
  7. Money laundering: conversion of proceeds of crime
  8. Terrorist financing: financing acts of terrorism.