Estonia’s Fight Against Terrorism: A Review of the Country’s Compliance with CFT Guidelines

The Financial Action Task Force (FATF) has recently evaluated Estonia’s compliance with its Recommendations on Combating the Financing of Terrorism (CFT). The assessment highlights both strengths and weaknesses in Estonia’s efforts to prevent the financing of terrorist activities.

Strengths and Weaknesses

According to the report, Estonia is:

• Partially compliant with several key requirements, including:
  • R.1 - Assessing risk and applying a risk-based approach, where Estonia has implemented a risk-based approach but needs to improve its risk assessment methodology.
  • R.13 - Correspondent banking, as it has not fully implemented the necessary measures to prevent terrorist financing through correspondent banking relationships.
• Largely compliant with several other key requirements, including:
  • R.2 - National cooperation and coordination, where it has established a strong framework for national coordination and cooperation among relevant authorities.
  • R.10 - Customer due diligence, as it requires financial institutions to conduct customer due diligence on all customers, including those from high-risk countries.

Areas of Concern

However, Estonia’s report highlights some areas of concern, including:

• Compliant with R.30 - Responsibilities of law enforcement and investigative authorities, where it needs to strengthen its laws and regulations to ensure that law enforcement agencies have the necessary powers to investigate and prosecute terrorist financing offenses.

Areas for Improvement

The report also notes several areas where Estonia requires improvement, including:

• R.14 - Money or value transfer services, where Estonia needs to enhance its monitoring and reporting of suspicious transactions related to money or value transfers.
• R.21 - Tipping-off and confidentiality, as it has not fully protected the confidentiality of information related to terrorist financing investigations.

Conclusion

While Estonia’s report highlights some strengths in its efforts to combat the financing of terrorism, it also identifies areas that require improvement. The country must continue to strengthen its laws, regulations, and practices to effectively prevent the financing of terrorist activities and protect its financial system from abuse.