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Estonian Financial Institutions to Implement Simplified Due Diligence Measures

Reducing Bureaucracy while Maintaining Anti-Money Laundering and Terrorist Financing Safeguards

In a move aimed at reducing bureaucracy while maintaining anti-money laundering and terrorist financing safeguards, Estonian financial institutions have been granted permission to adopt simplified due diligence measures for certain transactions.

Simplified Due Diligence Measures

According to amendments to the country’s Money Laundering and Terrorist Financing Prevention Act, credit institutions and financial institutions may use digital identification documents issued by the Republic of Estonia to verify the identity of individuals participating in transactions without requiring them to be physically present. This applies to transactions with a total value of up to €2,000 per calendar month.

  • Transactions with a total value of up to €2,000 per calendar month
  • Digital identification documents issued by the Republic of Estonia

The simplified due diligence measures also apply to:

Insurers and Insurance Brokers

  • Verifying the identity of beneficiaries under life assurance contracts after establishing a business relationship, but not later than upon making a disbursement or commencement of realisation of the rights of the beneficiary.

Providers of Currency Exchange Services

  • Identifying and verifying all persons participating in transactions where cash amounts exceed €6,400 or an equivalent amount in another currency.
  • Providing payment services must also identify all customers making or receiving money transfers through their services.

Other Obligated Persons

  • Organizers of games of chance
  • Notaries
  • Enforcement officers
  • Bankruptcy trustees
  • Auditors
  • Attorneys
  • And other legal service providers may take simplified due diligence measures if the risk of financing money laundering or terrorist financing is low.

Aim and Implementation

The amendments aim to strike a balance between reducing administrative burdens on financial institutions while maintaining effective anti-money laundering and terrorist financing safeguards. The changes will come into force on [date].

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