Financial Crime World

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Estonia Tightens Grip on Economic Sanctions Compliance

TALLINN, ESTONIA - In a bid to strengthen its stance against money laundering and terrorist financing, Estonia’s financial watchdog has issued a series of advisory guidelines for credit and financial institutions.

Guidelines for Credit and Financial Institutions

The guidelines, approved by Finantsinspektsioon’s management board, provide a framework for institutions to comply with international sanctions and prevent the misuse of the financial system. The “comply or explain” principle applies to these guidelines, meaning that institutions must either implement the measures outlined in the guidelines or provide a justification for not doing so.

Key Topics Covered

The guidelines cover a range of topics, including:

  • Customer due diligence
  • Risk assessment
  • Compliance management
  • Remote customer onboarding solutions
  • Use of payment service providers

Adoption of European Banking Authority Guidelines

Finantsinspektsioon has also adopted several guidelines issued by the European Banking Authority (EBA), which are designed to prevent the misuse of the financial system for money laundering and terrorist financing purposes. These guidelines cover topics such as:

  • Identification of high-risk third countries
  • Appointment of central contact points for electronic money issuers and payment service providers

Reports and Suspicious Transactions

In addition, the Financial Intelligent Unit has issued guidelines on submitting reports to the unit and identifying suspicious transactions.

Legislation and International Cooperation

Estonia’s legislation requires credit and financial institutions to implement measures to prevent money laundering and terrorist financing. The country’s:

  • International Sanctions Act
  • Tax Information Exchange Act
  • Money Laundering and Terrorist Financing Prevention Act all play a crucial role in ensuring compliance with international sanctions.

The European Union has also played a key role in shaping Estonia’s approach to economic sanctions compliance. The 6th Anti-Money Laundering Directive, the 5th Anti-Money Laundering Directive, and Commission delegated regulations have all been implemented in Estonia, providing a framework for credit and financial institutions to comply with international standards.

Cooperation Efforts

As part of its efforts to strengthen its stance against money laundering and terrorist financing, Finantsinspektsioon is working closely with other European authorities to share information and best practices. The agency is also monitoring the implementation of EU restrictive measures and sanctions adopted in implementation of the Common Foreign and Security Policy.

Conclusion

In conclusion, Estonia’s financial watchdog has taken a proactive approach to ensuring compliance with economic sanctions and preventing money laundering and terrorist financing. The guidelines issued by Finantsinspektsioon provide a clear framework for credit and financial institutions to follow, while the country’s legislation and international cooperation efforts demonstrate its commitment to upholding global standards.