Financial Crime World

Estonia Urged to Strengthen Private Sector Efforts in Combating Terrorist Financing

The Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) has released a report highlighting areas where Estonia needs to improve its efforts in combating money laundering and terrorist financing.

Recommendations for Improvement

  • Enhance understanding of money laundering and terrorism financing risks
  • Improve effectiveness of investigations and prosecutions
  • Increase confiscation of criminal proceeds
  • Strengthen application of anti-money laundering/counter-terrorism financing preventive measures by the private sector
  • Improve supervision and transparency of beneficial ownership of legal persons and arrangements

Current Strengths

  • Estonia has an appropriate mechanism for identifying, assessing, and understanding money laundering and terrorism financing risks
  • Coordination and cooperation between the Estonian Financial Intelligence Unit (FIU) and law enforcement authorities is commendable

Areas Requiring Improvement

  • The FIU should reinforce proactive detection of money laundering and terrorism financing targets
  • Law enforcement authorities and prosecutors in Estonia need to enhance their efforts in dealing with complex types of money laundering, including those involving legal persons and company service providers
  • Significant enhancement of efforts to seize, confiscate, and recover the proceeds of money laundering and predicate offenses is needed
  • Supervisory authorities should strengthen implementation of preventive measures by Estonia’s private sector

Private Sector Efforts

  • The report notes that there is currently a good understanding of money laundering and terrorism financing risks in the banking sector
  • However, virtual assets service providers and company service providers demonstrated a superficial understanding of these risks

International Cooperation

  • Estonia provides generally timely and constructive assistance across a range of requests for international cooperation, including mutual legal assistance
  • Some technical and procedural constraints need to be addressed

As a result of the report, Estonia is subject to MONEYVAL’s enhanced follow-up reporting process. The Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism is a permanent monitoring body of the Council of Europe tasked with assessing compliance with principal international standards for countering money laundering and the financing of terrorism, as well as issuing recommendations to national authorities regarding necessary improvements to their systems.