Financial Crime World

Estonia Urged to Boost Fight Against Financial Fraud

MONEYVAL Publishes Evaluation Report Highlighting Areas for Improvement

A recent evaluation report by the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and Combating the Financing of Terrorism (MONEYVAL) has identified several areas where Estonia needs to improve its efforts in combating financial fraud.

Progress and Challenges

While acknowledging Estonia’s progress in international cooperation, use of financial intelligence, and implementation of UN targeted financial sanctions on proliferation financing, the report emphasized the need for strengthening the capacities and performance of the private sector and improving law enforcement efforts. MONEYVAL praised Estonia’s national risk assessment mechanism, which provides a comprehensive view of ML/TF risks through data from public and non-public sources.

Key Findings

Here are some key findings from the report:

  • Outcomes of nationwide risk assessments have not been integrated into the objectives and activities of individual authorities, hindering effective implementation of AML/CFT measures.
  • The Estonian Financial Intelligence Unit (EFIU) needs to enhance its capacities and working practices in detecting ML/TF targets.
  • Criminal sanctions for money laundering offenses are not dissuasive or effective, and confiscation measures often fail to recover proceeds of crime moved abroad.
  • Estonia does not proactively pursue undeclared cash or assets hidden offshore.
  • Virtual asset service providers and company service providers demonstrated a superficial understanding of ML risks.

Recommendations

MONEYVAL emphasized the need for continued efforts to strengthen the implementation of preventative measures in the private sector, as well as improving the availability of information on beneficial ownership. The report also highlighted Estonia’s reservation to refuse assistance based on the dual criminality principle with regard to non-EU countries, which may hinder international cooperation.

Conclusion

Overall, the report underscores the importance of enhanced coordination and cooperation between authorities, improved risk assessment mechanisms, and strengthened supervisory actions to combat financial fraud in Estonia.