Financial Crime World

Estonia Urged to Strengthen Anti-Money Laundering and Terrorism Financing Efforts

Strasbourg, January 25, 2023

The Council of Europe’s anti-money laundering body, MONEYVAL, has published a report urging Estonia to further strengthen its measures to combat money laundering (ML) and financing of terrorism (FT). The report provides an assessment of the country’s level of compliance with the recommendations of the Financial Action Task Force (FATF) as of May 2022.

Key Findings

  • While Estonia has demonstrated a substantial level of effectiveness in international cooperation, use of financial intelligence, and implementation of targeted financial sanctions on proliferation financing, further improvements are needed in several areas.
  • Enhancing the understanding of ML/TF risks, effectiveness of ML and TF investigations and prosecutions, confiscation of proceeds of crime, and implementation of targeted financial sanctions on FT are among the areas that require improvement.

Areas for Improvement

Understanding ML/TF Risks

  • Estonia has an appropriate mechanism for identifying, assessing, and understanding ML/TF risks, but the results do not provide a fully sufficient view of the risk environment.
  • The Estonian Financial Intelligence Unit should reinforce proactive detection of ML/TF targets.

Investigations and Prosecutions

  • Law enforcement agencies and prosecutors need to enhance their efforts in dealing with complex types of ML, particularly those involving legal persons and company service providers.

Confiscation of Proceeds of Crime

  • Estonia needs to improve its efforts to seize, confiscate, and recover proceeds of crime, especially those moved abroad.

Targeted Financial Sanctions on FT

  • Estonia’s authorities have made progress in investigating and prosecuting FT, but more needs to be done to enhance their understanding of national TF risks and the effectiveness of criminal sanctions.

Preventative Measures

  • There has been significant improvement over the assessment period due to focused supervisory actions.
  • Further efforts are still needed to strengthen the implementation of these measures by the private sector, particularly in the banking sector, virtual assets service providers, and company service providers.

Beneficial Ownership Information

  • Estonia’s failure to effectively apply sanctions was also noted as a concern.
  • There are concerns about the accuracy and currentness of beneficial ownership information on legal persons, which is available to competent authorities.

International Cooperation

  • Estonia provides generally timely and constructive assistance in responding to international cooperation requests, including mutual legal assistance, despite some technical and procedural constraints.

Follow-up Reporting Process

As a result of the report, Estonia will be subject to MONEYVAL’s enhanced follow-up reporting process.