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FATF Report: Assessing Finland’s Anti-Money Laundering and Counter-Terrorist Financing Measures

The Financial Action Task Force (FATF) has released a report assessing Finland’s effectiveness in preventing and combating money laundering and terrorist financing. The report evaluates Finland’s technical compliance with relevant international standards and identifies areas for improvement.

International Cooperation

Finland demonstrates strong international cooperation, particularly with neighboring countries.

  • Finnish authorities cooperate closely with foreign counterparts.
  • Law enforcement agencies (LEAs) seek international cooperation to build cases and share timely information.
  • FIN-FSA, the main financial supervisor, engages actively with EU and Nordic countries’ counterparts.

Priority Actions for Improvement

The report identifies several priority actions for Finland to enhance its anti-money laundering and counter-terrorist financing measures:

1. Develop a Risk-Sensitive Methodology

  • Accelerate and finalize the development of an AML/CFT supervision methodology on a risk-sensitive basis.
  • This will enable more effective targeting of high-risk activities and individuals.

2. Allocate Adequate Resources

  • Allocate human and financial resources to AML/CFT supervisors, including FIN-FSA and RSAA.
  • Insufficient resources can hinder the effectiveness of AML/CFT efforts.

3. Implement Beneficial Ownership Registry

  • Ensure that the framework for the beneficial ownership registry requires verification of collected information.
  • Implement it urgently to prevent potential risks.

4. Fill Gaps in ML/TF Risk Understanding

  • Identify and fill gaps in the common understanding of money laundering (ML) and terrorist financing (TF) risks affecting Finland.
  • This will enable more effective risk assessment and mitigation strategies.

5. Establish Operational Cooperation Platforms

  • Set up channels to support operational cooperation between relevant authorities, including the FIU and AML/CFT supervisors.
  • This will facilitate information sharing and coordination in combating ML/TF.

Effectiveness and Technical Compliance Ratings

The report assigns effectiveness ratings (Substantial, Moderate, or Low) for each of the 11 AML/CFT recommendations:

IO.1: Risk, policy, and coordination

  • High effectiveness rating due to Finland’s risk management framework.

IO.2: International cooperation

  • Moderate effectiveness rating due to some limitations in international cooperation.

… (and so on)

The report also assigns technical compliance ratings (Compliant, Partially Compliant, or Largely Non-Compliant) for each of the 18 technical recommendations:

R.1: Assessing risk and applying a risk-based approach

  • Largely Non-Compliant due to insufficient risk assessment processes.

R.2: National cooperation and coordination

  • Partially Compliant due to some gaps in national cooperation and coordination.

… (and so on)

Overall, the report highlights areas where Finland needs to improve its AML/CFT measures while also acknowledging strengths in international cooperation and risk management.