Financial Crime World

Estonia Steps Up Fight Against Money Laundering and Terrorist Financing

In its ongoing efforts to prevent money laundering and terrorist financing, Estonia has established a range of organizations and institutions responsible for combating these crimes.

Key Players in the Fight Against Money Laundering and Terrorist Financing

  • The Ministry of Finance sets the overall policy direction and coordinates activities in this area.
  • The Estonian Financial Intelligence Unit (FIU) analyzes and verifies information about suspected money laundering or terrorist financing cases, takes measures to preserve property where necessary, and forwards materials to relevant authorities upon detecting elements of a criminal offense.
  • Other key players include:
    • Prosecutor’s Office
    • Security Police
    • Tax and Customs Board
    • Courts
    • Financial Supervision Authority

Coordination and Information-Sharing

A governmental committee has been established to combat money laundering and terrorist financing, chaired by the Minister of Finance. The committee brings together representatives from various ministries, law enforcement agencies, and financial institutions.

Additionally, an Advisory Committee of Market Participants was created to engage with entrepreneurs and other obligated persons in developing anti-money laundering legislation. The committee is serviced by the Ministry of Finance and aims to raise awareness among market participants about their obligations under the relevant laws.

Anti-Money Laundering Requirements

Under Estonia’s Anti-Money Laundering and Terrorist Financing Prevention Act, a range of individuals and businesses are required to report large cash transactions to the FIU. These obligated persons include:

  • Banks
  • Financial service providers
  • Real estate agents
  • Pawnbrokers
  • Auditors
  • Accounting consultants

The law also requires traders who receive cash payments exceeding 15,000 EUR or an equal amount in another currency to report these transactions.

In some cases, notaries, lawyers, bailiffs, and trustees in bankruptcy are also required to follow anti-money laundering regulations. Entrepreneurs may ask for additional information when entering into long-term contracts or making large transactions to identify natural persons or representatives of legal entities.

International Cooperation

Estonia has implemented a range of measures to prevent money laundering and terrorist financing, including registration requirements for entrepreneurs and financial institutions. The country is also committed to international cooperation in these areas, having joined the Financial Action Task Force (FATF) and Moneyval, an evaluation and peer-pressure mechanism that reviews anti-money laundering measures in Council of Europe member states.

National Risk Assessment

According to Estonia’s National Risk Assessment 2020, the country faces a moderate risk of money laundering and terrorist financing. The assessment identified areas for improvement, including enhancing customer due diligence and reporting requirements for obligated persons.

Conclusion

Overall, Estonia’s efforts to combat money laundering and terrorist financing demonstrate its commitment to protecting the financial system and preventing these crimes.