Financial Crime World

Money Laundering Crackdown in Finland: A Closer Look at the Country’s Anti-Money Laundering Legislation

Finland, a prominent member of the European Union (EU), has been actively implementing rigorous measures to combat money laundering and terrorist financing within its borders. In this article, we examine the Finnish anti-money laundering legislation, particular emphasis on the Anti-Money Laundering Act.

Key Legislation: Finland’s Anti-Money Laundering Act

One of Finland’s key pieces of legislation is the Anti-Money Laundering Act. This law, enacted to detect, prevent, and reinforce the tracing and recovery of proceeds from crime, applies to various sectors and obliges businesses to perform the following:

  • Risk assessments
  • Identify customers
  • Report suspicious activities to the Financial Intelligence Unit (FIU) of the National Bureau of Investigation (NBI)

The Anti-Money Laundering Act is influenced by international recommendations from the Financial Action Task Force on Money Laundering (FATF) and EU regulations. Recently, Finland updated its legislation to address virtual currency providers and further strengthen its anti-money laundering efforts.

New Regulations: Virtual Currency Providers

Finland’s amendment to the Act on Detecting and Preventing Money Laundering and Terrorist Financing focuses on virtual currency providers. These businesses must now register with the Financial Supervisory Authority, follow strict customer due diligence procedures, and comply with the Anti-Money Laundering Act. Non-compliance with the regulations can lead to severe administrative sanctions.

Customer Due Diligence Measures

In addition to the mandatory customer due diligence procedures, the Act includes provisions on simplified and enhanced customer due diligence measures depending on the risks involved. The following outlines when and where these measures must be implemented:

Simplified Customer Due Diligence

  • Low-risk customers and transactions (defined by the Government Decree)

Enhanced Customer Due Diligence

  • Complex or high-risk situations (defined by the Government Decree)
  • Politically Exposed Persons (PEPs) holding specific public positions

Politically Exposed Persons

PEPs are considered high-risk individuals. Finland’s Government Decree on Politically Exposed Persons classifies the following as politically exposed:

  • Heads of state and government
  • High-ranking military officers
  • Judges
  • Prosecutors
  • Members of legislative bodies
  • Members of political parties
  • Other individuals holding high-ranking public functions

Individuals holding these positions are subject to increased scrutiny and enhanced customer due diligence measures.

Act on the Bank and Payment Accounts Control System

Finland’s regulatory framework also includes the Act on the Bank and Payment Accounts Control System. This legislation increases the authorities’ access to electronic banking information, allowing them to better monitor and prevent suspicious activities.

Conclusion

In summary, Finland is dedicated to ensuring a secure and compliant financial environment. Its comprehensive anti-money laundering regulations, along with its commitment to international recommendations, enable the country to maintain a strong and resilient financial system.