Finland Tightens Grip on Financial Crime Reporting Obligations
The Finnish Financial Supervisory Authority (FIN-FSA) has introduced a new approach to supervising anti-money laundering (AML) regulations in an effort to prevent terrorist financing and financial sanctions. This strategy, which will remain in effect until further notice, aims to ensure the integrity of Finland’s financial system.
Risk-Based Approach to AML Supervision
Under this scheme, entities subject to FIN-FSA supervision are required to:
- Know their customers’ business activities
- Detect suspicious transactions
- Report any suspicions to the authority and Finland’s Financial Intelligence Unit
To guide supervised entities in these efforts, a comprehensive directory has been issued on customer due diligence and preventing money laundering and terrorist financing.
International Standards and Cooperation
The prevention of financial crimes is underpinned by international standards, with the Financial Action Task Force on Money Laundering (FATF) playing a key role in developing uniform global procedures for customer due diligence. The EU’s Anti-Money Laundering Directives are based on FATF recommendations.
In Finland, the Financial Intelligence Unit, working in conjunction with the National Bureau of Investigation, processes money laundering reports submitted to it. Responsibility for developing AML legislation rests with the Ministry of Finance.
Penalties for Non-Compliance
Supervised entities and their employees may face penalties under the Act on Detecting and Preventing Money Laundering and Terrorist Financing (Anti-Money Laundering Act) if they fail to comply with customer due diligence and anti-money laundering obligations. Negligent money laundering can result in punishment, including:
- Assistance or counseling of customers in investment activities
- Establishment of shell companies
- Transfer of funds despite having weighty reasons to be suspicious of the transactions
FIN-FSA’s Commitment to AML Supervision
The FIN-FSA’s emphasis on AML supervision reflects a commitment to safeguarding Finland’s financial system against illicit activities and maintaining public trust. The authority will continue to scrutinize supervised entities’ procedures, risk management, and internal controls to ensure compliance with statutory requirements.