Finland Steps Up Fight Against Financing of Terrorism and Money Laundering
Finland’s financial regulator, Finansinspektionen (FI), has identified key areas to focus on in 2024 to combat the financing of terrorism and money laundering.
Companies as Instruments of Crime
The report highlights the risk that companies are being used as instruments of crime, making them more difficult to monitor than private individuals. FI warned about an increased risk of terrorist financing, particularly through the use of legally obtained funds.
- The risk of terrorist financing can occur quickly and without major costs, using simple means such as digital banking services and cryptocurrency exchanges.
- FI is concerned about the growing FinTech sector, which offers innovative payment services but may not always adapt its risk management to its growing operations.
Money Laundering Risks
The regulator identified a higher risk of money laundering among small and mid-sized banks, as well as in cash-intensive business activities such as:
- Foreign currency exchange
- Informal value transfer services like hawala
Cryptocurrency Exchanges
FI warned about the risks associated with trading in cryptoassets, which are often used for illegal purposes. The report highlighted the need for firms to adapt their risk management to the growing use of digital banking services and cryptocurrency exchanges.
International Sanctions
The regulator emphasized the importance of compliance with international sanctions, particularly following Russia’s invasion of Ukraine. FI urged businesses to follow the rapid development of sanction regimes and comply with provisions to prevent illicit activities.
Coordinated Effort Needed
The report is based on FI’s national risk assessment and is aligned with the EU’s supranational risk assessment. It highlights the need for a coordinated effort among financial institutions, law enforcement agencies, and regulators to combat the financing of terrorism and money laundering.
“Finland is committed to taking a proactive approach to combating the financing of terrorism and money laundering,” said FI’s Director General. “We will work closely with the industry and other stakeholders to identify and mitigate these risks.”
Vigilance in the Fight Against Financial Crimes
The report emphasizes the importance of vigilance in the fight against financial crimes, particularly in an increasingly digital and interconnected world.
By working together, Finland aims to take a proactive approach to combating the financing of terrorism and money laundering.