Financial Crime World

Finnfund’s Commitment to Combatting Money Laundering and Terrorist Financing: A Look at the KYC Procedure in Finland

Finland’s leading development finance institution, Finnfund, strengthens its stand against money laundering and terrorist financing through a rigorous Know Your Customer (KYC) procedure. This critical process is an integral part of Finnfund’s investment strategy, ensuring adherence to global financial regulations and best market practices.

Regulatory Framework

  • FATF: The Financial Action Task Force (FATF), an intergovernmental organization under the OECD’s auspices, plays a crucial role in combating money laundering and terrorist financing worldwide.
  • European Commission: The European Commission identifies countries at risk and regulates money laundering and terrorist financing within the European Union.
  • Money Laundering Act (Finland): Finland’s Act on Preventing Money Laundering and Terrorist Financing (444/2017) governs the prevention and detection of these illicit activities.

Risk Assessment and Customer Identification

Finnfund’s risk-assessment approach drives its customer identification process. Finnfund assesses the risks associated with its operations to prevent money laundering and terrorist financing, leading to varying levels of due diligence. Customers are checked against:

  • UN, UK, EU, and US sanctions lists
  • Screened for financial sanctions

Reporting Suspicious Transactions

  • Finnfund is required by the Money Laundering Act to report suspicious transactions to the Finnish Financial Intelligence Unit (FIU)
  • Projects are continuously monitored to maintain up-to-date identification information, with increased scrutiny for Finnfund’s riskiest ventures

Organizational Changes

In 2022, Finnfund established an independent compliance function responsible for overseeing whistleblowing and sanctions-related issues alongside the KYC process. This unit:

  • Heads by a senior compliance counsel
  • Dedicated employees handle KYC due diligence and monitoring, along with investment officers and legal counsel support

Training and Compliance

  • Regular anti-money laundering and terrorist financing training is mandatory for Finnfund’s investment personnel and relevant support functions
  • New employees undergo KYC training
  • Incorporates clauses in each financing agreement addressing money laundering prevention and combating terrorist financing

Adaptability and Continuous Evolution

As a committed and responsible player in the global financial landscape, Finnfund continually evolves its KYC procedures to adapt to the ever-changing regulatory landscape and maintain a robust stance against money laundering and terrorist financing.