Financial Crime World

Payment Flows Exceed Trade Volumes in Estonia

New data reveals that payment flows between Estonia and various countries have exceeded trade volumes in recent years. While exports and imports have fluctuated, cross-border payments have remained strong.

  • The volume of exports to the United Arab Emirates increased in 2022, while imports decreased.
  • Payments received from the UAE followed a similar trend as exports, with payments made to the country being significantly higher in 2022 than in 2021.
  • Hong Kong saw a slight increase in export volumes over the past three years, while imports remained stable. However, the volume of cross-border payments to and from Hong Kong has been much higher than trade volumes, with payment levels decreasing year-on-year.
  • Exports to Serbia have been growing steadily, with imports showing a clearer increase. The volume of large cross-border payments received doubled in 2022 and remained at the same level during Q1-Q3 2023. Payments made also showed a slight upward trend.
  • Turkey’s export volumes have grown moderately, while imports doubled in 2022. Payments received increased 2.5-fold in the first year of full-scale war, with a projected decline in 2023 but still remaining higher than in 2021. Payments made were at a record high level in 2022.

International Financial Sanctions Impact

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The start of the full-scale war between Russia and Ukraine has led to significant changes in cash flows towards Russia. The EU’s sanctions have gradually reduced cross-border payments to and from Russia, with:

  • Payments and cash withdrawals using Estonian and Russian bank cards in Russia and Estonia falling to extremely low levels or even zero in spring 2022.
  • A sharp drop in payments made to Belarus was observed in the summer of 2022 due to a decline in exports from Belarus to Estonia resulting from trade sanctions.

Main Conclusions

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The full-scale war between Russia and Ukraine has led to significant changes in cash flows towards Russia, with cross-border payments to and from Russia gradually decreasing. Payments and cash withdrawals using Estonian and Russian bank cards in Russia and Estonia have fallen to extremely low levels or even zero.

  • Trade has been picking up since 2022, particularly with third countries highlighted in financial sanction reports submitted to the FIU.
  • Market participants have been active in applying sanctions, with a sharp increase in reports of suspected international sanctions over time.
  • The EU has taken a firm stance on sanctions evasion, with cases where individuals attempted to bring cash to Russia for personal use being deemed a breach of restrictions.