Terrorist Financing Laws in Estonia Strengthened to Combat Money Laundering
Estonia has taken significant steps to prevent money laundering and terrorist financing, with several organizations playing a crucial role in this effort.
Key Players in Anti-Money Laundering Efforts
- Ministry of Finance: Responsible for developing the overall policy, legislation, and coordination of anti-money laundering activities in Estonia.
- Estonian Financial Intelligence Unit (FIU): An independent unit within the Estonian Police and Border Guard Board that analyzes and verifies information related to suspected money laundering or terrorist financing.
- Prosecutor’s Office, Security Police, Tax and Customs Board, and courts: These organizations work closely together to identify criminals and establish appropriate legal liabilities when necessary.
- Financial Supervision Authority: Responsible for ensuring the stability, reliability, and transparency of Estonia’s financial sector.
Governmental Committee for Coordination
A governmental committee for the coordination of money laundering prevention was established to promote cooperation among various stakeholders. The Committee is chaired by the Minister of Finance and includes representatives from:
- Ministries
- Tax and Customs Board
- Prosecutor’s Office
- Police
- Bank of Estonia
- Financial Supervision Authority
Advisory Committee of Market Participants
An Advisory Committee of Market Participants has also been set up to facilitate communication between market participants and provide a platform for entrepreneurs to contribute to the development of anti-money laundering legislation.
Obligated Persons and Reporting Requirements
According to Estonia’s Anti-Money Laundering and Terrorist Financing Prevention Act, which came into effect in 2008, the number of obligated persons who must report cash transactions of large value to the Financial Intelligence Unit has increased. These obligated persons include:
- Banks
- Entrepreneurs providing financial services
- Organizers of games of chance
- Real estate agents
- Pawnbrokers
- Auditors
- Consultants
They are required to notify the FIU if a cash payment of at least 15,000 EUR or an equal amount in another currency is made.
In some cases, notaries, lawyers, bailiffs, trustees in bankruptcy, and others may also be required to follow anti-money laundering regulations.
Additional Requirements
To enable identification of natural persons or representatives of legal persons, entrepreneurs may request additional information when entering into long-term contracts or making large transactions. Obligated persons, except credit institutions, must notify the FIU about every transaction involving a cash payment of at least 32,000 EUR or an equal amount in another currency. Credit institutions have this notification obligation only if providing currency exchange services.
Registration Requirements
All entrepreneurs are required to register in Estonia’s Register of Economic Activities, while financial institutions not subject to supervision by the Financial Supervision Authority must also register themselves. Those providing SMS-loans, other types of loans, pawnbroking, and currency exchange services must make similar registrations to operate legally in Estonia.
For more information on Estonia’s anti-money laundering efforts, please visit the Ministry of Finance website.