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Anti-Money Laundering Centre for Strategic Surveillance and Analysis to be Established

19. March 2019 - 16:11

The Government Anti-Money Laundering Commission decided that a centre for strategic analysis operated by the Financial Intelligence Unit is to be established.

The Government Commission assembled on 18 March to discuss the proposals developed by expert working groups on the basis of the report submitted by the Commission late last year.

“The establishment of a centre for strategic surveillance and analysis was one of the most important decisions,” said Finance Minister Toomas Tõniste. “As past lessons have taught us, analytical capacity is one of the key issues in the successful prevention of money laundering in addition to international cooperation and rapid information exchange. The centre will be given access to the databases and registers of various authorities and the development of smart IT solutions will be a very important component here.”

The second lot of proposals once again focused on reducing the risks associated with virtual currency providers in order to cope with new international threats and prevent damage to the good international digital image of the state of Estonia. The options considered in respect of the issue of authorisations included increasing the state fee, the establishment of a licence fee and the requirement of a company’s headquarters and physical location in Estonia, background checks on the owners and the implementation of a notification obligation.

The minister added that the establishment of a joint supervisory authority for preventing money laundering and terrorist financing at the level of the European Union was also discussed in the working groups. “The establishment of such a cooperative authority was supported on the condition that it would not restrict itself to the role of supervising the supervisors, but would also have the authority to make decisions,” emphasised Tõniste.

Late last year, the Government Anti-Money Laundering Commission submitted a thorough analysis of and proposals for more efficient prevention of money laundering. The proposals concerned both the institutional and legal framework of AML. As the cases of money laundering that have recently received much media attention reflect past problems and the current situation is profoundly different, the proposals are based on the current situation and anticipate future risks.

The Commission formed two working groups, one of which dealt with the institutional framework, including a system of analysis and monitoring, issues of cooperation and resources, and the other with the legal framework concerning supervision and penalties. The Commission can proceed immediately with some of the proposals whilst other ideas that were discussed need additional analysis, so work with them continues.

The concept of administrative fines will be taken further and the regulation of whistleblowers in the financial sector also needs to be specified. The present sanctions, which are not proportional in comparison with the violations and must be made stricter, are the biggest problem at the moment. The goal is to make sanctions stricter and proceedings easier in the area of finance and to offer more protection to whistleblowers.

The requests necessary for the implementation of the proposals will be submitted to the state budget after their specification. In addition to future requests, the Prosecutor's Office and the Police and Border Guard Board will be allocated additional resources in the amount of 500,000 euros.

The Government Commission will also continue with the legislative amendments that have already been developed and approved, but the processing of which by the previous composition of the Riigikogu was not completed. The amendments will tighten the conditions on which virtual currency authorisations will be issued, introduce the obligation of reverse proof and toughen punishments in the area of finance.

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