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Financial Intelligence Unit to become a separate institution

2. June 2020 - 12:04

As agreed by the government coalition, the Financial Intelligence Unit (FIU), currently a part of the Police and Border Guard Board, is to become a separate institution in the area of government of the Ministry of Finance. 

Minister of Finance Martin Helme on has presented the Finance Committee of the parliament with the respective proposals for amendments to the draft of the Money Laundering and Terrorist Financing Prevention Act (130 SE) currently under consideration in the parliament. According to proposals, the Financial Intelligence Unit is to become a separate institution from 1 January, 2021.

“The hindering and prevention of money laundering is a very important priority for the government. It was a painful lesson for us that in the recent years, Estonia was used in the major money laundering cases. We must make a real hard effort to ensure that nothing like this never happens again. We have already increased the funding of the institutions, dealing with the prevention of money laundering and amended legislation. Planned amendments include tougher penalties. I consider it important to make changes in the institutional structure of the field as well in order to make the prevention of money laundering and terrorism financing more efficient,” Minister of Finance Martin Helme said. 

The principal objective of bringing the Financial Intelligence Unit into the area of government of the Ministry of Finance is to bring the policymaking of the field closer together with its practical application. "It is important for the government that the Financial Intelligence Unit is a strong partner for the Estonian financial sector. Countering and preventing money laundering in the future will certainly be more efficient, as the Financial Intelligence Unit is an independent institution in the area of government of the Ministry of Finance. This will allow for close cooperation with the Tax and Customs Board and the Financial Supervision Authority," Minister of Finance Martin Helme said.

The Financial Intelligence Unit already has a number of tasks that relate more closely to the Ministry of Finance, such as monitoring entities obliged to apply measures to prevent money laundering, processing applications for authorisations in AML/CFT matters as well as prohibiting business activities, suspending and revoking authorisations.

"Last year, the Cabinet decided to significantly increase the funding and staff of the Financial Intelligence Unit. The unit has commenced creating a new function of strategic analysis. The know-how for the processing of the data required for the strategic analysis is also available within the area of government of the Ministry of Finance. Improved synergy between the institutions is therefore an advantage,” Martin Helme said.

The focus of the fight against money laundering is increasingly on prevention and therefore the Financial Intelligence Unit needs to work more closely and in partnership with market participants. In accordance with new European Union legislation, the Financial Intelligence Unit will receive new tasks. Monitoring fintechs and virtual currencies in addition to traditional banking is becoming more important. The Estonian government has to keep up with the developments of the global financial sector and planned changes in the institutional architecture of AML in Estonia will constitute an important forward looking step. Despite becoming a separate institution, the Financial Intelligence Unit will retain its excellent procedures of exchanging information and cooperation with the Central Criminal Police. 

"The tasks and role of the Financial Intelligence Unit in the Estonian society are set to increase in the coming years. We encourage all employees of the unit to come along with this important change in order to fulfil this expectation with commitment. We would like the establishment of the new institution to be as smooth as possible. The changes will meet the reasonable expectations of the current staff. It can be assumed that the bringing of the Financial Intelligence Unit into the area of governance of the Ministry of Finance will facilitate recruiting of financial sector specialists required for the further development of the unit. After all, the Financial Intelligence Unit is in competition with the financial sector for the best employees," Veiko Tali, Secretary General of the Ministry of Finance said.

The international cooperation networks of the Financial Intelligence Unit and its membership in international organisations will be maintained throughout the period of transition and beyond. After the parliament has passed the proposed amendments into law. a steering group under the leadership of the Ministry of Finance will be created for the smooth coordination of the transition process.

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