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Government Presented with Anti-Money Laundering Proposals

20. December 2018 - 14:46

Today, the Government AML Commission presented a report on the Danske case including a set of proposals on how to further strengthen Estonian anti-money laundering.

The report includes overviews from the Financial Supervisory Authority, Financial Intelligence Unit and the Prosecutor’s Office in connection with the Danske case and an analysis of relevant legal framework, institutional capacities and court cases. The most important part of the report is comprised of a set of proposals on how to further strengthen Estonian anti-money laundering capabilities.

Prime Minister Jüri Ratas said that it is important to learn as a country from the Danske case and the report presented today helps to achieve that objective. “We must understand why and how could so many suspicious transactions take place and how to prevent it from happening in the future. In order to be successful in fighting money laundering we must have both rules that work and adherence to those rules, as well as functioning supervision. The proposals of the Commission will definitely help us become stronger in that sense,” the Prime Minister said.

According to Minister of Finance Toomas Tõniste the Commission’s report includes some very practical proposals and activities that can be proceeded with both in short-term as well as long-term perspective.

“Although Estonian legislative framework and institutional capabilities have significantly developed since the Danske case, there is still much to be done to face new international risks,” Tõniste explained. “For instance, we must take into account the spreading use of digital solutions. Also, we must review today’s definition of money laundering that does not cover money laundering organised by foreign countries.”

The Minister added that taking into consideration the international nature of money laundering, Estonian capacity for strategic analysis and monitoring requires strengthening. “Also, international co-operation between supervisory institutions must be improved.”

As resources foreseen for anti-money laundering purposes must match the respective risks, the Commission proposed to allocate additional budgetary means to Financial Intelligence Unit and the Prosecutor’s Office in the amount of 500,000 euros for the next year.

Chairman of the Board of the Financial Supervisory Authority Kilvar Kessler said that prevention of money laundering is their strategic priority also in the coming years. “We solved the Danske case in 2014 and 2015 and this has been followed by successful handling of other cases. We will continue to work with risk controls of banks and other financial institutions to make sure they meet the business risks,” Kessler remarked. “We are in dialogue with managers of all the banks in that regard. We are also actively involved in inter-institutional work aimed at identifying and eliminating weaknesses in the national anti-money laundering system.”

Head of Financial Intelligence Unit Madis Reimand expressed hope that the draft law introducing reverse burden of proof will be ratified as soon as possible.

“As long as Estonia is a part of international financial system, attempts will take place to launder money through our banks and other financial institutions. It is our job to take the risks to the minimum and concentrate first and foremost on prevention of money laundering. Reverse burden of proof would add an additional instrument to our tool box and, what’s more important, would pose a real danger of losing one’s money if attempting to launder it through Estonia.”

Prosecutor General Lavly Perling said that fighting money laundering is a priority for the Prosecutor’s Office. “In order to make the use of money obtained through crime as complicated as possible both for personal use as well as for committing new crimes, we have significantly strengthened our anti-money laundering capacities over the past few years,” Perling explained. “In today’s world this is the type of crime that requires in addition to information exchange on national level also fast international co-operation.”

The Government has already, at the AML Commission’s proposal, approved a draft law which establishes significantly higher fines in the financial sector, introduces reverse burden of proof on suspicious assets, and makes regulations concerning providers of virtual currency stricter.

The Estonian Government Anti-Money Laundering Commission was formed in 2006. The 14 members of the Commission include the permanent secretaries general of ministries, the heads of the Estonian police, the Estonian Internal Security Service and the Financial Intelligence Unit of the Estonian police as well as representatives of the Financial Supervisory Authority and the central bank of Estonia.