Estonia may be subjected to enhanced surveillance re money laundering

TALLINN – In view of the new evaluation by the Moneyval expert committee due at the beginning of 2021, Estonia is at risk of being listed as a country subject to enhanced surveillance when it comes to money laundering, Finance Minister Martin Helme said on Friday.

"Estonia is slated for a new Moneyval evaluation at the beginning of 2021. This time it will be evaluated how we are implementing different laws and regulations in practice and what is the capability of our institutions to actually engage in combating money laundering. We must make an effort as a state because the present situation may not be good enough to pass the evaluation successfully," Helme said in a press release. 

"It seems to me than several state institutions are underestimating the potential risk that in 2021 Estonia indeed may find itself on the list of countries under enhanced surveillance when it comes to money laundering. That will have its consequences for the country's reputation, the financial environment, and also related administrative burden," the minister added. 

Moneyval is the common and official name of the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism, a permanent monitoring mechanism of the Council of Europe.

The Estonian governmental committee on the prevention of money laundering and terrorist finance at its meeting on Wednesday focused on three main topics: an analysis of the money laundering cases that took place in 2007-2014, further developing the legislative base, and the conduct of a domestic risk assessment and preparing for the subsequent Moneyval evaluation. 

Helme, who heads the governmental committee, said it's important to understand what actually took place in Estonian banking in  2007-2014 and why the various control mechanisms did not work well enough.

Helme said that with that in mind, he as the head the governmental committee a few weeks ago sent inquiries to all the more important institutions connected with supervision over our banks.

"At the meeting of the committee we discussed the responses received to date, and work towards that definitely will continue,"  Helme said.

As regards developing the legislative framework, the committee received an overview of the state of play in the transposition of the European Union's 5th Anti-Money Laundering Directive (AMLD V). The workgroups of the governmental committee as well as the market participants made their proposals concerning developing the legislative framework for the prevention of money laundering.  

Several necessary legislative initiatives, such as a steep increase in fines that can be meted out for money laundering to legal persons, are already under work, whereas in July a bill to amend the Money Laundering and Terrorist Financing Prevention Act will exit the ministry. All the legislative amendments that are important for the transposition of AMLD V must be approved by the Riigikogu still before the end of the year. 

The committee also received an overview of the state of play in the preparations for the domestic risk assessment and the Moneyval evaluation visit. The conduct of a domestic risk assessment is one of the prerequisites for successful passage of the new Moneyval evaluation.

The governmental committee for the prevention of money laundering and terrorist finance brings together officials from the Tax and Customs Board, the prosecutor's office, institutions of the police, the Bank of Estonia and the Financial Supervision Authority.