Estonia mulls money-laundering law

Oct 18, 2007
From wire reports

TALLINN - The Estonian government discussed a bill Oct. 18 designed to prevent money laundering and terrorism and approved it for presentation to parliament.

The aim of the draft legislation is to create a system of measures to prevent terrorist activities with a view to protecting the reliability of the country's financial sector and whole economic space.

The Finance Ministry said the law will expand the circle of persons who in their economic, professional and official activity are obliged to observe the requirements of the Money Laundering and Terrorist Financing Prevention Act.

This category includes all banks and providers of financial services, gaming operators, real estate brokers, pawnbrokers, auditors and providers of book-keeping and consulting services.

The obligation expands to all traders in cases of receiving a cash payment of more than 200,000 kroons (EUR 12,780) or the equivalent in some other currency, and in certain cases also to notaries public, lawyers, bailiffs, bankruptcy trustees and providers of other legal services.

The bill provides more detailed regulations for the identification of customers than the present law.

"This means, for instance, that providers of express SMS loans will in the future have to identify the borrower on the basis of a document," Finance Minister Ivari Padar explained. "The possibility of somone being cheated out of their money by an SMS loan will thereby disappear."

A new requirement is that obligated persons except for credit institutions will have to alert the money-laundering information bureau of each transaction involving a cash payment exceeding 500,000 kroons. The obligation applies to credit institutions only in case they operate in essence as money changers.

A significant change concerns the obligation of registration in the register of economic activities. The bill prescribes that all providers of financial services not subject to monitoring by the Financial Supervision Authority must be entered in the register. This includes providers of express loans.

All member states of the European Union are supposed to introduce similar requirements into their national legislation by Dec. 15.

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