PPA's Financial Intelligence Unit to be made separate agency

The Financial Intelligence Unit (RAB) of the PPA is currently located in the same building as the Central Criminal Police.
The Financial Intelligence Unit (RAB) of the PPA is currently located in the same building as the Central Criminal Police. Source: Google Street View

The Financial Intelligence Unit (RAB) of the Police and Border Guard (PPA) is to become a separate agency in the area of governance of the Ministry of Finance, according to a decision of the government coalition.

Minister of Finance Martin Helme (EKRE) on Tuesday submitted bills for the relevant amendments to the Finance Committee of the Riigikogu so that they could be handled during discussions of the money laundering and terrorist financing prevention bill (130 SE). The new agency under the Ministry of Finance is to be established as of January 1, 2021.

"Deterring and preventing money laundering is very important priority for the government," Minister of Finance Mart Helme (EKRE) said according to a ministry press release. "The fact that Estonia was used in major money laundering cases in recent years was a painful lesson for us. We must make a serious effort to ensure that nothing like this happens again. We have already increased the funding of anti-money laundering agencies and expanded legislation. Among other things, we will strengthen penalties. In order to more effectively prevent money laundering and terrorist financing, I also consider changes to the institutional structure of the field necessary; we need increased focus."

The primary goal of bringing the RAB under the Ministry of Finance is to consolidate policy development and practical implementation in the field in one place.

"It is important for the state that the RAB is a strong partner for the Estonian financial sector," Helme said. "As an independent agency under the area of governance of the Ministry of Finance, in close cooperation with the Tax and Customs Board (MTA) and the Financial Supervision Authority, the prevention and deterrence of money laundering will certainly be more effective in the future. At the same time, we can thus also bring together the know-how necessary for the analysis of this very complex financial crime in the field of finance."

According to the ministry, the RAB is already responsible for tasks better suited to the area of governance of the Ministry of Finance, such as the supervision of the activities of obligated persons involved in anti-money laundering, the processing of applications for licenses in areas related to anti-money laundering as well as the suspending of business activities or licenses.

"Last year, the government decided to significantly increase the funding and staff of the RAB," Helme noted. "The establishment of a strategic analysis function in the unit has begun. The expertise needed to process data necessary for strategic analysis likewise already exists in the area of government of the Ministry of Finance, and increased synergy between these agencies will thus be an advantage."

The main emphasis in the fight against money laundering is increasingly shifting toward prevention activities, which is why the RAB needs to cooperate more closely with market participants as well as be a partner to them if needed, the ministry said.

Unit to see new responsibilities

Due to EU developments, the RAB will soon be tasked with new responsibilities, and in additional to conventional banking, the monitoring and analysis of developments in the field of financial technology (fintech) and virtual currencies will also become increasingly important. The Estonian state must keep up with global developments in the finance sector, and this step will certainly be an important, forward-looking one.

When transferring the RAB to the area of governance of the Ministry of Finance, however, it must be borne in mind that the RAB maintains a solid exchange of information and cooperation with the Central Criminal Police alongside the change.

"The tasks and role of the RAB in Estonian society will increase in the coming years, which is why we encourage all employees of the RAB to join us in this change, in order to fulfill these expectations with dedication," said Secretary General of the Ministry of Finance Veiko Tali. "We want the launch of the new agency to be as smooth as possible, and for the justified expectations of our current employees to be taken into consideration. Bringing [the unit] under the Ministry of Finance is also expected to simplify the recruitment of needed finance sector specialists for the further development of the RAB. The RAB is increasingly competing with the finance sector for staff."

Special attention will be paid to the international introduction of the proposed step, as it is necessary to ensure the preservation of the RAB's cooperation networks and membership in international organizations throughout the transition period and beyond.

After the Riigikogu has passed the amendments, a steering group is to be established under the leadership of the Ministry of Finance in order to smoothly coordinate the transition process.


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Editor: Aili Vahtla

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