Kallas told ETV news show "Aktuaalne kaamera" (AK) Friday night that: "We discussed the need to investigate if there are large penalties [for terminating the agreement between Freeh and the Estonian state].

"If there are no penalties and additional costs, we will terminate this contract. If there do end up being additional costs incurred, we need to weigh up how much these costs will be, compared with the outcome," Kallas went on.

Former education minister Mailis Reps, who is heading up Center's negotiating team, noted that work was needed to erase Estonia's more recently acquired, less welcome, image as a potential money laundering facilitator.

Reps said: "We are continuing to work hard to clean up the image of being a money laundering country; we take this very seriously."

Danske Bank case tarnished Estonia's international reputation some

Reps was referring to the Danske Bank scandal, which saw the Danish bank's Tallinn branch close late in 2019 after revelations became public that the office was likely the conduit of up to €230 billion in potentially illicit funds, mostly originating in the Russian Federation, in the period 2007-2015.

Similar, smaller, but still billion-euro scandals hit the country's Swedbank and SEB operations.

Outgoing finance minister Martin Helme (EKRE) hired Louis Freeh, who was FBI director during the Bill Clinton administration, in late June/early July 2020, though the deal, more accurately involving hiring Freeh's law firm, Freeh, Sporkin & Sullivan, though he promptly stepped down as a partner, only became public knowledge around a month later. Freeh has been tasked with representing Estonia at money laundering hearings in New York State, connected with Danske, with a view to obtaining a cut of any damages which may arise, and also to help with Estonia's international image.

The €3-million deal immediately hit controversy, partly due to the clandestine nature in which it was negotiated, but primarily because of allegations Freeh had acted for Russian money launderers, including those who allegedly would have chanelled funds via Danske Estonia.

Reps: AML regulations should not be too restrictive

Mailis Reps qualified her words on anti-money laundering (AML) regulations strengthening while appearing with the leader of the pro-free-market Reform Party, by saying these need not be too stringent.

"It is important to bear in mind that AML measures have sometimes become very strong disincentives to business," she said.

The Kallas-Reps/Reform-Center talks are ongoing. While Kallas, appointed to form a new coalition by President Kersti Kaljulaid, has nearly two more weeks to do so, the pandemic situation means a deal is likely to be struck sooner. This would then need to be voted on at the Riigikogu and, if it passed, only formalities would be left in setting up a new Reform-Center coalition.

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