The government agreed on Thursday (February 18) to terminate the €3 million legal advisor contract agreement with US law firm Freeh Sporkin & Sullivan LLP. The Estonian prosecutor's office will now take the lead in money laundering investigations.
A spokesperson for the Ministry of Finance confirmed the move.
Minister of Finance Keit Pentus-Rosimannus (Reform) said Estonia's investigation and oversight institutions have good and direct contacts with their U.S. partners and active cooperation in the framework of money laundering investigations is taking place.
Information exchanges related to money laundering investigations have already taken place and will take place in the future by means of direct communication between the institutions of the two countries. Additionally, Estonia will send a justice attache to work in the U.S.
One of the most important tasks for the justice attache will be to represent and defend the interests of the Estonian state in large money laundering investigations, in order for Estonia to possibly be part of the sharing of penalties in the future.
As of Thursday, Estonia had paid €581,500 to Freeh Sporkin & Sullivan LLP. The money freed up by ending the agreement will be used to conduct anti-money laundering activities.
The agreement was originally brokered by former Minister of Finance Martin Helme (EKRE) in June 2020 and was opposed by the then-opposition Reform Party and Social Democratic Party from the start.
Freeh, who was FBI director during the Bill Clinton administration, was tasked with representing Estonia at money laundering hearings in New York State connected with Danske Bank, to obtain a cut of any damages which may arise and to help protect Estonia's international image.
The deal immediately caused 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 channelled funds via Danske Estonia.
Prime Minister Kaja Kallas (Reform) said during coalition negotiations last month: "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."
Editor: Helen Wright