According to the draft law amending the Identity Documents Act and related laws, the interior minister will be authorized to establish a list of high-risk countries by regulation, as well as determine specific exceptions for issuing e-resident digital IDs to citizens of these countries, the explanatory memorandum states.

Elen Kraavik, an adviser at the Ministry of the Interior's border guard and migration policy department, explained to ERR that the proposed restrictions are prompted by concerns raised during an evaluation by MONEYVAL, the Council of Europe's committee of experts on the assessment of anti-money laundering measures and the financing of terrorism. MONEYVAL highlighted that Estonia grants e-residency to citizens of third countries with which Estonia does not have strong cooperation, making it difficult to thoroughly verify their backgrounds when necessary.

"For example, if there is an issue and we want to ask the relevant authorities in the person's home country about them, we may not receive answers, meaning we don't really know who this person is, what their background is or what they do," she described. According to Kraavik, MONEYVAL suggested that Estonia should reassess its risks and how it ensures, as a state, that it knows to whom it is issuing its documents.

"And since the topic of high-risk countries had already come up repeatedly, especially in connection with the war in Ukraine initiated by Russia, we decided to take this matter more seriously and implement stricter measures, allowing us to refuse e-residency to citizens of certain countries based on legal grounds," Kraavik said.

The Ministry of the Interior's representative acknowledged that Estonian authorities have identified cases where attempts were made to exploit the e-residency program, using it as a gateway for immigration into the European Union via Estonia.

"For example, there are advertisements on Iranian websites, accessible on the public web, promoting the Estonian e-residency program as a way to live in the European Union, which is completely untrue. In that sense, we were, of course, prepared and mature enough to consider these risks more seriously," she said.

Kraavik also emphasized that there has been a growing readiness within Estonia to address these issues more thoroughly.

"In the beginning, e-residency was a novel and innovative program that everyone eagerly embraced. Now, however, the program has matured, and there's a greater focus on carefully evaluating the risks, particularly given the current security situation," she explained.

List of countries from the Financial Intelligence Unit

Kraavik explained that the list of high-risk countries, whose citizens are generally not granted e-residency, will not be included in the law itself but will be established by regulation.

The list will be based on various lists of countries associated with money laundering and terrorism financing risks, primarily the list published by the Estonian Financial Intelligence Unit (FIU). "The FIU constantly reviews the EU and FATF (Financial Action Task Force) risk country lists – these serve as our basis. We haven't acted arbitrarily; our approach is primarily driven by security considerations," she said.

As of September 18, according to the FIU website, the countries with a higher risk of terrorism financing, based on EU and FATF data, include Afghanistan, the United Arab Emirates, Burkina Faso, Iran, Yemen, the Democratic Republic of Congo, South Sudan, Nigeria, Mali, North Korea and Syria. In addition, Estonia's competent authorities have added several other countries to the list, including Algeria, Egypt, Iraq, Jordan, Kyrgyzstan, Lebanon, Libya, Morocco, Mozambique, Niger, Pakistan, the Palestinian Authority, Saudi Arabia, Somalia, Sudan, Tunisia, Tajikistan, Turkey, Turkmenistan, Uzbekistan and specifically Russia's North Caucasus Federal District. In total, the list comprises 32 countries or territories.

Separate ban for Russia and Belarus

Russian and Belarusian citizens have already been under special scrutiny in Estonia since Russia's full-scale aggression against Ukraine began in February 2022. As a result, new e-residency documents are no longer issued to citizens of these countries. Additionally, there is heightened scrutiny when it comes to extending already issued digital IDs.

"If we have previously issued a digital ID to a Russian or Belarusian citizen and they submit a renewal application, we critically review whether it is possible to issue it again," Kraavik explained.

Kraavik emphasized that the requirements for Russian and Belarusian citizens are stricter than for others. "If a digital ID has been issued to them before, we don't automatically refuse; instead, we thoroughly review their activities, who they are, and conduct a more rigorous background check, consulting with security agencies," she described. "In the future, they will also need to have verifiable, ongoing business activities in Estonia, with a registered company here. Plus, when they submit a renewal request, we will assess their behavior, the background information we have on them, and then determine whether we are willing to reissue the document."

In September, ERR reported that the number and proportion of e-residents from Russia and Belarus have sharply decreased since the start of the war. Before Russia's aggression and the subsequent restrictions on e-residency, 8.5 percent of valid Estonian e-residency cards were held by Russian and Belarusian citizens. By the end of summer 2024, this figure had dropped to 5 percent.

In March 2022, 4,421 Russian citizens and 902 Belarusian citizens held e-residency. However, as of September 23, 2024, the number had decreased to 2,473 Russian and 565 Belarusian e-residents, representing a 42 percent drop over two and a half years.

Currently, a total of 59,644 foreign nationals hold Estonian e-residency.

Entry into force expected post haste

Elen Kraavik explained that the draft bill has already undergone two rounds of approval and is now awaiting the signature of the interior minister, after which it will be submitted to the government.

"Once it is sent to the government, we will wait to see at which session the government is ready to discuss our bill, and then the legislative process will move forward," she said. "We are very hopeful that, if at all possible, we would like to see the bill passed and come into force by the end of this year or the beginning of next year, as quickly as possible."

The ministry official confirmed that the necessary developments and preparations for implementing the legal changes – within both the Police and Border Guard Board and the ministry's IT center – have already been completed.

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