Prompted by the ongoing Danske Bank case, an analysis and a set of proposals aimed at improving the effectiveness of the fight against money laundering drawn up by the Anti-Money Laundering Government Committee were presented to the Estonian government on Thursday.
The report includes overviews from the Financial Supervisory Authority, Financial Intelligence Unit and the Prosecutor's Office in connection with the Danske case and an analysis of relevant legal framework, institutional capacities and court cases. The most important part of the report is comprised of a set of proposals regarding how to further strengthen Estonia's anti-money laundering capabilities, the Ministry of Finance said.
The report notes, for instance, that Danske customers with a high risk of money laundering were allowed to conduct settlements via the bank's Estonian branch over a long period of time and in an escalating fashion without the customer having to exhaustively explain the origin of the assets or their purpose, or identify their ultimate beneficiary. It says that the exploitation of the Estonian financial system for that purpose could have been prevented by effective action by the relevant authorities of the bank's country of domicile or Estonia.
The report summary also mentions that money laundering at Danske's Estonian branch was halted by the Estonian authorities first and foremost thanks to the actions of the Financial Supervisory Authority in 2014-2015, when an on-site spot check was conducted and a corresponding injunction issued.
The committee proposed that a restriction on the use of assets and administrative seizure based on reverse burden of proof be introduced in Estonia in the event of a suspicion of money laundering or the financing of terrorism.
The proposals also call for a reform of misdemeanour punishments in the field of finance, updating the methodology of domestic risk assessment in connection with money laundering, the launch of a register of bank accounts to the full extent, and the allocation of additional funds to the Financial Intelligence Unit and the Prosecutor's Office for combating money laundering.
Ratas: We have to learn from Danske case
According to Prime Minister Jüri Ratas (Centre), it is important for Estonia to learn from the Danske case as a state, and the report presented to the government will help achieve that goal.
"We have to understand why and how it was possible for so many suspicious transactions to take place, and how to prevent that in the future," Mr Ratas said. "In order to be successful in combating money laundering, we must have both functioning rules as well as compliance and sufficient oversight."
Minister of Finance Toomas Tõniste (Pro Patria) said that the committee's report includes very practical proposals and actions with which one can move forward at once, both with a short- and a long-term perspective.
"Even though our legislation and the capabilities of Estonia's institutions have made significant progress since the Danske case, a lot remains to be done in order to successfully address new international risks," Mr Tõniste said, naming the spread of digital solutions as an example. The definition itself of money laundering likewise needs to be reviewed, as it does not work in the event of money laundering abetted by a foreign state.
Chaired by the Minister of Finance and co-chaired by the Secretary General of the Ministry of Finance, the 14-member Anti-Money Laundering Government Committee brings together the secretaries general of the government ministries responsible for related fields, representatives from the Financial Intelligence Unit, the Bank of Estonia, and the Financial Supervision Authority, as well as officials from other relevant agencies and government institutions.
Editor: Aili Vahtla