Experts from the International Monetary Fund (IMF) gave a positive opinion of the anti-money laundering work done by Finantsinspektsioon. Money laundering risks have been substantially reduced in Estonia in the past five years and the cases that have been discussed in public all date back to the past. In 2014 non-resident deposits were some 19% of the total deposits in banks, but at the end of 2019 they were only 10%, and the structure of non-residents had become much less risky.
“The good opinion of the IMF about the efforts of Finantsinspektsioon in combating money laundering shows that our team has done very good work and done it effectively. We are fully taking on board the professional recommendations from the IMF specialists so we can make our work even better”, said Chair of the Finantsinspektsioon Management Board Kilvar Kessler.
The IMF noted that Finantsinspektsioon was among the first financial supervisors to take a risk-based approach to its anti-money laundering work, and it has introduced the routines that this approach needs for on-site and remote inspections. The IMF said that Finantsinspektsioon makes active use of measures to explain to market participants what their anti-money laundering duties are, and if necessary to oblige them to meet those requirements. As part of its supervisory work, Finantsinspektsioon carried out 29 on-site inspections in 2014-2018 that looked at combating money laundering, and 84 remote inspections in the past four years. The IMF experts observed that on-site inspections are resource-intensive and so only a limited number of them can be made each year. They said that anti-money laundering work could be made even more efficient if Finantsinspektsioon were to focus more on risk-based and targeted inspections or take on additional staff to handle anti-money laundering.
Through its supervisory work, Finantsinspektsioon is responsible for the stability and credibility of the financial sector. This means that it assesses how well aligned the capital, management and organisation of the banks and their risk controls are with the legislation, their business models and their risks. Combating money laundering is not the primary focus of the financial supervisor, but it has been a strategic priority for Finantsinspektsioon since 2014.
The Financial Intelligence Unit receives and analyses information about possible money laundering and follows criminally acquired income, while individual criminal cases are handled by the prosecutor and the police. One important safeguard against money laundering is that market participants should have a properly designed and functioning organisation and should comply fully with all legal requirements.
The report on the 2019 Article IV consultation of the International Monetary Fund can be found on Eesti Pank homepage.