Estonia – Know Your Customer (KYC) Rules

 

 

Estonia has one of the most developed banking systems of the eastern European Union (EU) countries. Estonia has adopted the universal banking model, which enables credit institutions to participate in a variety of activities such as leasing, insurance, and securities. Transnational and organized crime groups are attracted to the territory due to its location between Eastern and Western Europe. The drug situation in Estonia is similar to that in other EU Member States in the region. Analysis of suspicious transaction reports (STRs) disclose some incidents of transferring the proceeds of Internet crime to Estonia.

KNOW-YOUR-CUSTOMER (KYC) RULES:

 

Enhanced due diligence procedures for PEPs:

 

PEP is an abbreviation for Politically Exposed Person, a term that describes a person who has been entrusted with a prominent public function, or an individual who is closely related to such a person. The terms PEP, Politically Exposed Person and Senior Foreign Political Figure are often used interchangeably

    • Foreign PEP: YES
    • Domestic PEP: YES

Estonia – KYC covered entities

 

The following is a list of Know Your Customer entities covered by Estonian Law:

    • Credit and financial institutions
    • Lottery/gambling institutions
    • Real estate firms
    • High value goods traders
    • Pawnbrokers
    • Auditors and accountants
    • Accounting and tax advisors
    • Providers of trust fund and business association services
    • Notaries, attorneys, bailiffs, and trustees and interim trustees in bankruptcy

Estonia – Suspicious Transaction Reporting (STR) Requirements:

 

Number of STRs received and time frame: 4,317 from January to October 2011

Number of CTRs received and time frame: 5,449 from January to October 2011

The following is a list of STR covered entities covered by Estonian Law:

    • Credit and financial institutions
    • Lottery/gambling institutions
    • Real estate firms
    • High value goods traders
    • Pawnbrokers
    • Auditors and accountants
    • Accounting and tax advisors
    • Providers of trust fund and business association services
    • Notaries, attorneys, bailiffs, and trustees and interim trustees in bankruptcy

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

 

Prosecutions: 59 from January to October 2011
Convictions: Eight cases involving 33 persons from January to October 2011

 

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

On January 1, 2011, Estonia joined the euro zone. Estonia has worked to bring its anti-money laundering regime into compliance with international standards. In 2010 Estonia addressed domestic payment services by enforcing the Financial Institutions and e-Money Institutions Act.
The Estonian penal code establishes asset seizure and forfeiture, with special provisions for money laundering. Estonia established an Asset Recovery Unit under the FIU to concentrate on organized crime, detecting criminal assets from serious crimes, and identifying criminal assets transferred to foreign countries.