Finland – Know Your Customer (KYC) Rules

 

 

Finland is not a regional center for money laundering, financial crime or illegal commerce. Over the past decade, Finland repeatedly has placed first or second on Transparency International‘s Corruption Perceptions Index (CPI). The major sources of illegal proceeds in Finland relate to financial crimes, and the majority of suspicious financial activities investigated have an international dimension. These funds are normally laundered through currency exchangers and gambling establishments. The number of organized crime groups has grown slightly in the past few years, as has the number of their members. Terrorism related fund-raising, to the extent it exists, appears to be less of a problem than in other European countries.

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

Finland – KYC covered entities

 

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

    • Credit and financial institutions
    • Investment firms, fund management companies and custodians
    • The central securities depository and book entry registrars
    • Payment institutions and money remitters
    • Insurance companies, local mutual insurance associations, and insurance intermediaries
    • Authorized pension insurance companies
    • Apartment rental agencies and real estate agents
    • Auditors, lawyers, notaries, and accountants
    • Pawn shops and dealers in high value goods
    • Casinos and gaming entities

Finland – Suspicious Transaction Reporting (STR) Requirements:

 

Number of STRs received and time frame: 14,213 from January to June 2011

Number of CTRs received and time frame: Not applicable

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

    • Credit and financial institutions
    • Investment and fund management companies
    • Insurance brokers and insurance companies
    • Apartment rental agencies and real estate agents
    • Pawn shops
    • Betting services
    • Casinos
    • Non-bank financial institutions
    • Management companies
    • Custodians of mutual funds
    • Auditors
    • Auctioneers
    • Lawyers
    • Notaries
    • Accountants
    • Dealers in high value goods
    • Money remitters
    • Tax advisory and financial management services
    • Repossession agents and bankruptcy ombudsmen

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

 

Prosecutions: One in 2010
Convictions: One in 2010

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The Government of Finland (GOF) has a comprehensive anti-money laundering/counter-terrorist financing regime. It should continue to enhance its laws and regulations as necessary to adhere to international standards.

Amendments to the scope of the money laundering offense entered into force on June 1, 2011, based on the recommendations of an inter-ministerial working group. The amendments add possession of criminal proceeds to the essential elements of money laundering and include negligent money laundering within the scope of criminal liability of a legal person.

The fact self-laundering of funds is not a crime in Finland, and that it is not possible to prosecute for self-laundering, has an impact on the low number of cases. Individuals suspected of laundering money are often convicted for other crimes. A working group was appointed by the Ministry of Justice in December 2010 to consider criminal sanctioning of self-laundering. The group released its report on May 31, proposing criminalization of self-laundering in the most severe cases. The amendment proposal was circulated for comments. With the comments completed, it could take several months or even up to a year before the amendment comes up for a vote.

The financial intelligence unit has the ability to freeze a transaction for up to five business days in order to determine the legitimacy of the funds. Funds can remain frozen for an extended period when linked to a criminal investigation. According to the Coercive Measures Act, all restraining and freezing orders must be presented to the court every four months. A new order can be given for a “reasonable time”, but it is yet unclear how long that time can ultimately be.