Estonia's FIU Acknowledges Challenges in Money Laundering Cases: Calls for Improvement

Estonia's Financial Intelligence Unit (FIU) has openly criticized itself, acknowledging "significant room for improvement" in handling money laundering cases. In the foreword of the 2023 Yearbook, Matis Mäeker, the FIU's head, lamented the lack of consequences for individuals involved in financial fraud and money laundering.

“The FIU itself has significant room for improvement: it is certainly unsatisfactory that only 11 new criminal proceedings were initiated out of approximately 150 disclosures,” he said.

“Last year, no sentences of imprisonment were imposed for money laundering."

Established in 1999, the Estonian FIU became an autonomous state agency under the Ministry of Finance's jurisdiction in 2021. Mäeker noted that by the end of 2023, recruitment for vacant positions was nearly complete, and the organization was close to operating at full capacity. Despite some successes in implementing financial sanctions and supervision, enforcement and securing convictions remained problematic.

In 2023, four county court judgments convicted 14 individuals of money laundering in Estonia, resulting in the confiscation of assets totaling over €668,000 and $37,000. However, none of the accused received actual prison sentences, as all cases were resolved through compromise procedures in court. The FIU highlighted a common pattern in these cases, where business email compromise fraud served as the predicate offense for money laundering.

“In such a case, the criminal offender has obtained email addresses and telephone numbers that resemble the originals as closely as possible,” it said.

The FIU warned of the high risk of cross-border money laundering in Estonia and emphasized the risks associated with cash transactions. Despite the rise of electronic payment methods, criminals still prefer cash, especially for large-scale transactions. The FIU flagged a potential increased risk of money laundering linked to economic and other criminal activities, particularly with the resurgence of cash transactions in Estonia following the decline during the Covid pandemic.

“Nearly four times more cross-border cash transactions are reported in the incoming direction to Estonia than in the outgoing direction.”

The FIU's candid assessment underscores the challenges in combatting money laundering and calls for concerted efforts to address these issues effectively.

By fLEXI tEAM