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Money Laundering and Terrorist Financing Prevention Act

Passed 25 November 1998

(RT1 I 1998, 110, 1811),

entered into force 1 July 1999,

amended by the following Acts:

03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544;

19.06.2002 entered into force 01.09.2002 - RT I 2002, 63, 387;

05.06.2002 entered into force 01.07.2002 - RT I 2002, 53, 336;

14.11.2001 entered into force 01.02.2002 - RT I 2001, 93, 565;

18.10.2000 entered into force 17.11.2000 - RT I 2000, 84, 533.

Chapter 1

General Provisions

§ 1. Scope of application of Act

(1) This Act regulates the activities of credit institutions, financial institutions, the Financial Intelligence Unit and other agencies and persons in the prevention of money laundering and terrorist financing.

(2) The provisions of the Administrative Procedure Act (RT I 2001, 58, 354; 2002, 53, 336; 61, 375; 2003, 20, 117; 78, 527) apply to administrative proceedings prescribed in this Act, taking account of the specifications provided for in this Act.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 2. Money laundering

Money laundering is the acquisition, possession, use, conversion or transfer of, or the performance of transactions or operations with, property acquired as a result of a criminal offence or in return for participation in such an offence, the purpose or consequence of which is the concealment of the actual owner or the illicit origin of the property.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 21. Terrorist financing

Terrorist financing is the allocation or raising of funds to plan or perform acts which are deemed to be acts of terrorism within the meaning of the Penal Code (RT I 2001, 61, 364; 2002, 86, 504; 82, 480; 105, 612; 2003, 4, 22) or to finance the operation of terrorist organisations or in the knowledge that the funds allocated or raised will be used for the aforementioned purposes.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 3. (Repealed - 03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 4. Application of Act to credit and financial institutions

(1) This Act applies to all credit institutions operating in Estonia. For the purposes of this Act, a credit institution is a credit institution within the meaning of the Credit Institutions Act (RT I 1999, 23, 349; 2002, 17, 96; 21, 117; 23, 131; 53, 336; 63, 387; 102, 600; 105, 612; 2003, 17, 95; 23, 133; 81, 544) or a branch of a foreign credit institution which is entered in the commercial register in Estonia.

(2) This Act applies to all financial institutions operating in Estonia. For the purposes of this Act, a financial institution is:

1) a financial institution within the meaning of the Credit Institutions Act;

2) an insurer or insurance intermediary within the meaning of the Insurance Activities Act (RT I 2000, 53, 343; 2001, 43, 238; 48, 268; 59, 359; 87, 529; 93, 565; 2002, 35, 215; 63, 387; 102, 600; 105, 612; 2003, 17, 95);

3) a management company within the meaning of the Investment Funds Act (RT I 1997, 34, 535; 1998, 61, 979; 2000, 10, 55; 57, 373; 2001, 48, 268; 79, 480; 89, 532; 93, 565; 2002, 23, 131; 53, 336; 63, 387; 102, 600; 105, 612; 2003, 23, 133; 51, 355; 88, 591);

4) an investment firm, an operator of the regulated market or an operator of a securities settlement system within the meaning of the Securities Market Act (RT I 2001, 89, 532; 2002, 23, 131; 63, 387; 102, 600; 105, 612; 2003, 81, 544);

5) a savings and loan association within the meaning of the Savings and Loan Associations Act (RT I 1999, 24, 357; 2002, 3, 6; 53, 336).

(3) For the purposes of this Act, a branch of a foreign financial institution which is entered in the commercial register in Estonia is also deemed to be a financial institution.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 5. Application of Act to other persons

(1) In the cases provided by this Act, requirements for the prevention of money laundering which are equivalent to the requirements set for credit and financial institutions for such purposes shall also apply to the following persons:

1) providers of currency exchange services;

2) providers of cash transfer services;

3) organisers of gambling or lotteries;

4) persons who carry out or act as intermediaries in transactions with real estate;

5) persons who act as intermediaries in transactions involving precious metals, precious stones, works of artistic value or other valuable goods and who receive a fee exceeding 100 000 kroons for such services;

6) auditors and persons who provide consulting services in the field of accounting and taxation;

7) notaries, advocates and other persons who provide consulting services in the cases provided for in subsection (2) of this section;

8) other persons who, in the course of their business activities, carry out or act as intermediaries for transactions of at least the value specified in subsection 6 (5) of this Act.

(2) This Act applies to notaries, advocates and other persons who provide consulting services if they act directly on behalf of or for the benefit of their client in any monetary or real estate transaction or assist the client in planning or performing transactions which involve:

1) the transfer of real estate, shares or enterprises for a charge;

2) management of the client's money, securities or other assets;

3) the opening or administration of bank accounts, deposit accounts or securities accounts;

4) the acquisition of funds necessary for the foundation, operation or management of companies;

5) the foundation, operation or management of other companies or similar entities.

(3) For the purposes of this Act, a currency exchange service is the exchange of legal tender cash of one country for legal tender cash of another country.

(4) For the purposes of this Act, a cash transfer service is the acceptance of cash by an undertaking which is not a credit institution in order to forward the cash to a third party, or the payment of cash to a third party by such an undertaking on the basis of a mandate forwarded or made available thereto or the arrangement of such a payment.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

Chapter 2

Identification

§ 6. General identification requirement

(1) Credit and financial institutions are required to identify all persons or representatives of persons who carry out a non-cash transaction involving a sum of more than 200 000 kroons or a cash transaction involving a sum of more than 100 000 kroons.

(18.10.2000 entered into force 17.11.2000 - RT I 2000, 84, 533)

(2) A credit or financial institution is also required to identify any person who carries out a transaction where the value of the transaction is lower than a threshold specified in subsection (1) of this section if:

1) the transaction is apparently linked to another transaction or other transactions in such a manner that the value of the transactions exceeds a threshold specified in subsection (1) of this section. If the total value of the transactions is not known at the time when the apparently linked transactions are carried out, identification shall proceed as soon as it becomes known that the value of the transactions exceeds a specified threshold;

2) the credit or financial institution suspects that the money which is the object of the transaction is derived from criminal activity.

(3) When an account is initially opened or when a service provided by a credit or financial institution is used for the first time, provided that it is not necessary to open an account to use that service, a written contract shall be entered into with the person who carries out the transaction. Credit and financial institutions are required to identify all persons who become clients thereof, as well as the representatives of such persons. Credit and financial institutions shall verify the data used for identification at least once a year.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

(4) Accounts in credit and financial institutions shall be in the name of an account holder.

(18.10.2000 entered into force 17.11.2000 - RT I 2000, 84, 533)

(5) A person specified in subsection 5 (1) of this Act is required to identify, on the basis of documents specified in § 9 of this Act, all persons together with whom the person, upon carrying out a transaction or transactions which are clearly interconnected, receives, acts as an intermediary for or pays out more than 100 000 kroons in cash, more than 200 000 kroons in the event of a non-cash settlement, or more than 200 000 kroons in total as cash and non-cash payments in the event of both a cash and non-cash settlement for a transaction or for transactions which are clearly interconnected. This requirement does not apply to the transport of cash and securities.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

(6) Organisers of gambling are required to identify all persons who pay or receive, by a single transaction or by related transactions, an amount exceeding 15 000 kroons.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

(7) Providers of currency exchange services are required, when providing a currency exchange service, to identify all persons who wish to exchange, by a single transaction or related transactions, an amount exceeding 100 000 kroons.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

(8) Providers of cash transfer services are required, when providing a cash transfer service, to identify all persons who send or receive funds through them.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

(9) A person specified in clause 5 (1) 8) of this Act is deemed to have fulfilled the requirement provided in subsection (5) of this section if the person has identified the client at an earlier time in the course of a transaction, provided that such identification was performed not more than six months previously.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

(10) It is not necessary to identify a client if the client is a credit institution, a financial institution specified in clauses 4 (2) 2)–4) of this Act, or a branch of a foreign financial institution which is entered in the commercial register in Estonia, a firm of auditors, a law office or a notary's office which is registered or operating in a Member State of the European Union or in a state where equivalent requirements apply for the prevention of money laundering and the identification of clients.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

(11) The identification of persons by notaries shall be based on the provisions of this Act together with the specifications provided by the Notarisation Act (RT I 2001, 93, 564; 2002, 53, 336; 2003, 18, 100).

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 7. Specifications for identification

(1) A credit or financial institution or a notary, auditor or advocate may identify a person without being in direct contact with the person by:

1) using the information provided concerning the person by a credit institution, a financial institution specified in clauses 4 (2) 2)–4) of this Act or a branch of such a foreign financial institution which is entered in the commercial register in Estonia, provided that the credit or financial institution has been registered or is operating in a Member State of the European Union or in a state where equivalent requirements apply for the prevention of money laundering and the identification of clients;

2) using the information provided concerning the person by a law office, a notary's office or a firm of auditors, provided that the office or firm has been registered or is operating in a Member State of the European Union or in a state where equivalent requirements apply for the prevention of money laundering and the identification of clients.

(2) Subsection 6 (1) of this Act does not apply in the event of transactions performed between Estonian credit institutions.

(3) In order to establish a correspondent relationship with a foreign credit institution, a credit institution is required to obtain confirmation from the competent body of the host country of the counterparty concerning the legal capacity of and implementation of money laundering prevention measures by the foreign credit institution.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 8. Specifications for identification requirement upon entering into insurance contracts

(1) Insurers and insurance intermediaries are required to identify persons who pay cash in the following amounts pursuant to insurance contracts:

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

1) more than 14 000 kroons during a year as periodic premiums for one contract;

2) more than 35 000 kroons for a single premium contract;

3) more than 35 000 kroons as an advance payment of an insurance premium.

(2) Insurers and insurance intermediaries are required to identify persons who, on the basis of an insurance contract, receive a payment (surrender, insured sum) exceeding 14 000 kroons. Identification is also obligatory if a payment is made in parts with a total amount exceeding 14 000 kroons.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 9. Documents which are basis for identification

(1) In order to enable identification, a natural person or a representative of a legal person shall submit a document specified in subsection 2 (2) of the Identity Documents Act (RT I 1999, 25, 365; 2000, 25, 148; 26, 150; 40, 254; 86, 550; 2001, 16, 68; 31, 173; 56, 338; 2002, 61, 375; 63, 387; 90, 516; 2003, 13, 65; 15, 87; 78, 527), a valid driving licence issued in the Republic of Estonia, or a valid travel document issued by a foreign state. A copy shall be made of the pages of an identity document submitted to enable identification which contain the personal data and the pages with entries, and the copy shall be preserved.

(2) In order to enable identification, a legal person registered in Estonia or a branch of a foreign company registered in Estonia shall submit an extract from the corresponding registry card, and a foreign legal person shall submit an extract from the corresponding register or a copy of its certificate of registration. The document submitted in order to enable identification shall set out:

1) the name, area of activity, seat and address of the legal person;

2) the registration number;

3) the names, residences and personal identification codes (if they have personal identification codes) of the director and the members of the management board, and their authority in representing the legal person.

(21) An extract from the registry card need not be submitted if the credit or financial institution or a person specified in subsection 5 (1) of this Act has access to the data in the commercial register through a computer network.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

(3) A representative of a foreign legal person is required to submit a notarially certified or authenticated document containing authorisation in order to use the account of the legal person.

(14.11.2001 entered into force 01.02.2002 - RT I 2001, 93, 565)

(4) If the data or documents specified in subsections (2) and (3) of this section are not available, other notarially certified or notarially or officially authenticated documents shall be used for identification, and the credit or financial institution or the person specified in subsection 5 (1) shall carry out the transaction only if there is no reason to doubt the identity of the counterparty. If there is no reason to doubt the identity of the counterparty, other written data may be used for identification of a person without being in direct contact with the person.

(18.10.2000 entered into force 17.11.2000 - RT I 2000, 84, 533; 14.11.2001 entered into force 01.02.2002 - RT I 2001, 93, 565; 03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 10. Determination of real identity of person

(1) If, upon identification, there is good reason to suspect that a person is acting on behalf of or for the account of someone else, the credit or financial institution or the person specified in subsection 5 (1) shall obtain information as to the real identity of the person on whose behalf or for whose account the person is acting.

(05.06.2002 entered into force 01.07.2002 - RT I 2002, 53, 336; 03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

(2) If it is impossible to identify the person on whose behalf or for whose account another person is acting, the credit or financial institution or the undertaking specified in subsection 5 (1) is prohibited from carrying out the transaction. The credit or financial institution or the undertaking specified in subsection 5 (1) is also required to inform the Financial Intelligence Unit immediately of an expression of intention by the person to carry out a transaction or of a transaction which has already been carried out by the person.

(05.06.2002 entered into force 01.07.2002 - RT I 2002, 53, 336; 03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

Chapter 3

Data

§ 11. Registration of data

(1) Upon fulfilment of the requirement specified in § 6, a credit or financial institution shall register the following personal data:

1) the name and residence or seat of the person and, in the case of representation, the name and residence or seat of the representative;

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

2) the document used for identification, and the number and date and place of issue thereof;

(18.10.2000 entered into force 17.11.2000 - RT I 2000, 84, 533)

3) in the case of a natural person, the personal identification code or the date and place of birth of the natural person;

4) in the case of a legal person, information regarding the legal person obtained on the basis of subsection 9 (2) or (3).

(2) A credit or financial institution shall register the following data concerning a transaction to be carried out:

1) the type of transaction;

2) upon the opening of an account: the type of account, account number, currency or securities account;

3) upon the deposit of property: the deposit number, the market price of the property on the day of deposit or, if it is not possible to determine the market price of the specified property, an exact description of the property;

4) upon the renting and use of a safe deposit box: the number of the safe deposit box and other data necessary for identification of the user thereof;

(18.10.2000 entered into force 17.11.2000 - RT I 2000, 84, 533)

5) upon the making of a payment relating to shares, debt instruments or other securities: a description of the securities, the monetary value of the transaction, the currency and the account number;

6) upon entry into an insurance contract: the number of the account from which the first premium amount is debited;

7) upon the making of a payment on the basis of an insurance contract: the number of the account to which the payment is credited;

8) upon the transfer of money: data submitted by the person concerning the origin, sender and recipient of the money;

9) in the case of other transactions: the amount of the transaction, the currency and the account number or account numbers.

(3) For the purposes of identification, a person specified in subsection 5 (1) of this Act shall register the time of the transaction, a description of the transaction and information concerning the counterparty to the transaction pursuant to the provisions of subsection (1).

(18.10.2000 entered into force 17.11.2000 - RT I 2000, 84, 533; 03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

(4) A credit or financial institution has the right to refuse to carry out a transaction if a person does not submit documents certifying the legality of the source of the money or other property which is the object of the transaction despite a corresponding demand having been made.

(18.10.2000 entered into force 17.11.2000 - RT I 2000, 84, 533)

§ 12. Preservation of data

Credit and financial institutions and persons specified in subsection 5 (1) of this Act shall preserve data specified in § 11 for at least five years after the end of a contractual relationship with a client.

(18.10.2000 entered into force 17.11.2000 - RT I 2000, 84, 533; 03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

Chapter 4

Internal Security Measures of Credit Institutions and Financial Institutions

§ 13. Internal security measures

(1) The head of a credit or financial institution shall appoint a person to act as the contact person for the Financial Intelligence Unit (hereinafter contact person) and shall grant him or her the authority and provide him or her with the means needed to perform the duties of a contact person as specified in subsection 14 (1) of this Act.

(2) A person specified in subsection (5) 1) of this Act may appoint a contact person for the direct performance of duties related to the prevention of money laundering. If a person specified in subsection (5) 1) of this Act has not appointed a contact person, the duties of the contact person shall be performed by that person or by the head of the undertaking.

(3) The head of a credit or financial institution is required to establish a code of conduct for employees to prevent money laundering and terrorist financing, and to establish internal audit rules to monitor compliance with the code of conduct.

(4) Credit and financial institutions and persons specified in subsection 5 (1) of this Act shall guarantee regular training in the performance of the duties arising from this Act for employees who carry out cash and non-cash transactions.

(5) The provision of regular training in the performance of duties arising from this Act for officials or employees specified in subsection 15 (3) of this Act shall be guaranteed by the head of the corresponding agency or foundation.

(6) Requirements for the code of conduct to be established by credit and financial institutions, for the internal audit rules to monitor compliance with the code of conduct and for the application of such documents shall be established by the Minister of Finance.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 14. Contact person

(1) The duties of a contact person appointed by the head of a credit or financial institution are:

1) to monitor compliance with money laundering prevention requirements in the credit or financial institution;

2) to forward information to the Financial Intelligence Unit in the event of a suspicious transaction;

3) to inform the head of the credit or financial institution in writing of deficiencies in compliance with the internal audit rules.

(2) A contact person may only forward information or data which become known to him or her in connection with a suspicious transaction to:

1) the head of the credit or financial institution or an employee appointed by him or her;

(18.10.2000 entered into force 17.11.2000 - RT I 2000, 84, 533)

2) the Financial Intelligence Unit;

3) a preliminary investigation authority in connection with a criminal proceeding;

4) a court on the basis of a court ruling or court judgment.

Chapter 5

Conduct in Event of Suspicion of Money Laundering and Terrorist Financing

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 15. Notification obligation

(1) If, upon carrying out a transaction, a credit or financial institution or a person specified in subsection 5 (1) of this Act identifies a situation which might be an indication of money laundering, the institution or person shall promptly notify the Financial Intelligence Unit thereof. Information shall be forwarded orally, in writing or by electronic means of communication. If information is forwarded orally, the information shall be repeated in writing not later than by the end of the following working day.

(2) If, upon carrying out a transaction, a credit or financial institution identifies a situation which might be an indication of terrorist financing, the institution or person shall promptly notify the Financial Intelligence Unit thereof. The provisions of subsection (1) of this section apply to the forwarding of notification.

(3) If an official of an authority of executive power or a local government authority or an employee of a foundation who verifies the compliance of applications for irrecoverable financial aid granted by the state or monitors the use of such aid identifies a situation which might be an indication of money laundering or terrorist financing, the official or employee shall promptly notify the Financial Intelligence Unit thereof. Shared-cost aid financed from the Structural Funds of the European Union, from initiatives of the European Communities, from the Cohesion Fund or from the Guarantee Section of the European Agricultural Guidance and Guarantee Fund is also deemed to be irrecoverable financial aid provided by the state. Notification shall be forwarded pursuant to the procedure provided in subsection (1) of this section by the head of the agency unless there is good reason to inform the Financial Intelligence Unit directly.

(4) The notification obligation does not apply to notaries, auditors and advocates when evaluating the client's legal position or representing the client in a court proceeding or challenge proceeding, or to legal disputes in any other type of proceeding, including consultations provided regarding the initiation or avoidance of a proceeding, regardless of whether the information is obtained prior to, in the course of or after the conclusion of the proceeding.

(5) A person shall not be informed of any notification forwarded to the Financial Intelligence Unit concerning the person unless the Financial Intelligence Unit has suspended the transaction or imposed a restriction on the use of the person’s account.

(6) The Financial Intelligence Unit shall issue advisory guidelines regarding the characteristics of suspicious transactions. The guidelines shall be published on the web site of the Police Board.

(7) The format for notification to be forwarded to the Financial Intelligence Unit and instructions for the preparation thereof shall be established by the Minister of Internal Affairs. The data used for identifying the person or copies of relevant documents shall be appended to the notification. The format for notification to be forwarded to the Financial Intelligence Unit by advocates, notaries and auditors, the instructions for the preparation thereof and the list of documents to be appended thereto shall be established by the Minister of Internal Affairs, after having heard the opinion and proposals of the Estonian Bar Association, the Chamber of Notaries and the Board of Auditors.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 151. Suspension of transaction and restriction of use of account

(1) In the event of justified suspicion of money laundering or terrorist financing, the Financial Intelligence Unit may issue a precept to suspend a transaction or to impose restrictions on the use of an account for up to two working days as of receiving notification regarding a suspicion of money laundering or terrorist financing. In such case, the transaction may be carried out or the restriction on using the account may be removed earlier only with the written permission of the Financial Intelligence Unit. During the time that restrictions on using an account are in force, the credit or financial institution shall not execute any orders issued by the account holder for the use or disposal of the assets in the account.

(2) If postponement of a transaction could cause significant damage, the transaction shall be carried out and the information shall be communicated to the Financial Intelligence Unit in writing promptly thereafter.

(3) A credit or financial institution or any other person to whom this Act has assigned the obligation to notify regarding any suspicion of money laundering or terrorist financing (hereinafter person with a notification obligation) may inform a person of a precept issued by the Financial Intelligence Unit concerning the person once the precept has been complied with.

(4) An advocate, notary or auditor may inform a client that notification concerning the client has been forwarded to the Financial Intelligence Unit.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 152. Seizure and transfer of property to state ownership

(1) The Financial Intelligence Unit may, on the basis of a precept, seize property to ensure its preservation if

1) during verification of the source of the property in the event that there is a suspicion of money laundering, the owner or possessor of the property fails to submit evidence certifying the legality of the source of the property to the Financial Intelligence Unit within two working days as of the suspension of the transaction or as of the imposition of restrictions on the use of the account;

2) there are characteristics indicating terrorist financing.

(2) The Financial Intelligence Unit may seize property for a period of up to ten working days. Property may be seized for longer periods only if criminal proceedings have been commenced in the matter. In this case, property shall be seized pursuant to the procedure provided by the Acts regulating criminal procedure.

(3) The Financial Intelligence Unit shall release property from seizure after the expiry of the term specified in subsection (2) of this section. If the legality of the source of the property is verified before the term specified in subsection (2) of this section expires, the Financial Intelligence Unit is required to release the property from seizure immediately. If criminal proceedings have been commenced in the matter, a decision shall be taken on the release of the property from seizure pursuant to the procedure provided by the Acts regulating criminal procedure.

(4) The Prosecutor's Office or an investigative body may apply to an administrative court for permission to transfer property to state ownership if, within a period of one year as of the property being seized, it has not proven possible to establish the owner of the property and if the possessor of the property declares that the property does not belong to the possessor and relinquishes possession thereof. In the event where possession of movable property or immovable property is relinquished, the property shall be sold pursuant to the procedure provided in the Acts regulating enforcement procedure and the state shall receive the amount received from the sale. The owner of the property has the right to reclaim an amount equivalent to the value of the property within a period of three years as of the date on which the property is transferred to state ownership.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 16. Co-operation with Financial Intelligence Unit

(1) Credit and financial institutions and persons specified in subsection 15 (3) of this Act are required to inform the Financial Intelligence Unit of any suspicion of money laundering or terrorist financing and, on the basis of a precept of the Financial Intelligence Unit, to provide the Financial Intelligence Unit with information relating to the suspicion of money laundering or terrorist financing.

(2) The persons specified in subsection 5 (1) of this Act are required to inform the Financial Intelligence Unit of any suspicion of money laundering and, on the basis of a precept of the Financial Intelligence Unit, to provide the Financial Intelligence Unit with information relating to the suspicion of money laundering, unless otherwise provided by law.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 161. Verification of information relating to suspicion of money laundering or terrorist financing

The Financial Intelligence Unit shall verify information relating to any suspicion of money laundering or terrorist financing, take necessary measures to preserve property and, if elements of a criminal offence are detected, decide on forwarding the matter to a body competent to commence criminal proceedings.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 17. Relief from liability

(1) Persons with a notification obligation, employees thereof and persons acting on their behalf are not liable for damage which results from failure to carry out a transaction or from failure to carry out a transaction within the given term and which is caused to a client in connection with informing the Financial Intelligence Unit in good faith of a suspicion of money laundering or terrorist financing.

(2) The acts of persons with a notification obligation informing the Financial Intelligence Unit and forwarding relevant information thereto are not deemed to be breaches of the confidentiality requirement imposed on them by law or a contract and the liability prescribed by legislation or a contract for disclosing such information does not apply to such persons.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

Chapter 6

Financial Intelligence Unit

§ 18. Financial Intelligence Unit

(1) The Financial Intelligence Unit is an independent structural unit of the Central Criminal Police.

(2) The head of the Financial Intelligence Unit shall be appointed by the national police commissioner of the Police Administration on the proposal of the police chief of the Central Criminal Police.

(3) The Financial Intelligence Unit issues precepts and other administrative acts in order to perform the functions imposed on the Unit by law. An administrative act shall contain:

1) the given name, surname and position of the official who prepared the administrative act;

2) the date of issue of the administrative act;

3) the name and address of the addressee of the administrative act;

4) the factual and legal basis for the issue of the administrative act;

5) the precept issued by the administrative act or the decision of the issuer of the administrative act;

6) the term for compliance with the administrative act;

7) the sanctions imposed for or other consequences of failure to comply with the administrative act, or a warning regarding the application of coercive measures in the event of failure to comply with the administrative act;

8) a reference to challenge the administrative act;

9) other information provided by law.

(4) A precept issued on the basis of subsection 151 (1) of this Act shall not set out the factual basis for issue thereof. The facts on the basis of which a precept is issued shall be documented separately. The person whose transaction was suspended or the use of whose account was restricted by a precept has the right to examine the aforementioned materials. The Financial Intelligence Unit has the right to deny a request to examine a document if this would impede the prevention of money laundering or terrorist financing or hinder the truth from being ascertained in criminal proceedings.

(5) An administrative act of the Financial Intelligence Unit shall be signed by the head or deputy head of the Financial Intelligence Unit or by an official authorised by the head of the Financial Intelligence Unit. Upon signature by an authorised person, the number and date of the document granting the right of signature and the place where the document can be reviewed shall be indicated next to the signature.

(6) In the event of failure to comply with an administrative act, the Financial Intelligence Unit may impose a penalty payment pursuant to the procedure provided for in the Substitutive Enforcement and Penalty Payment Act (RT I 2001, 50, 283; 94, 580). The upper limit for a penalty payment for failure to comply with an administrative act is 20 000 kroons for the first occasion and 80 000 kroons for each subsequent occasion.

(7) The Financial Intelligence Unit has the right to issue advisory guidelines to explain legislation regulating the prevention of money laundering and terrorist financing.

(8) In order to prevent or identify money laundering or terrorist financing or criminal offences related thereto and in order to facilitate pre-trial investigation thereof, the Financial Intelligence Unit is required to forward significant information to the prosecutor, the investigative body and the courts in connection with court proceedings.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 19. Functions of Financial Intelligence Unit

The functions of the Financial Intelligence Unit are:

1) to collect, register, process and analyse information received pursuant to § 15 of this Act. In the course of these activities, the significance of the information submitted to the Financial Intelligence Unit for the prevention, identification or investigation of money laundering, criminal offences related thereto and terrorist financing shall be assessed;

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

2) to inform the persons who submit information to the Financial Intelligence Unit of the use of the information submitted for the purposes specified in clause 1) of this section in order to improve the performance of the notification obligation;

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

3) to conduct investigations into money laundering and terrorist financing, to improve the prevention and identification of money laundering and terrorist financing and to inform the public thereof;

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

4) to co-operate with credit and financial institutions, persons specified in subsection 5 (1) of this Act, investigative bodies and police authorities in the prevention of money laundering and terrorist financing;

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

5) to organise foreign relations and the exchange of information pursuant to § 24 of this Act;

6) to supervise the activities of persons specified in subsection 5 (1) of this Act in complying with this Act, unless otherwise provided by law.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

7) to conduct proceedings in matters of misdemeanours provided for in this Act.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 20. Requirements for officials of Financial Intelligence Unit

Officials of the Financial Intelligence Unit are required to maintain the confidentiality of information made known to them in the course of their official duties, including information subject to banking secrecy, even after the performance of their official duties or the termination of a service relationship connected with the processing or use of the information, and to comply with the personal data processing requirements provided by the Databases Act (RT I 1997, 28, 423; 1998, 36/37, 552; 1999, 10, 155; 2000, 50, 317; 57, 373; 92, 597; 2001, 7, 17; 17, 77; 24, 133; 2002, 61, 375; 63, 387; 2003, 18, 107; 26, 158) and the Personal Data Protection Act (RT I 1996, 48, 944; 1998, 59, 941; 111, 1833; 2000, 50, 317; 92, 597; 104, 685; 2001, 50, 283; 2002, 61, 375; 63, 387).

§ 21. Restrictions on use of information

(1) Information registered in the Financial Intelligence Unit shall only be forwarded to a preliminary investigation authority, the prosecutor or a court in connection with a court proceeding on the basis of a written request of the preliminary investigation authority, the Prosecutor’s Office or the court or on the initiative of the Financial Intelligence Unit if the information is significant for the prevention, establishment or investigation of money laundering or a criminal offence related thereto. The Financial Intelligence unit has the right to inform the supervisory authority specified in § 25 of this Act of a suspicious transaction in a credit or financial institution.

(18.10.2000 entered into force 17.11.2000 - RT I 2000, 84, 533)

(2) Only officials of the Financial Intelligence Unit shall have access to and the right to process the information in the Financial Intelligence Unit database.

(3) The procedure for the registration and processing of information collected by the Financial Intelligence Unit shall be established by the Minister of Internal Affairs.

§ 22. Requests for additional information

(1) If there is good reason to suspect money laundering or terrorist financing, the Financial Intelligence Unit has the right to request additional information concerning a suspicious transaction or transactions related thereto from a credit or financial institution, a person specified in subsection 5 (1) of this Act and the supervisory authority of the credit or financial institution.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

(2) The addressee of a precept is required to comply with the precept and to submit the requested information, including any information subject to banking secrecy, during the term prescribed in the precept. The information shall be forwarded in writing, by electronic means or orally.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

(3) In order to prevent money laundering, the Financial Intelligence Unit has the right to obtain, pursuant to the procedure provided by legislation, relevant information, including information collected by surveillance, from any agency engaged in surveillance. If the Financial Intelligence Unit wishes to forward information collected by surveillance which was submitted by an agency engaged in surveillance to other agencies, the Financial Intelligence Unit shall obtain written consent from the agency which submitted the information.

(18.10.2000 entered into force 17.11.2000 - RT I 2000, 84, 533)

(4) In order to prevent money laundering or terrorist financing, the Financial Intelligence Unit has the right to obtain relevant information, including accounting documents, from third parties whose connection with the transactions under investigation becomes evident in the course of the checks.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

(5) It is prohibited to demand additional information or documents from an advocate concerning a client of his or hers, except in cases where the notification submitted by the advocate to the Financial Intelligence Unit does not meet the established requirements, the required documents are not attached to the notice or the attached documents do meet the requirements.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 23. Interbase cross-usage of data

In order to perform the functions imposed on the Financial Intelligence Unit by law, the Financial Intelligence Unit has the right to make inquiries to and to receive data from state and local government databases and databases maintained by persons in public law, pursuant to the procedure provided by law.

(18.10.2000 entered into force 17.11.2000 - RT I 2000, 84, 533)

§ 24. International exchange of information

The Financial Intelligence Unit has the right to exchange information with foreign agencies which perform the functions of a financial intelligence unit.

(18.10.2000 entered into force 17.11.2000 - RT I 2000, 84, 533)

Chapter 61

(03.12.2003 entered into force 15.04.2004 - RT I 2003, 81, 544)

Registration of Providers of Currency Exchange Services

(03.12.2003 entered into force 15.04.2004 - RT I 2003, 81, 544)

§ 241. Registration of provider of currency exchange services

(1) Providers of currency exchange services are required to register themselves in the register of economic activities (hereinafter in this Chapter register) before commencing operations in the corresponding field.

(2) The provisions of the Register of Economic Activities Act apply to the registration procedure together with the specifications arising from this Act.

(03.12.2003 entered into force 15.04.2004 - RT I 2003, 81, 544)

§ 242. Registration application

(1) An undertaking which wishes to provide currency exchange services shall submit an application for registration (hereinafter application) to the authorised processor of the register containing at least the following information:

1) the name, registry code, address and other contact details of the undertaking;

2) the area of activity;

3) the address or addresses of the premises where the currency exchange services are to be provided;

4) the name and contact details of the person in charge of the currency exchange services, indicated separately for each of the premises where currency exchange services are to be provided as specified in clause 3) of this subsection;

5) the names, personal identification codes (or, in the absence thereof, the day, month and year of birth) and addresses of the places of residence of the members of the management body of the legal person;

6) the date of submission of the application, and a signature;

7) the name, official title and contact details of the person who signed the application.

(2) The person who signs and is authorised to submit the application is responsible for the correctness of the information presented therein.

(3) The formal requirements for and the procedure for submission of such applications and applications for the amendment of registration information shall be established by the Minister of Economic Affairs and Communications.

(03.12.2003 entered into force 15.04.2004 - RT I 2003, 81, 544)

§ 243. Registration

(1) A registration shall be made on the basis of the information presented by a person in the application specified in § 242 of this Act within five working days as of receipt of the application and the response specified in clause 2) of this subsection, provided that:

1) the application meets the requirements;

2) the response to an enquiry submitted by the authorised processor of the register to the authorised processor of the Punishment Register reveals that no circumstances specified in clauses 242 (1) 2) or 3) of this Act exist regarding the applicant.

(2) The following shall be entered in the register:

1) the registration number;

2) the date on which the registration is made;

3) the activity permitted on the basis of the registration;

4) the person’s name, registry code, address and other contact details;

5) the name(s) and contact details of the person(s) responsible for the provision of currency exchange services;

6) the address or addresses of the premises where the currency exchange services are to be provided.

(3) Information entered in the register shall be published on the web site of the register.

(4) An undertaking which has been registered shall promptly inform the authorised processor of the register of any changes in the information submitted thereby in an application.

(5) An official authorised by the registrar shall make an officially certified extract from the registration information if an undertaking so requests.

(03.12.2003 entered into force 15.04.2004 - RT I 2003, 81, 544)

§ 244. Refusal to register

(1) Registration may be refused if:

1) the registration application does not meet the requirements or false information has been submitted;

2) the response to an enquiry submitted to the Punishment Register reveals that the undertaking which is the applicant for registration or a person specified in clauses 242 (1) 4), 5) or 7) of this Act has been punished for a criminal offence specified in §§ 394–396 and 2371 of the Penal Code and the term specified in subsection 25 (1) of the Punishment Register Act (RT I 1997, 87, 1467; 2002, 82, 477; 2003, 26, 156) has not expired;

3) the response to an enquiry submitted to the Punishment Register reveals that compulsory dissolution has been imposed on the legal person which is the applicant for registration for any criminal offence or that an occupational ban in the given area of activity has been imposed on the sole proprietor who is the applicant for registration for any criminal offence.

(03.12.2003 entered into force 15.04.2004 - RT I 2003, 81, 544)

§ 245. Deletion of registration information

(1) Registration information shall be deleted within five working days:

1) as of the submission of a corresponding application by the undertaking concerning which the registration was made, and on the basis of that application;

2) as of receipt of the relevant information if the registered undertaking or the person specified in clause § 242 (1) 4), 5) or 6) of this Act has been punished for a criminal offence specified in clause § 242 (1) 2) of this Act;

3) as of receipt of the relevant information if compulsory dissolution has been imposed on the registered legal person or an occupational ban in the given area of activity has been imposed on the registered sole proprietor for any criminal offence;

4) as of the date of the relevant facts being established if false information was knowingly submitted in the registration application.

(03.12.2003 entered into force 15.04.2004 - RT I 2003, 81, 544)

Chapter 7

Supervision

§ 25. Supervision over credit and financial institutions

(1) The supervisory authority specified in the Act regulating the activities of credit and financial institutions shall monitor compliance by credit and financial institutions with the requirements of this Act and of legislation established on the basis thereof.

(2) If, upon monitoring a credit or financial institution, a supervisory authority identifies a situation which might be an indication of money laundering, the supervisory authority is required to notify the Financial Intelligence Unit thereof.

§ 26. Data protection supervision

The data protection supervisory authority established pursuant to the Personal Data Protection Act shall exercise supervision over the legality of the processing of information registered in the Financial Intelligence Unit.

Chapter 71

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

Liability

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 261. Violation of requirement to register and preserve data

(1) Violation of the requirement to register and preserve data provided for in the Money Laundering Prevention Act is punishable by a fine of up to 100 fine units.

(2) The same act, if committed by a legal person, is punishable by a fine of up to 20 000 kroons.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 262. Failure to submit and late submission of mandatory information

Failure on the part of an employee of a credit or financial institution or an employee of a person specified in subsection 5 (1) of this Act to submit mandatory information provided for in the Money Laundering Prevention Act to the contact person or head of the institution, or failure to submit such mandatory information on time, is punishable by a fine of up to 200 fine units.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 263. Failure to apply internal security measures

Failure to apply the internal security measures provided for in the Money Laundering Prevention Act or failure on the part of the head of a credit or financial institution to appoint a contact person is punishable by a fine of up to 200 fine units.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 264. Unlawful notification of information submitted to Financial Intelligence Unit

Unlawful notification of a person concerning whom notification has been submitted to the Financial Intelligence Unit or of third parties by the head or a contact person of a credit or financial institution or by another person acting on behalf of such an institution or by a person specified in subsection 5 (1) of this Act or an employee thereof regarding information submitted to the Financial Intelligence Unit is punishable by a fine of up to 300 fine units.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 265. Failure to comply with identification requirement

(1) Failure on the part of an employee of a credit or financial institution or on the part of another person or agency or an employee thereof to comply with the identification obligation provided for in the Money Laundering and Terrorist Financing Prevention Act is punishable by a fine of up to 300 fine units.

(2) The same act, if committed by a legal person, is punishable by a fine of up to 50 000 kroons.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 266. Failure to report suspicion of money laundering or terrorist financing and submission of incorrect information

(1) Failure on the part of the head or contact person of a credit or financial institution or another person to report a suspicion of money laundering or terrorist financing or submission of incorrect information thereby to the Financial Intelligence Unit is punishable by a fine of up to 300 fine units.

(2) The same act, if committed by a legal person, is punishable by a fine of up to 50 000 kroons.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 267. Violation of registration obligation by provider of currency exchange services

Violation of the registration obligation or the obligation to submit an application for the amendment of registration information or the obligation to give notification of the termination of activities established for providers of currency exchange services is punishable by a fine of up to 50 000 kroons.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 268. Proceedings

(1) The provisions of the Penal Code apply to the misdemeanours provided for in §§ 261–267 of this Act.

(2) Extra-judicial proceedings concerning the misdemeanours provided for in §§ 261–267 of this Act shall be conducted by:

1) police prefectures;

2) the Financial Supervision Authority;

3) the Financial Intelligence Unit.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

Chapter 8

Implementing Provisions

§ 27. Amendment of Credit Institutions Act

The Credit Institutions Act (RT I 1995, 4, 36; 1998, 59, 941) is amended as follows:

1) clause 46 (4) 2) is amended and worded as follows:

«2) to a pre-trial investigation authority on the basis of a ruling on commencement of criminal proceedings;”;

2) Chapter 7 is repealed.

§ 28. Entry into force of Act

This Act enters into force on 1 July 1999.

§ 29. Registration obligation of undertakings engaged in provision of currency exchange services

Undertakings engaged in the provision of currency exchange services which intend to continue operating in the corresponding field are required to submit, by 15 April 2004, an application for the registration of the undertakings and their premises pursuant to the provisions of this Act.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

§ 30. Obligation to check existing correspondent relationships

Each Estonian credit institution is required to obtain, by 1 January 2005, confirmation from the competent body of the host country of each foreign credit institution which is a counterparty to a correspondent relationship regarding the legal capacity of and implementation of measures by the foreign credit institution preventing money laundering and terrorist financing. The correspondent relationship shall be terminated if confirmation is not received.

(03.12.2003 entered into force 01.01.2004 - RT I 2003, 81, 544)

1 RT = Riigi Teataja = State Gazette