Press release
11.06.2021
"2020 was a very busy year for the Financial Intelligence Unit (FIU) – in addition to our everyday activities, we reached an important milestone by becoming and independent institution within the jurisdiction of the Ministry of Finance as of 1 January 2021. The decision was made by the Estonian Parliament in June 2020. In 2020, our employees played a key role in contributing to the national risk assessment of money laundering and terrorist financing. The Covid-19 pandemic considerably affected our everyday work while also increasing the number of financial crimes, especially in the digital world, " concluded Marget Lundava, the Acting Director of the FIU.
A number of legislative changes concerning virtual currency service providers enabled FIU to significantly regulate the market of virtual currencies. In 2020, the FIU revoked the operating licences of 1808 virtual currency service providers.
Despite the legislative amendments and the risks connected to the sector of virtual currencies being extremely high, the FIU noticed a positive trend in notification obligations. Compared to 2019, the number of service providers decreased by three times in 2020, however, the number of undertakings submitting reports of suspicious transactions tripled.
In 2020, virtual IBAN (VIBAN) accounts, which are so-called technical accounts for the payment service providers, started to appear as a new concept in the work of FIU. From the viewpoint of a credit institution, a VIBAN account is not a separate account, which means that the bank does not have an overview of the details of VIBAN account transactions and must request such information from its customer who is a payment service provider. "Fortunately, the availability of information on VIBAN account transactions has changed rapidly, and effective cooperation has been achieved between Estonian banks and various cross-border payment service providers," said Marget Lundava.
In 2020, the information referring to international scammers using local crowdfunding platforms to defraud money from bona-fide investors increased. The FIU contributed to identifying several crime schemes concerning crowdfunding, followed by criminal proceedings.
In 2020, the number of foreign inquiries concerning Estonian companies with FIU operating licences increased significantly. In many cases, these companies had already lost their authorisations, or were in the process of having them revoked. As a rule, the connection of these companies with Estonia was minimal: they did not operate in Estonia, they did not have current accounts in Estonia and the persons behind the company were foreign citizens who did not reside in Estonia. The emergence of such shadow companies in foreign inquiries is a general trend, illustrating the problem that Estonian companies are being used to commit crimes elsewhere in the world. The most common trend in foreign inquiries in 2020 was the transit of money through Estonia, where money on an Estonian bank account was transferred to other countries.
"International cooperation plays a crucial role in preventing money laundering and crime. The cases on foreign inquiries refer to international money laundering networks that may not have been noticed without the information from foreign partners. In addition, the increased foreign cooperation enables to get information about the actions of individuals connected to Estonia who operate outside Estonia. The information from foreign partners supplements the existing information of FIU and enables us to see the bigger picture," explained Marget Lundava.
See the yearbook of the FIU in English HERE (4.37 MB | pdf).