Estonia

1. Does Estonia have legislation making it a criminal offence to engage in money laundering and/or terrorist financing?

Yes – sections 2373, 2376 and 394 of the Estonian Penal Code provide that money laundering, financing acts of terrorism and financing travel for terrorist purposes are criminal offences.

2. To whom does the legislation apply?

Estonian penal law applies to acts committed within the territory of Estonia, on board of or against ships or aircraft registered in Estonia. It also applies to acts committed outside the territory of Estonia if such acts constitute a criminal offence pursuant to the penal law of Estonia and are punishable at the place of commission of the act, or if no penal power is applicable at the place of commission of the act, and (1) if the act is committed against a citizen of Estonia or a legal person registered in Estonia, or (2) the offender is a citizen of Estonia at the time of commission of the act or becomes a citizen of Estonia after the commission of the act, or if the offender is an alien who has been detained in Estonia and is not extradited.

3. What does the legislation prohibit?

Terrorist financing means the financing and supporting of an act of terrorism and commissioning thereof as well as the organisation, financing and supporting of travel for the purpose of terrorism. This includes making available or accumulating of funds while knowing that these may be used in full or in part to commit a criminal offence.

For money laundering, please see question 4 below.

4. How is money laundering defined? Does underlying criminal activity have to be proven?

According to the MLTPA, money laundering means (1) the conversion or transfer of property derived from criminal activity or property obtained instead of such property for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in the commission of such an activity to evade the legal consequences of that person’s actions; (2) the acquisition, possession or use of property derived from criminal activity or property obtained instead of such property, knowing, at the time of receipt, that such property was derived from criminal activity or from an act of participation therein; and (3) the concealment of the true nature, origin, location, manner of disposal, relocation or right of ownership of property acquired as a result of a criminal activity or property acquired instead of such property or the concealment of other rights related to such property. It also includes participation in, association to commit, attempts to commit and aiding, abetting, facilitating and counselling the commission of any of the activities above.

Money laundering is regarded as such also where the details of a criminal activity which generated the property to be laundered have not been identified.

5. What level of intent or knowledge is required to establish a violation?

It is required to show deliberate, direct or indirect intent. According to the MLTPA, knowledge, intent or purpose required as an element of the offence of money laundering may be inferred from objective facts.

6. What are the potential penalties for infringing the legislation?

As per the Penal Code, the criminal offences are subject to the following:

• Money laundering: punishable by a pecuniary punishment or up to five years’ imprisonment, or upon existence of aggravating factors by two to ten years’ imprisonment.
• Financing acts of terrorism is punishable by two to ten years’ imprisonment.
• Financing travel for terrorist purposes is punishable by up to three years’ imprisonment.

For legal persons, all the above offences are punishable by fine.

The court may impose extended confiscation of assets or property acquired by the above offences.

7. Does the legislation have extra-territorial reach?

Yes, criminal offences committed outside the territory of Estonia are punishable if they involve Estonian citizens or legal persons. In addition, money laundering is regarded as such also where a criminal activity which generated the property to be laundered was carried out in the territory of another country. Travel for terrorist purposes means entry into the Republic of Estonia or travel to another country for the purposes of committing acts of terrorism or membership in a terrorist organisation, or for organisation or receipt of training for committing acts of terrorism.

8. Are there additional anti-money laundering or counter terrorist financing regulations or obligations, such as registration or reporting obligations, for businesses or individuals that operate in particular sectors or undertake particular activities?

Yes, for persons subject to the MLTPA (incl. credit and financial institutions, gambling operators, various regulated professions, providers of virtual currency services etc.), the MLTPA provides for registration and reporting obligations, application of due diligence measures, as well as data gathering, retention and protection obligations, and in some cases the requirement to apply for authorisation.

9. What are the potential penalties for failing to comply with these obligations?

Under the MLTPA, potential penalties for these misdemeanour offences are a fine of up to 1200 euros or detention for a term of up to 30 days for natural persons, and, for legal persons, a fine of up to 400,000 euros.

10. Who are the relevant enforcement authorities in Estonia and what are their contact details?

The enforcement authorities are the Financial Intelligence Unit (FIU: Address Pronksi 12, Tallinn 10117; telephone +372 696 0500; email: info@fiu.ee) and the Financial Supervision Authority (FSA: Address Sakala 4, Tallinn 15030; telephone +372 668 0500; email: info@fi.ee). The Estonian Bar Association and the Ministry of Justice exercise supervision over members of the Bar Association and notaries respectively.