Finland

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

Yes, chapter 32 of the Criminal Code of Finland (39/1889) regulates money laundering offences and chapter 34(a) regulates terrorist offences.

Obligations and measures for preventing money laundering and terrorist financing are set out in the Act on Detecting and Preventing Money Laundering and Terrorist Financing (444/2017) (the “AML Act”), which is based on EU regulations. The AML Act is supplemented by several other Acts.

2. To whom does the legislation apply?

The AML Act applies to obliged entities or parties subject to reporting obligations, such as authorized entities supervised by Finnish Financial Supervisory Authority, such as credit institutions, financial institutions and payment service providers, insurance companies, pension funds, investment service providers, fund management companies, and financial and legal service providers such as auditors, attorneys at law, accountants, tax advisors, pawnshops, real estate agencies, virtual currency providers, gambling operators, licensed debt collectors, trust or company service providers, professional dealers / intermediaries of goods and art where the combined value totals EUR 10,000 or more and other entities list in the AML Act.

The Finnish criminal law applies to offences committed in Finland, with certain limitations to offences committed outside Finland directed at a Finn or committed by a Finn, and with certain limitations to international offences in accordance with international treaties binding on Finland.

3. What does the legislation prohibit?

The Criminal Code prohibits the legalization (laundering) of proceeds from a criminal offence (or property replacing such property) in order to obtain benefit, concealing the illegal origin of such proceeds or property and assisting the offender in evading the legal consequences of the money laundering offence, and the financing of terrorism.

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

Money laundering is an attempt to hide the origin of property or money that has been gained by illegal means. The AML Act refers to chapter 32 of the Criminal Code according to which for money laundering shall be sentenced a person:

• who receives, uses, converts, conveys, transfers or transmits or possesses property acquired through an offence, the proceeds of crime or property replacing such property in order to obtain benefit for himself or herself or for another or to conceal or obliterate the illegal origin of such proceeds or property or in order to assist the offender in evading the legal consequences of the offence or
• conceals or obliterates the true nature, origin, location or disposition of, or rights to, property acquired through an offence, the proceeds of an offence or property replacing such property or assists another in such concealment or obliteration.

An attempt to commit money laundering is also punishable.

Under the Criminal Code intent or negligence are prerequisites for criminal liability for money laundering offence. The criminal activity has to be proven.

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

Intent requires that a perpetrator caused the consequence described in the statutory definition of the offence if this was the perpetrator’s purpose or the perpetrator had considered the consequence as a certain or quite probable result of his / her actions. A consequence has also been intentionally caused if the perpetrator has considered it as certainly connected with the consequence that he / she had aimed for.

Conduct is considered negligent if a perpetrator violates the duty to take the care called for in the circumstances and required of him or her, even though he or she could have complied with it (negligence). According to the Criminal Code, whether or not negligence is to be deemed gross (gross negligence) is decided on the basis of an overall assessment. In the assessment, the significance of the duty to take care, the importance of the interests endangered and the probability of the violation, the deliberateness of the taking of the risk and other circumstances connected with the act and the perpetrator are taken into account.

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

There may be administrative and/or criminal liability.

The supervising authorities may impose as administrative penalties public warnings, administrative fines and penalty payments.

A legal person may be subject to an administrative fine of between EUR 5,000 – EUR 100,000 and, a natural person, between EUR 500 – EUR 10,000.

Penalty payments imposed on financial service providers supervised by either Regional State Administrative Agency or the Financial Supervisory Authority are capped at 10 per cent of the operator’s turnover during the previous financial year or EUR 5 million, whichever is higher. However, the amount can always be up to double the amount of benefit gained, if the amount of benefit gained can be determined.

Penalty payments imposed by supervisory authority on other kinds of operators are capped at double the amount of benefit gained or EUR 1 million, whichever is higher.

The penalty payment imposed by the Financial Supervisory Authority on a natural person may amount to no more than EUR 5 million.

The supervisory authority cannot impose a penalty payment on a natural person for an act or failure to act which is punishable under law. However, the supervisory authority may impose a penalty payment and decide not to report the matter to the criminal investigation authorities.

Under the Criminal Code, the money laundering offences may be punished with a fine or maximum two years imprisonment and, for aggravated money laundering offences, for a minimum of four months and a maximum of six years imprisonment.

For financing of terrorism, imprisonment is a maximum eight years’ sentence unless a more severe sentence is provided elsewhere in law.

7. Does the legislation have extra-territorial reach?

It may have extra-territorial reach in accordance with the international treaties binding on Finland.

AML Act applies when the funds which a transaction concerns originate in a transaction concluded in the territory of another State.

The Finnish criminal law applies to offences committed in Finland, with certain limitations to offences committed outside Finland directed at a Finn or committed by a Finn, and with certain limitations to international offences in accordance with international treaties binding on Finland, for example on financing 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, AML Act obliges businesses in certain sectors among others to create a risk-based assessment on the risks associated with their activities, conduct customer due diligence on their customers, provide staff training. In addition, they are obliged to report suspicious business activities to the Financial Intelligence Unit of the National Bureau of Investigation.

Most legal entities must determine and register their beneficial owners.

Certain listed businesses need to register themselves with the Regional State Administrative Agency for Southern Finland.

In addition to AML Act there are various AML/CTF regulations and acts, such as the Act on Virtual Currency Providers, Government Decree on Politically Exposed Persons, the Act on the Financial Intelligence Unit, the Act on the Freezing of Funds with a View to Combating Terrorism and for example credit and payment institutions and virtual currency providers are provided more detailed obligations under the Act on the Bank and Payment Accounts Control System. These acts are part of the implementation of the EU’s AML Directives. Each of these acts lay down more detailed provisions on compliance with AML regulations.

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

Violation of these obligations may lead to administrative liability issued by the respective supervising authority, which is described in more detail in question 6.

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

General information on preventing money laundering in Finland is available from https://rahanpesu.fi/en/front-page.