WHAT ARE THE
Money laundering and terrorism financing laws in Finland?
6In Finland, money laundering and terrorism financing are stringently regulated primarily by the Act on Preventing Money Laundering and Terrorist Financing (444/2017; amendments up to 376/2021 included), often referred to as the Finnish AML Act. This law was last updated to align with the European Laws Sixth Anti-Money Laundering Directive (AMLD6), and it's designed to prevent, uncover, and investigate money laundering and terrorism financing.
In addition to the Finnish AML Act, there are other related regulations and guidelines, including the Act on the Financial Intelligence Unit (445/2017; amendments up to 434/2021 included), which establishes the structure and role of the Financial Intelligence Unit in Finland.
WHAT ARE THE
Key obligations reporting entities have under Finnish laws?
Under Finland's Act on Preventing Money Laundering and Terrorism Financing (444/2017), reporting entities have several key obligations:
- Customer Due Diligence (CDD): Reporting entities are required to identify and verify the identity of their customers and their beneficial owners. They must also understand the nature and purpose of the business relationship.
- Risk Assessment: Reporting entities are required to perform risk assessments for their customers, considering factors that could indicate money laundering or terrorism financing.
- Reporting: Reporting entities are required to report any suspicious transactions or business relationships to the Financial Intelligence Unit (FIU) of Finland.
- Record Keeping: Reporting entities must keep records of their customer due diligence measures and transactions for a period of five years.
- Internal Controls: Reporting entities must establish and maintain risk-based policies and procedures to prevent and mitigate the risks of money laundering and terrorist financing. This includes providing training to their employees.
- Monitoring: Reporting entities must conduct ongoing monitoring of their business relationships and customer transactions to ensure they are consistent with the entity's knowledge of the customer and their risk profile.
WHO ARE THE
ML/TF regulators in Finland and what functions do they perform?
In Finland, the regulatory oversight for anti-money laundering (AML) and counter-terrorism financing (CTF) is provided by several bodies:
- The Financial Supervisory Authority (FIN-FSA): The FIN-FSA is responsible for supervising compliance with AML and CTF laws by credit institutions, financial institutions, fund management companies, and insurance companies.
- The Regional State Administrative Agencies (AVI): The AVI supervises certain sectors that are susceptible to money laundering and terrorist financing, such as real estate agents, pawnbrokers, and gambling operators.
- The Finnish Tax Administration: This entity supervises AML and CTF compliance of auditors and accounting firms.
- The Financial Intelligence Unit (FIU) of Finland: The FIU receives and analyses suspicious transaction reports from reporting entities.
WHAT ARE THE
Industry sectors subject to ML/TF regulations?
In Finland, the Act on Preventing Money Laundering and Terrorism Financing (444/2017) applies to a broad range of industry sectors. These include, but are not limited to:The regulated sectors in Italy subject to AML and CTF regulations include, but are not limited to:
WHAT ARE THE
Penalties for non-compliance with AML/CTF laws?
In Finland, failure to comply with the Act on Preventing Money Laundering and Terrorism Financing can result in severe penalties. The specific penalties depend on the nature and severity of the violation, but they can include:
- Fines: Both individuals and businesses can be subject to substantial fines for non-compliance. The exact amount of the fines can vary greatly depending on the severity and duration of the violation.
- Imprisonment: In serious cases, individuals responsible for non-compliance can face imprisonment.
- Business Restrictions: Non-compliant businesses may face restrictions on their operations, which could include the suspension or revocation of their licenses to operate.
- Reputational Damage: Entities found to be non-compliant with AML/CTF laws may also suffer significant reputational damage, which can lead to loss of business.
It's important to note that the exact penalties are determined on a case-by-case basis and are at the discretion of the Finnish courts and regulatory bodies.
WHAT ARE THE
Largest fines for non-compliance with AML/CTF laws?
Here are some of the largest fines for non-compliance with AML/CTF laws in Finland:
- Nada Express Osk - On May 9, 2022, the Financial Supervisory Authority (FIN-FSA) imposed a penalty amount of EUR 25,000 and issued a public warning for non-compliance with AML/CFT regulations. The company was accused of failing to prepare and perform a satisfactory risk assessment, conduct a satisfactory evaluation of money-laundering and terrorist-financing concerns linked with its client interactions, customer due diligence, ongoing monitoring, and the obligation to obtain information and report.
- Halgan Services Oy - On April 13, 2022, the Financial Supervisory Authority imposed a fine of EUR 10,000 for non-compliance with AML/CFT regulations. The company was found to be insufficient in knowing its customers, preserving information, and fulfilling the enhanced duty of knowing to meet AML/CFT law requirements. The company had also not prepared a sufficient risk assessment and made a sufficient risk-based assessment of its customers.
- S-Bank Ltd. and FIM Asset Management Ltd. - On December 18, 2019, the Financial Supervisory Authority (FIN-FSA) imposed a fine of EUR 980,000 on S-Bank for omissions in customer due diligence data. The bank lacked adequate risk management procedures as well as up-to-date and comprehensive customer due diligence data to monitor the risks of money laundering and terrorist financing. A similar warning was also issued to FIM Asset Management Ltd for not obtaining adequate customer due diligence data.