Finland to step up efforts to combat money laundering and terrorist financing
The Financial Action Task Force (FATF), which is an international body active in the fight against money laundering and terrorist financing, has published its Mutual Evaluation Report of Finland. The FATF states that the fight against money laundering and terrorist financing is overall at a relatively good level in Finland, but there are also shortcomings.
(Ministry for Foreign Affairs, Ministry of Economic Affairs and Employment, Ministry of Finance, Ministry of Justice and Ministry of the Interior, 16 April 2019)
Finland is increasing the public resources used to combat money laundering and terrorist financing. Emphasis will be placed on the supervision of the financial sector. Also, the activities of the Financial Intelligence Unit will be made more effective. Because of the new civilian intelligence legislation and the additional human resources required by the legislation, the Finnish Security Intelligence Service is able to take a significant step forward in combating terrorism and terrorist financing, says the Ministry of the Interior’s Permanent Secretary Ilkka Salmi, who led the Finnish delegation at the FATF Plenary in February 2019.
FATF — the international body active in the fight against money laundering and terrorist financing
The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 that sets international standards for combating money laundering, terrorist financing and the proliferation of weapons of mass destruction. Its members comprise 36 states and 2 regional organisations, for example the European Commission. It also has dozens of associate members and observers around the world, such as the World Bank and International Monetary Fund. Finland has been a member since 1991.
The FATF monitors implementation of its recommendations
There are 40 recommendations at the heart of the FATF’s activities that members are bound to comply with. The FATF monitors the progress of its members in implementing the recommendations by carrying out mutual evaluations through peer reviews. The evaluations include analyses of the level of compliance with the recommendations and the level of effectiveness of preventing and combating money laundering and terrorist financing. The evaluation of Finland was carried out in summer 2018 and the evaluation report was adopted at the FATF Plenary in Paris in February 2019.
In its evaluation, the FATF analysed 11 different fields of money laundering and terrorist financing. In a four-tier rating, Finland received the highest rating for international cooperation in the fight against money laundering and terrorist financing. The second highest rating in the evaluation was received for the assessment of money laundering and terrorist financing risks, cooperation between authorities, collection and use of financial intelligence on money laundering and terrorist financing, and investigation and prosecution of money laundering.
Additional resources for the supervision of combating money laundering and terrorist financing
The supervision of combating money laundering and terrorist financing was rated as the lowest level of effectiveness in the evaluation, which mainly results from the authorities' limited resources. The situation will improve as the Financial Supervisory Authority, the Regional State Administrative Agency for Southern Finland and the gambling administration receive additional resources for supervision. In practice, the Financial Supervisory Authority and the Regional State Administrative Agency for Southern Finland will double their resources for supervising money laundering and terrorist financing. The Financial Intelligence Unit has also been allocated more human resources. Expanding the Finnish Security Intelligence Service’s powers and increasing its human resources are other significant factors in the fight against terrorism and its financing. On 1 March 2019, the responsibility for national coordination with the FATF was transferred from the Ministry of the Interior to the Ministry of Finance, which will also allocate more of its resources to this sector. The responsibility for preparing amendments the Act on Preventing Money Laundering and Terrorist Financing was transferred to the Ministry of Finance on 1 January 2019.
Among other measures aimed at improving the effectiveness of the fight against money laundering and terrorist financing are a money laundering supervision register of the State Administrative Agency, where the obliged entities supervised by the Agency must register their information, and a register of beneficial owners which is under the responsibility of the Finnish Patent and Registration Office. The registers will be introduced on 1 July 2019. The purpose of the register of beneficial owners is particularly aimed at helping the authorities and the obliged entities laid down in the Act on Preventing Money Laundering and Terrorist Financing to identify the beneficial owners of associations. To improve cooperation between the authorities, a working group was set up in 2018 in which the representatives of the supervisors, the Financial Intelligence Unit and Finnish Security Intelligence Service further improve cooperation and practices of the fight against money laundering and terrorist financing.
Jaakko Christensen, Senior Detective Superintendent, Ministry of the Interior, tel. +358 29 548 6950, jaakko.christensen(at)poliisi.fi
Armi Taipale, Senior Ministerial Adviser, Ministry of Finance, tel. +358 29 553 0399, armi.taipale(at)vm.fi
Nadine Hellberg-Lindqvist, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 29 504 7023, nadine.hellberg-lindqvist(at)tem.fi
Janne Kanerva, Senior Ministerial Adviser, Ministry of Justice, tel. +359 29 515 0176, janne.kanerva(at)om.fi
Juho Keinänen, Legal Officer, Ministry for Foreign Affairs, tel. +358 29 535 1979, juho.keinanen(at)formin.fi