Prevention of money laundering in the financial market

Money laundering means the activities referred to in chapter 32, sections 6–10 of the Criminal Code of Finland (39/1889).

Regulation and activity against money laundering and terrorist financing

 

The Financial Action Task Force (FATF) is an inter-governmental body operating under the Organisation for Economic Co-operation and Development, the OECD, with the objective of combating money laundering and terrorist financing. The group develops and issues recommendations and follows their implementation in the member states with annual inquiries and periodic country evaluations.

Finland has been a member of the FATF since 1991. Starting from 1990, the FATF has issued 40 recommendations on prevention of money laundering and terrorist financing. The FATF member states are politically committed to observing the recommendations. The recommendations were last reformed in full in 2012 and after that, individual specifications have been made to them.

Finland’s recent evaluation was completed in spring 2019 and published on 16 April 2019. The first progress report for the Mutual Evaluation Report of Finland will be discussed at the FATF in June 2020.

In the European Union, preventing the use of the financial system for the purposes of money laundering and terrorist financing is regulated under the Anti-Money Laundering Directive. The so-called fourth Anti-Money Laundering Directive is from 2015 and it was amended with the fifth Anti-Money Laundering Directive in 2018. In addition, the EU's so-called Funds Transfer Regulation contains provisions on preventing money laundering.

The Ministry of Finance takes part in the European Commission's Expert Group on Money Laundering and Terrorist Financing, which meets several times a year. The expert group discusses topical questions related to money laundering and financing of terrorism, such as implementation of legislation, market occurrences and international cooperation.

The Act on Preventing Money Laundering and Terrorist Financing includes provisions on prevention of money laundering and terrorist financing, promotes the detection and investigation of terrorist financing and reinforces the tracing and recovery of the proceeds of crime. The legislation is based on the Anti-Money Laundering Directive and the existing recommendations of the FATF.

The Ministry of Finance is responsible for preparing the act concerning prevention of money laundering. The Ministry of Finance and the Ministry of the Interior act as national authorities that coordinate the compilation of national risk assessments on money laundering and terrorist financing. The Ministry of Finance is responsible for preparing a risk assessment on money laundering and the Ministry of the Interior on terrorist financing.

The authorities supervising the obliged entities in accordance with the Act on Preventing Money Laundering are the Financial Supervision Authority, the National Police Board in respect of gambling activities in Mainland Finland, the Finnish Patent and Registration Office in respect of auditors, and the Regional State Administrative Agency in respect of other obliged entities. In addition, the Finnish Bar Association supervises attorneys-at-law.

The Ministry of the Interior is responsible for preparing the Act on the Financial Intelligence Unit. The Financial Intelligence Unit is working under the National Bureau of Investigation. The duty of the Finnish Security Intelligence Service is to prevent and combat the most serious threats to national security including terrorism.

Money laundering refers to the activity where funds of criminal or illegal origin are recycled through the legal payment system to cover the actual nature, origin or owners of the funds. Terrorist financing refers to the acquisition or collection of funds of legal or illegal origin for terrorist purposes.

Contact person for the website: Maarit Pihkala, Jaana Vehmaskoski

[email protected]

More information

Act on Preventing Money Laundering and Terrorist Financing (new version not yet in Finlex)

FATF

FATF's Mutual Evaluation Report of Finland - Finland's measures to combat money laundering and terrorist financing

4th Anti-Money Laundering Directive

5th Anti-Money Laundering Directive

Second Funds Transfer Regulation

European Banking Authority's reports

Basel Committee on Banking Supervision

Financial Supervision Authority's regulations and guidelines

Financial Intelligence Unit (National Bureau of Investigation)