Prevention of money laundering and terrorist financing  

The entities we supervise are obliged to know their customers’ business, detect and examine suspicious business operations, and report any such operations to Finland's Financial Intelligence Unit, the national anti-money laundering unit. This directory contains instructions to supervised entities for customer due diligence and prevention of money laundering and terrorist financing.

The prevention of money laundering and terrorist financing is based on international standards. Regulation seeks to ensure that global financial markets comply with harmonised customer due diligence procedures. An important role is occupied here by the intergovernmental working group on the prevention of money laundering and terrorist financing, the Financial Action Task Force on Money Laundering (FATF) operating under OECD. Its 40 recommendations to combat money laundering and 9 special recommendations to counter terrorist financing are widely observed around the world. The EU’s Anti-Money Laundering Directives are based on FATF recommendations.

In Finland, the Financial Intelligence Unit operating in connection with the National Bureau of Investigation deals with reports submitted to it on suspicious transactions. Responsibility for the development of anti-money laundering legislation lies with the Ministry of the Interior. The Financial Supervisory Authority, in turn, is responsible for ensuring that the procedures, risk management and internal control of supervised entities meet statutory requirements.

A supervised entity or its employee may be sentenced to punishment for failure to comply with the obligations of customer due diligence and prevention of money laundering and terrorist financing under the Act on Preventing and Clearing Money Laundering and Terrorist Financing. A supervised entity may become guilty of negligent money laundering, for example, if it assists or counsels a customer in connection with investment activities, establishment of fictitious companies or transfer of funds, although there are weighty reasons to be suspicious of the customer's business.

These instructions have been issued in accordance with the Act on Preventing and Clearing Money Laundering and Terrorist Financing (AML Act) that became effective on 1 August 2008. The Act is supplemented by Government Decree 616/2008, supplemented by Government Decree 1204/2011, Decision by the Ministry of the Interior 156/2010 and Government Decision 1022/2010. The AML Act transposed into Finnish legislation the requirements of the EU's Third Anti-Money Laundering Directive and its complementary European Commission Directive.

Standard 2.4

Customer identification and customer due diligence

26 April 2012