Amendments Made To Finnish Anti-Money Laundering And Financing Of Terrorism Rules Now In Force

• Published date: 03 July 2023
• Subject Matter: Government, Public Sector, International Law, Money Laundering, Export Controls & Trade & Investment Sanctions
• Law Firm: Borenius Attorneys Ltd
• Author: Mr Juho Kein'nen

The partial reform of the Finnish Act on Preventing Money Laundering and Terrorist Financing (AML Act), which has been in the works since January 2022, was adopted by the Parliament in late March 2023 with the majority of its provisions slated to enter into force on 31 March 2023.

The amendments introduced in the reform address the shortcomings of the Finnish legislative framework, which were identified during the evaluation the Financial Action Task Force (FATF) conducted on Finland in 2019, as well as the deficiencies observed by the European Commission in the implementation of existing European AML directives. In addition, the opinions of Finnish authorities and the private sector were taken into account in the preparation of the reform.

The key amendments introduced by the partial reform relate to the following:

• definitions and scope of application
• customer due diligence (CDD) requirements
• measures to ensure compliance with EU sanctions and targeted asset freezes
• supervision and administrative sanctions.

Definitions and scope of application

The definition of what constitutes a suspicious transaction is now included in the AML Act. The notion covers all unusual transactions of a specific customer whose purpose the obliged entity has not been able to identify. The explanatory memorandum of the government proposal further clarifies that the notion of a suspicious transaction covers suspicions of both money laundering and terrorist financing. The provisions of the Act are aligned with the new definition.

The amended definition of a politically exposed person now also covers members of the administrative, management, and supervisory bodies of partially state-owned enterprises instead of just those serving on the corresponding bodies of wholly-state owned enterprises. Furthermore, the definition covers persons who hold similar positions in foreign state-owned enterprises.

With regard to auditors, the AML Act's scope of application has been expanded to cover all activities of an auditor when those activities fall within the scope of Finnish Auditing Act. Formerly, the AML Act applied to auditors only when they were carrying out a statutory audit defined in the Auditing Act. In addition, auditors are now required to comply with the AML Act when auditing public administration entities and public finances.

Customer due diligence measures

The revised AML Act introduces amendments to the requirements regarding enhanced customer due diligence (CDD) measures that...