ADDITIONAL RECOMMENDED MEASURES OF THE ESTONIAN BANKING ASSOCIATION IN ORDER TO PREVENT MONEY LAUNDERING IN CREDIT INSTITUTIONS

In order to prevent the use of financial system for money laundering, the bank must apply additional measures for the prevention of money laundering:

  • The bank must know its client
  • The bank must assess and know the content and objective of transactions and operations of the client
  • The bank must monitor and analyse compliance of economic activity of the client with economic possibilities of the client
  • The bank must check the origin of the assets used in transactions in case of transactions not complying with legal capacity and economic possibilities of the client

    OBLIGATION OF THE BANK TO ASK FROM THE CLIENT ADDITIONAL DOCUMENTS AND DATA

    I Upon opening of account

    Upon the conclusion of account agreement with legal person the bank will ask from the client additional data, which must reveal:
  • Precise field of activity of the client
  • Main contractual partners of the client
  • Turnover of the client
  • Percentage of cash and non-cash transactions
  • Settlements with foreign countries - names of countries/persons
  • Direction of transactions - from account/to account, from abroad/to abroad
  • Frequency of transactions
  • Accounts of the client in other banks, incl. data of the bank and contact person of the bank

    If upon identification of the person justified doubt arises that he/she may not act on behalf of him/herself, the bank must identify the person on behalf of whom he/she is acting. In case of justified doubt that the person does not act on behalf of him/herself, the account will not be opened.

    II Upon performing of transactions:
    If it seems to the bank officer that activity of the client can refer to money laundering, the bank will ask from the client additional information in order to determine the origin of money or other assets used in transactions. The bank may ask from the client additional information orally and/or in writing.

    Before the performing of transaction the bank will ask from the client explanation of the origin of assets used in the transaction.

    In order to determine the origin of money or other assets used in the transaction and to check the correctness of the explanation of payment submitted by the client, the bank is entitled to ask from the client additionally following documents and/or data, if necessary:

    1. Documents mentioned in the explanation of payment, such as
  • Sales-purchase agreements
  • Consignment notes of goods
  • Customs documents
  • Invoices
  • Other documents

    The bank will not accept order of payment, if explanation of payment is lacking or insufficient.

    2. Balance sheet or income statement of legal person

    3. Additional data, if necessary
  • Data of the other party
  • Contact data of legal or natural person connected with the transaction (name, contact address, contact phone)
  • Name of the bank and data of the contact person of the bank, through whom information can be obtained about level and extent of the transaction.

    III Risk groups and standards of behaviour
    The bank will establish to the clients risk groups and corresponding standards of behaviour;
  • Proceeding from the country of location
  • According to business form
  • According to the existence of former doubt of money laundering
  • According to the reputation of person/company;

    Standards of behaviour must guarantee implementation of principles fixed in this instruction in credit and financial institutions.

    IV Additional measures in case of cash transactions and receipts

    Receipts The bank will check and pay special attention to receipts;
  • Which have no logical economic reason not depending on the sum;
  • Cash transactions;
    In case of cash transactions the bank will ask from the client explanation and documents attesting legal origin of the money as follows: in case of unknown/little known client from 100.000 EEK and also in case of smaller sums, if the bank has reasons to suspect money laundering, and/or, if the sum of single and/or consecutive transactions exceeds 100.000 EEK. If no explanation is received, the transaction will not be performed.
  • From the countries belonging into the so-called "Black list";
  • Large single or regular payments;
    In case of large single or regular sums received from the countries of the Black list, not depending on the country of location, the bank will ask from the client documents certifying legal origin of the money or other assets used in the transactions. If no explanation is received, the transaction will not be performed.

    The receiving bank will check legality of money or other assets used in transactions. Correspondent bank is not obliged to check legal origin of the assets.

    RIGHTS OF THE BANK IN CASE OF PERSISTENCE OF THE DOUBT OF MONEY LAUNDERING

    If in spite of the submission of explanation, documents and additional data by the client the bank has still doubt that the bank may be used for money laundering or that the client is not acting on behalf of him/herself, the bank will be entitled:
  • Not to open the account
  • To postpone the transaction
  • Not to perform the transaction
  • To return the assets to the sender
  • To block the transaction on the basis of corresponding legal order

    INTERNAL RULES OF PROCEDURE OF THE BANK

    In addition to the provisions of the law and other legal acts, internal rules of procedure of the bank must include:
  • List of documents required upon opening of account
  • List of documents required upon performing of transactions
  • Order of regular checking of submitted data
  • Order of alteration of representation rights of the client
  • Order of registration of documents
  • Order of preservation of documents
  • Division of obligations of bank officer in bank structure
  • Responsibility of bank officer for non-compliance with established requirements

    For more efficient prevention of money laundering, upon the establishment of internal rules of procedures of a bank, banks will proceed from these recommendations.