Police commenced misdemeanour proceedings against company service providers without an activity licence
In 2022, the Financial Intelligence Unit (FIU) issued memoranda to company service providers acting without an activity licence. With respect to those service providers who did not apply for an activity licence following clarifications and warnings, the police commenced proceedings.
Hannes Kelt, Head of the Cyber and Economic Crime Division of the North Prefecture, said that it was necessary to commence proceedings against those service providers who knowingly and consistently failed to comply with their obligations and did not apply for the necessary activity licence. This area is, for reason, subject to further supervision.
“Undertakings have an obligation to make sure that the services they provide are not used for money laundering, for example. According to the Estonian national risk assessment of money laundering and terrorist financing, the provision of company service is also one of the services which, if provided in a concealed or light-handed manner, pose a risk of money laundering. According to the Money Laundering and Terrorist Financing Prevention Act, in order to provide company service, an undertaking is required to apply for an activity license, which will make the service more transparent for both the state and potential customers,” Kelt said.
The Financial Intelligence Unit (FIU) has estimated, on the basis of the data from the commercial register, that, in fact, nearly a few hundred operating Estonian companies provide company service, 60% of which hold an activity license. In total, at the end of 2022, there were more than 300 valid activity licenses in Estonia for the provision of company services.
“Today the police are proceeding about ten misdemeanour cases commenced under Section 372 of the Estonian Penal Code, concerning the economic activities without activity licence and prohibited economic activities of company service providers, under which a natural person can be punishable by a fine of up to three hundred fine units or by detention, and a legal person by a fine of up to 32,000 euros.” Kelt said.
More information on how to apply for an activity licence required for the provision of company services can be found on the FIU’s website.