Anti money laundering and terrorist financing is based on international standards. The aim of the regulation is global compliance with common customer due diligence procedures. An important role is played by the intergovernmental Financial Action Task Force on Money Laundering (FATF) operating under the auspices of the OECD. The 40 anti-money laundering recommendations provided by the task force are largely complied with around the world. The EU Anti-Money Laundering Directives are based on the FATF recommendations.
The Ministry of the Interior and the Ministry of Finance are responsible for preparing legislation on prevention of money laundering and funding of terrorism activities. The task of the supervisory authorities referred to in the Act on Detecting and Preventing Money Laundering and Terrorist Financing (Anti-Money Laundering Act) is to ensure that the procedures, risk management and internal control of supervised entities fulfil the requirements of the Act. The Financial Intelligence Unit operating in conjunction with the Finnish National Bureau of Investigation handles reports of suspicious transactions as regards money laundering and terrorist financing.
Prevention of terrorist financing is also the goal of UN and EU financial sanctions aimed at parties participating in or supporting terrorism activities. The Ministry for Foreign Affairs has the main responsibility for coordinating the compliance monitoring of UN and EU financial sanctions in Finland.
Supervised entities are responsible for customer due diligence, for detecting and analysing suspicious transactions and for reporting their suspicions to the Financial Intelligence Unit. Supervised entities have the same obligations in cases of suspicious funding of terrorism as in cases of suspicious transactions possibly related to money laundering. However, money laundering creates suspicions about the lawful origin of assets, whereas terrorist financing can also be carried out with lawfully acquired assets in connection with, for example, fund raising or transfer of money. Thus the suspicions focus on the true nature of the business.
Supervised entities and their officers and employees may be sentenced for negligence of obligations connected to customer due diligence and prevention of money laundering/terrorist financing (Anti-Money Laundering Act). Supervised entities may commit negligent money laundering, if they aid or advise a customer as to, for example, investment operations, establishment of sham corporations or transfer of assets even though they have reason to distrust the lawfulness of the customer’s business.