Finland Mutual Evaluation Ratings

1. Anti-money laundering and counter-terrorist financing measures in Finland - Mutual Evaluation Report - April 2019 1
Anti-money laundering and counter-
terrorist financing (AML/CFT)
measures in Finland
Fourth Round Mutual Evaluation
Key findings, ratings and priority actions
April 2019
http://www.fatf-gafi.org/publications/mutualevaluations/documents/mer-finland-2019.html

2. Anti-money laundering and counter-terrorist financing measures in Finland - Mutual Evaluation Report - April 2019
Ratings – Effectiveness (1/3)
2
Immediate outcome of an effective system to combat money
laundering (ML) and terrorist financing (TF)
Extent to
which
Finland has
achieved this
objective
1. ML and TF risks are understood and, where appropriate,
actions co-ordinated domestically to combat ML and TF
Substantial
2. International co-operation delivers appropriate information,
financial intelligence, and evidence, and facilitates action
against criminals and their assets
High
3. Supervisors appropriately supervise, monitor and regulate
financial institutions and designated non-financial
businesses and professions (DNFBPs) for compliance with
AML/CFT requirements commensurate with their risks.
Low
4. Financial institutions and DNFBPs adequately apply AML/CFT
preventive measures commensurate with their risks, and
report suspicious transactions.
Moderate

3. Anti-money laundering and counter-terrorist financing measures in Finland - Mutual Evaluation Report - April 2019 3
Immediate outcome of an effective system to combat money
laundering (ML) and terrorist financing (TF)
Extent to
which
Finland has
achieved this
objective
5. Legal persons and arrangements are prevented from misuse
for money laundering or terrorist financing, and information
on their beneficial ownership is available to competent
authorities without impediments
Moderate
6. Financial intelligence and all other relevant information are
appropriately used by competent authorities for money
laundering and terrorist financing investigations.
Substantial
7. Money laundering offences and activities are investigated
and offenders are prosecuted and subject to effective,
proportionate and dissuasive sanctions
Substantial
8. Proceeds and instrumentalities of crime are confiscated. Moderate
Ratings – Effectiveness (2/3)

4. Anti-money laundering and counter-terrorist financing measures in Finland - Mutual Evaluation Report - April 2019 4
Immediate outcome of an effective system to combat money
laundering (ML) and terrorist financing (TF)
Extent to
which
Finland has
achieved this
objective
9. Terrorist financing offences and activities are investigated
and persons who finance terrorism are prosecuted and
subject to effective, proportionate and dissuasive sanctions.
Moderate
10. Terrorists, terrorist organisations and terrorist financiers are
prevented from raising, moving and using funds, and from
abusing the non-profit sector.
Moderate
11. Persons and entities involved in the proliferation of weapons
of mass destruction are prevented from raising, moving and
using funds, consistent with the relevant United Nations
Security Council Resolutions.
Moderate
Ratings – Effectiveness (3/3)

5. Anti-money laundering and counter-terrorist financing measures in Finland - Mutual Evaluation Report - April 2019 5
Ratings – Effectiveness
April 2019
1
3
6
1
High
Substantial
Moderate
Low

6. 15-Apr-19
6
Ratings – technical compliance
(1/5)
AML/CFT POLICIES AND COORDINATION
1. Assessing risks & applying a risk-based approach LargLarLarLar Largely Compliant
2. National cooperation and coordination Par Pa ParPar Partially Compliant
MONEY LAUNDERING AND CONFISCATION
3. Money laundering offence LargLarLarLar Largely Compliant
4. Confiscation and provisional measures LargLarLarLar Largely Compliant
TERRORIST FINANCING AND FINANCING OF PROLIFERATION
5. Terrorist financing offence LargLarLarLar Largely Compliant
6. Targeted financial sanctions related to terrorism & terrorist
financing LargLarLarLar Largely Compliant
7. Targeted financial sanctions related to proliferation LargLarLarLar Largely Compliant
8. Non-profit organisations Par ParParPar Partially Compliant

7. 15-Apr-19
7
Ratings – technical compliance
(2/5)
PREVENTIVE MEASURES
9. Financial institution secrecy laws ComCo ComCom Compliant
Customer due diligence and record keeping
10. Customer due diligence LargLarLarLar Largely Compliant
11. Record keeping ComCo ComCom Compliant
Additional measures for specific customers and activities
12. Politically exposed persons LargLarLarLar Largely Compliant
13. Correspondent banking Par Pa ParPar Partially Compliant
14. Money or value transfer services ComCo ComCom Compliant
15. New technologies LargLarLarLar Largely Compliant
16. Wire transfers ComComComCom Compliant

8. 15-Apr-19
8
Ratings – technical compliance
(3/5)
PREVENTIVE MEASURES (continued)
Reliance, Controls and Financial Groups
17. Reliance on third parties LargLarLarLar Largely Compliant
18. Internal controls and foreign branches and subsidiaries LargLarLarLar Largely Compliant
19. Higher-risk countries Par Pa ParPar Partially Compliant
Reporting of suspicious transactions
20. Reporting of suspicious transactions ComCo ComCom Compliant
21. Tipping-off and confidentiality ComCo ComCom Compliant
Designated non-financial Businesses and Professions (DNFBPs)
22. DNFBPs: Customer due diligence LargLarLarLar Largely Compliant
23. DNFBPs: Other measures LargLarLarLar Largely Compliant

9. 15-Apr-19
9
Ratings – technical compliance
(4/5)
TRANSPARENCY AND BENEFICIAL OWNERSHIP OF LEGAL
PERSONS AND ARRANGEMENTS
24. Transparency and beneficial ownership of legal persons PartPa Pa Par Partially Compliant
25. Transparency and beneficial ownership of legal arrangements LargLarLarLar Largely Compliant
POWERS AND RESPONSIBILITIES OF COMPETENT AUTHORITIES
AND OTHER INSTITUTIONAL MEASURES
Regulation and Supervision
26. Regulation and supervision of financial institutions LargLarLarLar Largely Compliant
27. Powers of supervisors PartPa Pa Par Partially Compliant
28. Regulation and supervision of DNFBPs PartPa Pa Par Partially Compliant
Operational and Law Enforcement
29. Financial intelligence units ComCo Co Com Compliant
30. Responsibilities of law enforcement and investigative
authorities ComCo Co Com Compliant
31. Powers of law enforcement and investigative authorities LargLarLarLar Largely Compliant
32. Cash couriers LargLarLarLar Largely Compliant

10. 15-Apr-19
10
Ratings – technical compliance
(5/5)
POWERS AND RESPONSIBILITIES OF COMPETENT AUTHORITIES
AND OTHER INSTITUTIONAL MEASURES (continued)
General Requirements
33. Statistics LargLarLarLar Largely Compliant
34. Guidance and feedback Par Pa ParPar Partially Compliant
Sanctions
35. Sanctions Par Pa ParPar Partially Compliant
INTERNATIONAL COOPERATION
36. International instruments LargLarLarLar Largely Compliant
37. Mutual legal assistance LargLarLarLar Largely Compliant
38. Mutual legal assistance: freezing and confiscation LargLarLarLar Largely Compliant
39. Extradition LargLarLarLar Largely Compliant
40. Other forms of international cooperation LargLarLarLar Largely Compliant

11. Anti-money laundering and counter-terrorist financing measures in Finland - Mutual Evaluation Report - April 2019 11
Ratings – technical compliance
April 2019

12. Anti-money laundering and counter-terrorist financing measures in Finland - Mutual Evaluation Report - April 2019
Key findings
 Finland has an adequate level of understanding of its Money
Laundering (ML) and Terrorist Financing (TF) risks, and especially
of its main ML risks associated to the grey economy. Those risks
are addressed in a well-coordinated manner and through an
efficient and comprehensive set of preventive measures. Key
national authorities for combating TF have a sound
understanding of TF risks. They address the identified TF risks in a
manner which is consistent with the nature and level of TF risk in
the country.
 Financial intelligence is used to a high extent to develop evidence
and trace criminal proceeds. FIU conducts quality analysis but its
products are not used to a full extent by other authorities.
 Authorities conduct complex and international ML investigations
involving foreign predicate offences and significant amounts of
laundered proceeds. ML investigations and prosecutions are
consistent with the country’s risk profile, with priority given to
grey economy-related offending and economic crimes. However,
some technical limitations impact Finland’s effectiveness
regarding ML investigations and prosecutions, in particular the
rule of concurrent offences and the sanction regime.
12
April 2019

13. Anti-money laundering and counter-terrorist financing measures in Finland - Mutual Evaluation Report - April 2019
Key findings
April 2019
13
 Although TF prosecutions have been initiated, there has been no
conviction to date in Finland. This is broadly in line with the overall TF
risks in the country even though the changing environment, with
increased focus on ISIL Foreign Terrorists Fighters (FTFs) and returnees,
are not adequately reflected in TF cases investigated. National
authorities are mobilised on the terrorism threat, and intelligence on TF
shared between the Financial Intelligence Unit (FIU) and the security
intelligence service (SUPO) results in TF leads. Targeted Financial
Sanctions (TFS) are used only to some extent as mitigation measures, in
particular with regard to FTFs. There is limited interaction to date with
the Non-Profit Organisation (NPO) sector at risk of TF.
 Finland has developed a far-reaching legal system to recover assets,
including mechanisms to facilitate decisions to confiscate. Cases
evidence that freezing and seizure measures are routinely used by the
relevant authorities. However, Finnish authorities do not demonstrate
whether the policies are actually successful in permanently depriving
criminals of their assets. In any case, confiscations in cross-border ML
cases and repatriation of assets to Finland are insignificant, and
confiscation in cross-border cash transportation cases is not applied to
a satisfactory extent.

14. Anti-money laundering and counter-terrorist financing measures in Finland - Mutual Evaluation Report - April 2019
Key findings
14
April 2019
 Financial Institutions (FIs) have an adequate understanding of
their exposure to ML risks and of their AML/CFT obligations.
However, there are some gaps on the TF side, and some high-risk
institutions such as hawalas need to improve their ML/TF
knowledge. The level of understanding of risk and awareness of
AML/CFT obligations of Designated Non-Financial Businesses and
Professions (DNFBPs) is adequate only in some sectors. STR
reporting is low to non-existent for some DNFBP sectors.
 Supervisors’ understanding of ML/TF risks is not adequate for the
majority of sectors under their supervision, and overall, the
AML/CFT monitoring and supervision is not carried out on a risk-
sensitive basis. The supervisors are significantly under-resourced
given the breadth and depth of their AML/CFT responsibilities
and associated workload.
 The ability of competent authorities to establish the beneficiary
ownership (BO) of legal persons in a timely manner is limited.
The public registries are not fully reliable and relevant remedies
to ensure that registers are kept up-to-date are not available.

15. Anti-money laundering and counter-terrorist financing measures in Finland - Mutual Evaluation Report - April 2019
Key findings
 Finnish authorities cooperate routinely with their foreign
counterparts, formally and informally. Law Enforcement
Authorities (LEAs) in particular both seek international
cooperation to build their cases, and share timely and
accurate information. Cooperation is generally in line with
Finland’s geographic risk exposure.
 There is a satisfactory level of coordination and cooperation
in relation to combating Proliferation Financing (PF) matters
in Finland. Mechanisms for the implementation of TFS are
in place, with European Union (EU) delays for transposition
mitigated by prior designations by the EU for Iran.
15
April 2019

16. Anti-money laundering and counter-terrorist financing measures in Finland - Mutual Evaluation Report - April 2019
Priority Actions for Finland to
strengthen its AML/CFT System
16
April 2019
 Finland should ensure that AML/CFT supervisors accelerate and
finalise the development of their methodology for AML/CFT
supervision on a risk-sensitive basis, and implement this
methodology in relation to their supervised entities as a matter
of priority.
 Finland should allocate adequate resources to AML/CFT
supervisors, and specifically FIN-FSA and RSAA, including human
resources, to enable them to conduct their AML/CFT supervisory
responsibilities in an adequate and effective manner.
 Finland should ensure that the framework in preparation for the
setting up of the beneficial ownership registry requires that the
information collected and stored is subject to relevant
verification, and then implement the registry as a matter of
urgency.

17. Anti-money laundering and counter-terrorist financing measures in Finland - Mutual Evaluation Report - April 2019
Priority Actions for Finland to
strengthen its AML/CFT System
 Finland should ensure that the existing gaps in the common
understanding of ML and TF risks are filled, and that mechanisms
are in place and effectively operating to enable all relevant
authorities in the country, as well as obliged entities, to have an
updated and comprehensive view of ML/TF risks affecting the
country.
 Finland should set up adequate platforms and/or channels to
support operational cooperation between the relevant authorities,
first of all to further improve the understanding of ML/TF risks in the
country (FIU and AML/CFT supervisors), and second to leverage the
potential of the FIU to produce quality financial intelligence (FIU and
LEAs, especially local police departments).
 Finland should encourage the use of a wider range of sentences for
aggravated ML cases by courts, to improve the proportionality of
sentencing.
17
April 2019