Finland
Last updated: 23/10/2008
CENTRAL AUTHORITY FOR REPORTING
The central authority for reporting is the Money Laundering Clearing House, which is a special unit of the National Bureau of Investigation.
ANTI-MONEY LAUNDERING REGULATOR(S)
The Ministry of the Interior is the governmental body responsible for developing anti-money laundering legislation in Finland.
HAS THE THIRD EU MONEY LAUNDERING DIRECTIVE BEEN IMPLEMENTED? IF NOT, WHEN IS IT EXPECTED TO BE IMPLEMENTED?
The Act on Preventing and Clearing Money Laundering and Funding of Terrorism (503/2008) was issued on 18 June 2008 and it came into force on 1 August 2008. This Act transposes the Third Directive into national law.
Article 6 of the Third Directive was intentionally omitted as the keeping of anonymous accounts is already prohibited by Article 135 of the Act on Credit Institutions.
LIST THE LAWS REGARDING ANTI-MONEY LAUNDERING, INDICATING WHICH LAWS ARE APPLICABLE TO LAWYERS.
Act on Preventing and Clearing Money Laundering and Funding of Terrorism, 18 June 2008/503.
ARE VISITING LAWYERS SUBJECT TO LOCAL LAWS REGARDING ANTI-MONEY LAUNDERING, AND, IF SO, TO WHAT EXTENT?
A lawyer who is entitled to practice law as an attorney in another EEA country is subject to the professional procedural rules in force in Finland when practicing law in Finland.
LIST ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS (FOR EXAMPLE, LAW SOCIETY OR BAR ASSOCIATION GUIDELINES) CURRENTLY IN PLACE.
The rules of professional ethics of the Finnish Bar Association require lawyers that are members of the Bar and also their associates who are not members of the Bar to take into account any relevant new regulations. The Finnish Bar Association had also issued anti-money laundering guidance prior to the adoption of the new Act on Preventing and Clearing Money Laundering and Funding of Terrorism and this guidance is currently being updated to reflect the new legislation.
IS THE LAW SOCIETY/BAR ASSOCIATION INVOLVED IN SUPERVISING OR ENFORCING COMPLIANCE WITH ANTI-MONEY LAUNDERING REGULATIONS?
The Finnish Bar Association is responsible for monitoring an attorney’s compliance with the Act on Preventing and Clearing Money Laundering and Funding of Terrorism. Other entities providing legal services are supervised by the six State Provincial Offices of Finland.
DESCRIBE CLIENT DUE DILIGENCE REQUIREMENTS, INCLUDING WHEN IT MUST BE UNDERTAKEN BY LAWYERS.
Client due diligence consists of identifying the client and verifying the client’s identity. It must be undertaken (1) when establishing a permanent client relationship; (2) if the value of the transaction or related transactions to be carried out exceeds EUR 15,000 and it is an incidental client; (3) in the casino industry; (4) if it is a suspicious transaction or the entity under an obligation to report suspects funds included in the business to be used to fund terrorism or a punishable attempt thereof; or (5) if the entity under an obligation to report suspects the reliability or adequacy of information used to verify the identity of a previously identified client.
If someone acts as an agent on behalf of the actual client, the agent must be identified and his/her identity verified in addition to the client. The entity under an obligation to report must identify the actual beneficiary of the transaction and, if necessary, verify its identity.
If identification and verification is not possible, no client relationship may be established.
DOES YOUR COUNTRY FOLLOW A RISK-BASED APPROACH TO CLIENT DUE DILIGENCE BY LAWYERS?
Finland follows a risk-based approach. When assessing the risks of money laundering and funding of terrorism, the entity under an obligation to report must take into account the risks of money laundering and funding of terrorism related to its business, products, services, technological development and clients, as well as to its clients’ businesses and business activities.
ARE THERE ENHANCED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, POLITICALLY EXPOSED PERSONS?
Enhanced due diligence measures are applied to politically exposed persons, their family members and close business partners. The top management of the entity under an obligation to report must approve the establishment of a client relationship with such a person. Furthermore, the entity under an obligation to report must obtain an account of the provenance of the property and funds related to the client relationship or transaction in question. The entity under an obligation to report must maintain continuous and close monitoring of the client relationship.
ARE THERE SIMPLIFIED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, LISTED COMPANIES?
Simplified due diligence measures are applied to listed companies, Finnish authorities, credit institutions, financial institutions, investment management companies, fund management companies and insurance companies. These measures can also be applied if the risk of money laundering and funding of terrorism related to the client, product, service or transaction is low.
ARE LAWYERS PERMITTED TO RELY ON THIRD PARTY DUE DILIGENCE? IF YES, PLEASE DESCRIBE.
Relying on third party due diligence is permitted when such due diligence has been carried out by a credit institution, financial institution, investment management company, fund management company, insurance company, insurance intermediary, attorney or auditor that has been granted a license or has been registered in a mandatory professional register. However, the entity under an obligation to report may not rely on third party due diligence conducted by an entity that is engaged in payment transactions or currency exchange.
An entity under an obligation to report is not discharged from its liabilities under the Act on Preventing and Clearing Money Laundering and Funding of Terrorism based on the fact that a third party has fulfilled its duties relating to the recognition of the client.
WHEN IS A LAWYER UNDER AN OBLIGATION TO REPORT SUSPICIOUS TRANSACTIONS?
Section 2 of the Act on Preventing and Clearing Money Laundering and Funding of Terrorism provides a 24-point list of the entities that are under an obligation to report to the authorities. Lawyers (“attorneys, their associates and other entities providing legal services as a business or professional activity”) fall within the list of entities under an obligation to report when acting on behalf of or for the client in transactions related to the (a) purchase, sale, realization or planning of real estate or business units; (b) managing a client’s funds, securities or other assets; (c) opening or managing bank, savings and book-entry accounts; (d) arranging funds necessary for setting up or managing companies or administering enterprises; or (e) setting up, managing or being responsible for the operations of foundations/trusts, companies and similar.
DOES ATTORNEY/CLIENT PRIVILEGE AND/OR DUTIES OF CONFIDENTIALITY PROVIDE A DEFENCE OR PARTIAL/TOTAL EXCEPTION TO THE REQUIREMENT TO REPORT SUSPICIOUS TRANSACTIONS?
It is expressly stated in the Act on Preventing and Clearing Money Laundering and Funding of Terrorism that it does not apply to lawyers acting as trial counsel or trial attorney. For the purposes of the Act on Preventing and Clearing Money Laundering and Funding of Terrorism, acting as a trial counsel or a trial attorney is defined both as performing tasks directly related to a trial and providing legal advice regarding the legal position of a client involved in a criminal investigation or other pre-trial stage, as well as providing advice regarding initiating or avoiding a trial.
DOES LOCAL LAW PROVIDE ANY CRIMINAL AND/OR CIVIL INDEMNITY TO A LAWYER WHO HAS REPORTED A SUSPICIOUS TRANSACTION?
Finnish law does not provide any criminal or civil indemnity to a lawyer reporting a suspicious transaction. However, the liability for damages only arises in case certain due diligence requirements have been overlooked by the entity under an obligation to report. According to Section 39 of the Act on Preventing and Clearing Money Laundering and Funding of Terrorism, an entity under an obligation to report is liable for economic loss caused to a client due to clearing the transaction, reporting or suspending a suspicious transaction or refusing to carry out a transaction only if the entity under an obligation to report has not exercised such due diligence that can reasonably be expected of it, taking into consideration the circumstances.
ONCE A SUSPICIOUS TRANSACTION REPORT HAS BEEN FILED, IS A LAWYER ALLOWED TO PROCEED WITH THE LEGAL ADVICE/TRANSACTION, AND, IF SO, MUST CONSENT FROM AUTHORITIES BE OBTAINED FIRST?
In general, a lawyer must suspend the transaction for further investigation or refuse to carry out the transaction after filing a suspicious transaction report. However, if it is not possible to suspend the transaction or if the refusal to carry out the transaction would most likely hamper establishing the actual beneficiary of the transaction, the entity under an obligation to report may carry out the transaction, after which a report must be made immediately.
IS THERE A TIPPING-OFF PROHIBITION? IF YES, PLEASE DESCRIBE.
Lawyers are not allowed to inform their clients if information has been transmitted to the authorities.
DESCRIBE ANY RESTRICTIONS ON ACCEPTING A NEW CLIENT.
If satisfactory identification and verification of the identity of a new client as set out in the Act on Preventing and Clearing Money Laundering and Funding of Terrorism is not possible, no client relationship may be established and no services may be provided.
ARE THERE ONGOING MONITORING REQUIREMENTS FOR EXISTING CLIENTS? IF YES, PLEASE DESCRIBE.
An entity under an obligation to report must arrange for monitoring that is adequate with respect to the nature and scope of a client’s activities and the risks involved so as to ensure that the activities of such client correspond to the experience and knowledge that the entity under an obligation to report has on such client and its operations.
DESCRIBE ANY OTHER WAYS IN WHICH LAWYERS ARE AFFECTED BY ANTI-MONEY LAUNDERING LEGISLATION.
Information and documents pertaining to the identification and verification of a client must be retained in a reliable manner for five years from the termination of the permanent client relationship or from the conclusion of the transaction. The information that has to be retained is specified in Section 10 of the Act on Preventing and Clearing Money Laundering and Funding of Terrorism.
HAVE LAWYERS IN YOUR JURISDICTION BEEN IMPLICATED IN MONEY LAUNDERING, INCLUDING ANY TYPE OF COMPLAINT, ARREST OR PROSECUTION?
There have been lawyers implicated in and prosecuted for money laundering, some of whom have been convicted and some acquitted.
HAS THE FINANCIAL ACTION TASK FORCE (FATF) CONDUCTED A MUTUAL EVALUATION OF THIS COUNTRY, AND, IF SO, WHAT WERE THE FINDINGS CONCERNING LAWYERS’ COMPLIANCE WITH THE FATF 40+9 RECOMMENDATIONS?
The FATF conducted an evaluation of Finland in October 2007, which was prior to the adoption of the new Act on Preventing and Clearing Money Laundering and Funding of Terrorism.
Information provided by:
Anders Cederberg
Attorney At Law, Senior Associate Hannes Snellman Attorneys at Law Ltd
Eteläranta 8
00130 Helsinki, Finland
Telephone: +358 9 228 841 Telephone: +358 9 2288 4434
Fax: +358 9 2288 4266
E-mail: anders.cederberg@hannessnellman.com