FIN-FSA’s increased anti-money laundering resources are much needed

Finance Finland (FFI) supports the Finnish Financial Supervisory Authority’s (FIN-FSA) decision to strengthen anti-money laundering supervision. FIN-FSA’s decision was made in response to the country report published by the global Financial Action Task Force (FATF) against money laundering and terrorist financing.

In its report, the FATF concluded that the state of Finnish anti-money laundering and counter-terrorist financing is overall at a relatively good level. Finnish anti-money laundering supervision, however, scored a low effectiveness rating in the evaluation.

This year, FIN-FSA will introduce a new risk-based supervision model. FIN-FSA will also double the personnel resources in its anti-money laundering unit.

“FIN-FSA’s decision is welcome. Having more supervision resources will help enhance the cooperation between the authorities and banks”, says Risto Karhunen, head of security and loss prevention at FFI.

Banks are also invested in the battle against money laundering. Last year, they reported about 9,000 suspected cases of money laundering. Out of the total 39,000 cases reported by those legally obligated to do so, only some 50 led to asset freezing. Pre-trial investigations were also launched in roughly the same number. According to Europol, the situation is not much better at the European level, leaving much to be desired in the ratio of input to output.

Karhunen proposes that Finland should instate a collaborative working group with representatives from the police, banks, and relevant ministries, such as the Ministry of the Interior and the Ministry of Economic Affairs and Employment. The group should convene at regular intervals.

“Similar working groups have produced positive results in other countries, for example the Netherlands and the UK.”

Inter-bank information exchange must be facilitated

Money laundering is highly international in nature. Inter-bank information exchange on suspicious transactions could prevent crimes in which the window of opportunity is sometimes measured in minutes. At the moment, banks are not permitted to exchange information on mule accounts or the possibly illegal money transfers to these accounts.

“The process of reporting a suspicious case to the authorities is currently very time-consuming, so there’s a risk that the suspect funds can be transferred to an unknown location before we can take action. Even if the perpetrator is caught, these illicitly acquired funds cannot be retrieved”, Karhunen says. Suspicious transactions must be accessed and interrupted without delay, which requires that banks gain permission for direct mutual information exchange. “Every minute of time lost makes it harder to get to the truth”, Karhunen contemplates.

The FATF is an inter-governmental body that was established in 1989. It sets international standards for combatting money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction. The FATF has members from 36 countries. Finland has been a member since 1991.

Ministries’ press release

FIN-FSA’s press release

FATF mutual evaluation report