Companies and professionals who can identify risks related to money laundering or terrorist financing or be expected to be exploited for these purposes are key to the fight against money laundering and terrorist financing. Such industries include banking and investment activity, provision of virtual currency, real estate brokerage, debt collection, accounting and auditing, and provision of legal services. Private traders operating in these sectors, among others, are called obliged entities or parties subject to the reporting obligation.
The Anti-Money Laundering Act lays down the obligations for the obliged entities to comply with.
If you are an obliged entity,
- prepare a money laundering risk assessment for your own operations
- identify and know your customers
- track your customers’ activities
- submit a notice on any suspicious business transactions to the Financial Intelligence Unit
- ensure that the obligations under the Anti-Money Laundering Act are known and that employees can observe them in their everyday operations.
Risk-based assessment is one of the key concepts in the fight against money laundering and terrorist financing. Risk-based means that as an obliged entity, you identify, assess and understand the risks of money laundering and terrorist financing to which you are exposed in your own operations.
As an obliged entity, you must prepare a written risk assessment that guides your own business operations. When preparing a risk assessment, you must take into account the nature, size and scope of your business operations. After assessing the risks, you will be able to dimension the measures required by the Anti-Money Laundering Act according to the risks you have identified.
Read more on the supervisory bodies’ instructions on how to prepare a risk assessment:
Customer due diligence and identification
One of the most important obligations of an obliged entity is to know their customers. This means knowing who you are dealing with and understanding the nature of their business. The Anti-Money Laundering Act imposes a number of different obligations on you with regard to your customers. As an obliged entity, you must:
- identify your customer and verify your customer’s identity
- identify the beneficial owner of your customer and, if necessary, verify the identity of the beneficial owner
- identify the customer's representative and verify the identity of the representative
- obtain the necessary background information on the customer and their business operations, as well as the grounds for use of the service
- retain customer due diligence information.
Your due diligence obligations depend, among other things, on the permanent nature of the customer relationship, whether the customer is a politically exposed person or a family member of such a person, what the method of payment of the transaction is, whether you meet with the customer in person or whether the transaction is carried out solely through distance selling.
You can also read more detailed instructions from different supervisory bodies on customer due diligence and identification:
Knowing the customer is accompanied by an obligation to ensure that the transaction does not involve persons or entities on the sanctions list.
The supervised entity must monitor the EU regulations on sanctions and national decisions on freezing funds and check their registers, as well as monitor payment transactions and other business transactions to ensure that their customers do not include any entities on sanctions lists. If the obliged entity detects an entity on the sanctions or frozen funds list from their registers or payment transactions, the obliged entity must freeze the funds or suspend the transaction and notify the National Enforcement Authority Finland.
Compliance with EU sanctions regulations is coordinated by the Ministry for Foreign Affairs. Decisions to freeze funds based on national law are made by the National Bureau of Investigation and implemented by the National Enforcement Authority Finland.
More information on international sanctions can be found on the Ministry for Foreign Affairs' sanctions website.
Sanctions by country can be found on the website of the Ministry for Foreign Affairs.
Contact the National Enforcement Authority inenquiries related to decisions to freeze funds.
Reporting suspicious business transactions
As a party subject to the reporting obligation, you must know your customer and monitor the customer relationship throughout its duration. If you spot an unusual transaction handled by your customer, it is your responsibility to delve deeper into its background and purpose. If the transaction appears suspicious even after the investigation, report it immediately to the Financial Intelligence Unit. Also, report a transaction whenever you suspend a business transaction due to having suspicions.
For more information on suspicious transactions and reporting, see the Report Suspicion tab.
Reporting suspected violations of the Anti-Money Laundering Act
If you notice deficiencies in compliance with the Anti-Money Laundering Act of your company or partner company, or you are doing business yourself in a company where these obligations are not complied with, you can report it directly to the supervisory authorities. Each supervisory body has its own channel through which reports can also be submitted anonymously.
Links to the notification forms of the supervisory authorities
Discrepancy report on any deficiencies in the beneficial owner details
Obliged entities must notify the Finnish Patent and Registration Office (PRH) if they notice any deficiencies or inconsistencies in the information on beneficial owners in the Trade Register. In most cases, the beneficial owners are the owners of the company.
If the information on the beneficial owners entered in the Trade Register differs from the information in your possession, act as follows:
- Verify the accuracy of the information in your possession.
- If, even after the data has been verified, you consider the details in the Trade Register to be incorrect or incomplete, ask the company to update its information on the beneficial owners with the Trade Register.
- If the company does not file a notification on the beneficial owners within one week, submit a discrepancy report to the Patent and Registration Office.
- During this time, monitor the company details. You can also immediately report any deficiency or inconsistency you observe to the Patent and Registration Office.
- Please note that submitting a discrepancy report to the Patent and Registration Office does not remove or mitigate your obligation to provide information on the identify of the actual beneficial owners of the company.
Submitting a discrepancy report is free of charge.
Do not submit a discrepancy report if the company or organisation has not yet filed their notification of beneficial owners with the Trade Register. However, you should advise the company to file a notification on the beneficial owners without delay.
Obliged entities by supervisory body
The obliged entities under the Money Laundering Act include a wide range of private traders from different industries. Some sectors require a separate business licence to exercise business activities. The operator may also be obliged to enter their company in a register maintained by the supervising body. However, for some of the obliged entities, these criteria are not met. In this case, the obliged entity must register with the Anti-Money Laundering Register.
Financial Supervisory Authority
Operating or providing services in the financial markets is often regulated and subject to a granted authorisation.
The authorities issuing authorisations are the European Central Bank, the Financial Supervisory Authority, the Ministry of Finance, the Ministry of Social Affairs and Health and the Finnish Government.
Depending on the business model, the operation may require authorisation, registration or notification procedures. Use the links below to read more on the authorisation, licencing or similar procedures required for business operations.
Deposit banks and other credit institutions
Payment service providers
Mortgage credit intermediaries
Virtual currency providers
Investment service providers
Fund management companies
Alternative investment fund managers
Brexit and UK funds' and fund managers' cross-border notifications
Life, non-life and reinsurance companies
Insurance representatives (in Finnish)
Central securities depository (CSD) (Authorisation is granted by the Ministry of Finance)
Account operators (Authorisation is granted by the Financial Supervisory Authority)
Application for authorisation of a fund management company
Alternative investment fund managers (AIFM)
Consumer credit providers and peer-to-peer loan brokers
Regional State Administrative Agency for Southern Finland
All obliged entities supervised by the Regional State Administrative Agency for Southern Finland must register in one of the Trade Enforcement registers. Real estate and rental accommodation brokers, as well as debt collection agencies, must register in their own economic activity registers, while pawnbrokers are included in their own licensing list. Use the links below to find more information on the registration procedure for these operators.
Other actors supervised by the Regional State Administrative Agency must apply to the Anti-Money Laundering Register.
Debt collection companies
Real estate businesses and apartment rental agencies
Business consulting and ancillary service for investment services
Tax advisory services
Accountants and accounting firms
The Finnish Patent and Registration Office
The Finnish Bar Association
The National Police Board of Finland
Veikkaus Oy, a gambling company operating in mainland Finland
Government of Åland
Real estate businesses and apartment rental companies operating in Åland
Åland-based publicly owned gaming company Paf
Registration in the money laundering supervision register
The Anti-Money Laundering Register is maintained by the Regional State Administrative Agency for Southern Finland. The register is public and can be viewed without logging in.
The following entities have an obligation to apply to the Anti-Money Laundering Register:
- Legal services
- Financial services
- Operators providing business consulting and services related to investment services
- Company services
- Tax advisory services
- Goods dealing
- Art sales.