Who is subject to the reporting obligation
In perspectives related to combating money laundering, such companies and professionals are in a key role who as a part of their business operations can identify risks related to money laundering and terrorist financing or who can be suspected to be used for these purposes. These sectors include banking and investment activities, exchange of currency, property brokerage, debt collection, accounting and auditing, and the provision of legal services.
Companies and professionals operating in these sectors must report any suspicious transactions they have detected that may be related to either money laundering or terrorist financing to the Financial Intelligence Unit (FUI).
The reporting obligation laid down in the Act on Detecting and Preventing Money Laundering and Terrorist Financing includes a wide range of traders in different sectors. Some sectors require a separate authorisation to operate in their sector. The operator may also be obliged to enter in a register maintained by a party supervising business activities in the sector. However, some of the parties subject to the reporting obligation do not meet either of these criteria. In this case, the party subject to the reporting obligation must register to the money laundering supervision register.
Sectors requiring authorisation and applying for the authorisation
Sectors requiring a separate authorisation by the supervising authority:
Financial Supervisory Authority:
Operating or providing services in the financial markets is often regulated and subject to authorisation.
Authorities granting authorisations include the European Central Bank (ECB), the Financial Supervisory Authority (FIN-FSA), the Ministry of Finance and the Ministry of Social Affairs and Health as well as the Government.
Depending on the business model, business activities may require authorisation, registration or notification. The links below give you more information on authorisations or similar procedure required for the operation.
Insurance representatives (in Finnish)
Central securities depository
Authorisation is granted by the Ministry of Finance
Authorisation is granted by the Financial Supervisory Authority
See management companies and alternative investment fund managers
Regional State Administrative Agencies
Debt collection companies
A trader who collects claims on behalf of another party or owns claims in cases in which it is obvious that the claims have been received solely for recovery purposes must apply to be entered into the register of debt collectors. The applicant submits a notification to the registry in order to apply to the register of debt collectors, fills in all the information requested in the form and submits the necessary attachments.
The Regional State Administrative Agency will check the accuracy and adequacy of the information and documents submitted and determine the reliability and solvency of all persons responsible and request further clarification if necessary, after which a decision will be made. The decision is subject to a fee whether it is positive or negative.
Real estate businesses and apartment rental agencies
According to the Act on Real Estate Businesses and Apartment Rental Agencies (Dec. 15, 2000/1075), real estate and apartment rental business refers to activities in which the contracting parties are brought into contact with each other in order to obtain income or other economic benefits. This Act does not apply, for example, to occasional (no more than 5 assignments per year) brokering activities if the activities are not marketed.
The Regional State Administrative Agency keeps a register of real estate agencies (register of estate agencies). A person intending to engage in real estate activities must submit a notification to the Regional State Administrative Agency in whose area of operation the management of the business is primarily to be carried out for the purposes of entry in the register. Brokerage activities may be started after the Regional State Administrative Agency has made the decision on the registration and the brokerage company has been entered in the register of estate agencies. The average processing time for the notification to start business operations is two weeks.
Peer-to-peer lending intermediaries
According to the Act on the Registration of Certain Credit Providers and Credit Intermediaries (853/2016), the Regional State Administrative Agency for Southern Finland keeps a national register of lenders and peer-to-peer lending intermediaries and supervises compliance with the Act.
A pawnbroker is a limited liability company established for the purpose of pawnbroking and has received authorisation to start operations.
Pawnbroking refers to the provision of financial loans as the main business to natural persons against a movable pledge. The pawnbroker shall not receive deposits or other repayable funds from the public. The party taking out a loan is not personally liable for the loan. The pledge, which can only be a cash pledge, is the only security for the loan.
The following information must be attached to the authorisation application:
- a clarification on the owners of the pawnbroker and their shareholdings;
- a clarification on the administration and the persons managing the administration;
- charter of foundation;
- other reports deemed necessary by the Regional State Administrative Agency.
A permit shall be granted to a pawnbroker if, on the basis of a report on the reliability and suitabiliity of the owners and administrative persons of the pawnbroker, it can be ensured that the pawn-broker will be managed professionally, reliably and in accordance with sound and prudent business principles, and that the pawnbroker will otherwise comply with the provisions of the Pawnbroker Act. The authorisation is granted by the Regional State Administrative Agency.
Operators subject to the reporting obligation by the supervising authority
Financial Supervisory Authority
Deposit banks and other credit institutions
Payment service providers
Virtual currency service providers
Investment service providers
Fund management companies
Alternative investment fund managers
Life and non-life insurance companies
Central securities depository
Regional State Administrative Agency for Southern Finland
Legal services Financial services
Peer-to-peer lending intermediaries
Operators providing business consulting and services related to investment services
Debt collection companies
The Finnish Patent and Registration Office
The Finnish Bar Association
The National Police Board of Finland
Government of Åland
Real estate businesses and apartment rental companies operating in Åland
Gambling sector operating in Åland
Registration in the money laundering supervision register
A large number of those subject to the reporting obligation operate in a business sector that re-quire an authorisation. The operator may also be obliged to enter in a register maintained by the authorities supervising business activities in the sector.
However, some of the parties subject to the reporting obligation do not meet either of these criteria. In this case, the party subject to the re-porting obligation must register to the money laundering supervision register. Registration in the money laundering supervision register is subject to a fee.
The money laundering supervision register is maintained by the Regional State Administrative Agency for Southern Finland. The register is public and can be viewed without logging in.
Operators under the supervision of the Regional State Administrative Agency for Southern Finland must register in a register for the supervision of trades. If the operator has already registered with another Regional State Administrative Agency's supervision register, they do not need to apply to be entered in the money laundering supervision register. These operators include debt collection agencies, consumer credit providers, brokerage companies for real estate and rental apartments, and pawnbrokers, all of which are part of their own authorisation list.
Companies subject to the reporting obligation play a key role in preventing and investigating money laundering and terrorist financing, as they provide the authorities with the best opportunities to obtain information on suspicious transactions. Registering parties subject to the reporting obligation in the money laundering supervision register improves the reporting and collection of information as it is possible to keep in contact with the supervised parties.
The following operators have an obligation to apply to the money laundering supervision register:
- Legal services
- Financial services
- Peer-to-peer lending intermediaries
- Operators providing business consulting and services related to investment services
- Brokerage companies
- Debt collection companies
- Company services
- Tax advice
- Goods dealing
- Art dealing
More detailed instructions for companies needing to register can be found on the website of your regional state administrative agency.
How long will it take to process the application?
The processing of the application takes approximately two weeks. The processing time depends on the number of applications and any necessary further clarification.
How much does it cost to register?
Registration in the money laundering supervision register is subject to a fee. The registration fee is EUR 200. The registration fee for business service providers and currency exchangers is EUR 355. The fees are laid down in the Government Decree. The registration fee is invoiced separately after the registration decision. Payments are directly enforceable without a separate decision.
Compliance with the Money Laundering Act
The Money Laundering Act contains provisions on the procedures that the party subject to the reporting obligation must follow. For example, the party subject to the reporting obligation must identify the risks related to their sector and plan and implement their prevention in a risk-oriented manner. The party subject to the reporting obligation must also identify, know and monitor their customers and their activities.
Notification on a suspicious transaction
Links to the notification forms of the supervisory authorities:
The Police online tip line: allows you to report a suspected violation of the Money Laundering Act concerning the gambling sector or its agents:
Authority supervising the lottery in Åland: you can report games that you suspect to violate the Lotteries Act or suspected money laundering through the following link
Supervisory notification on beneficial owner data
The parties subject to the reporting obligation, the supervisory authorities and the Finnish Bar Association must notify the Finnish Patent and Registration Office (PRH) if they observe shortcomings or inconsistencies in the beneficial owner information in the Trade Register.
If the beneficial owner information entered in the Trade Register differs from the information you have received:
- Verify that the information you have is correct.
- If, after confirming the information, you believe that the information in the Trade Register is incorrect or incomplete, ask the company to update the beneficial owner information on the Trade Register.
- If the company does not submit a notification on the beneficial owners within a week, submit a supervisory notification to the PRH. Keep track of the company's information during this time. You can also report any shortcomings or inconsistencies you notice immediately to PRH.
Please note that submitting a supervisory notification does not remove or mitigate your obligation to identify the beneficial owners of the company.
The supervisory notification is free of charge.
Do not submit a supervisory notification if the company has not yet filed a notification on the beneficial owners with the Trade Register. However, you should advise the company to submit the notification without delay.
Identifying and knowing your customer
Knowing and identifying your customer is one of the cornerstones of combating money laundering. The Money Laundering Act imposes several different obligations on you in relation to your customers. Your obligations depend on the following, among other factors:
- the composition of your customer base
- permanent or changing customer base
- the place of residence or political status of your customers
- private or legal person
- form of your business
- physical sales or service point or online shop
- the nature and manner of payment of an individual transaction
- non-standard transaction and/or cash payment
See the links below for detailed instructions from different supervisory authorities on knowing and identifying your customers:
Financial Supervisory Authority
Know your customer
Make sure that the transaction does not involve any persons or entities that are on the sanctions list. If no restrictions are imposed to the export of products due to sanctions, the next step is to ensure that the business partner or other persons and entities involved in the transaction that are located in a sanctioned country are not on the sanctions list.
The list of persons and entities subject to sanctions can also be found in the Annex to the current Sanctions Regulation. The persons on the list must be refused all transactions and the transactions that have already been started must also be suspended without delay. In addition, the persons or entities listed in the sanctions list must not be contracted for e.g. transport, financing or banking services.
It is prohibited to even indirectly release any property to any person or entity mentioned in the sanctions list. In other words, exporting is prohibited even through an intermediary if the goods, technology or know-how to be exported would be used or utilised by an entity on the sanctions list.
Releasing property through an intermediary might include an apparent company who actually acts on behalf of a listed entity to obtain goods from the EU. The risk of such intermediary action is particularly high, for example, when a foreign buyer is owned by a listed person or company.