Operations with crypto-currencies and other kinds of financial and investment activities are getting more and more popular our days. Some of them need prior legal authorisation. In the article we describe shortly issues of authorisation for the provision of financial services.
According to the Money Laundering and Terrorist Financing Prevention Act of Estonia, a company is required to have authorisation if it operates in following areas of activity:
- operating as a financial institution (which includes currency exchange);
- providing trust and company services;
- providing pawnbroking services;
- providing services of exchanging a virtual currency against a fiat currency;
- providing a virtual currency wallet service;
- buying-in or wholesale of precious metals, precious metal articles or precious stones, except precious metals and precious metal articles used for production, scientific or medical purposes.
The point of this authorisation is to control if company management understands anti money laundering legislation, has regulations and knows how to apply them.
To obtain an authorisation, in other words license or permission to operate (tegevusluba – in Estonian), company representative submits an application to the responsible state authority. Authorisation applications and requests are handled by the Estonian Financial Intelligence Unit, which is a department of the Police and Border Guard Board.
Together with application company representative submits inner regulations on preventing money laundering and terrorist financing, and also data on the actual places of service, the compliance officer and company management.
If there are any non-residents among company management members or the compliance officer is a non-resident there will be also needed a certificate of the criminal records database, which certifies the absence of a penalty for an offence against the authority of the state or a money laundering offence or another wilfully committed criminal offence. This document shall be properly legalized and translated into Estonian.
It will take up to 30 days and authorisation will be granted to a company where:
- a member of its management body, procurator, beneficial owner and owner do not have any unexpired penalty for a criminal offence against the authority of the state, criminal offence relating to money laundering or another wilfully committed criminal offence;
- the compliance officer appointed by the company meets the requirements provided for by law;
- the company subsidiary for whose activities the authorisation to be applied meets the requirements specified in clauses 1 and 2 of this list.
There is no need for authorisation if a company possesses already a licence (action permit) issued by Financial Inspection.