ESTONIA Trends and Developments Contributed by: Karolina Ullman, Triin Kaurson, Linell Raud and Felix Raidmäe, NJORD Law Firm
in the applications or the issuance of new licences can be seen.
AML risks arising from accepting bets in crypto In a recently published risk assessment, the Estonian Ministry of Finance identified the remote gambling sector as the greatest risk and vulnerability to money laundering in Estonia. As risk factors, they point out the number of foreign companies holding Estonian gambling operator licences that are based in Cyprus (ten companies) and Malta (six companies). Addition- ally, some ultimate beneficial owners hail from juris- dictions considered high-risk for money laundering, including Russia, Belarus, Georgia, and Uzbekistan. Remote monitoring has revealed that at least five ser- vice providers permit clients to make deposits and withdrawals using virtual currencies through collabo- rations with virtual currency service providers. Casi- nos have traditionally been associated with a higher risk of money laundering, where the principles of “know your customer” and “verify the source of funds” are not always consistently applied. The integration of online casinos with modern technologies further exacerbates these existing risks. The FIU has already alerted the sector to potential upcoming reviews and audits. Operators that facili- tate client transactions using cryptocurrencies may be more likely to be selected for the FIU’s scrutiny. A few years ago, similar heightened risks were identified among virtual asset providers. At that time, the FIU adopted a stringent approach, resulting in the revoca- tion of over 70% of previously issued cryptocurrency service licences following thorough reviews.
Trends regarding AML AML reviews by the FIU
For several years, the FIU has been vocal about the potential risks of money laundering and terrorist financing associated with gambling services offered by foreign companies under an Estonian licence. This concern has led to increased scrutiny and regulatory measures aimed at mitigating these risks. At the end of 2023, the FIU distributed AML question- naires to all gambling operators with Estonian licenc- es. In 2024, the FIU announced plans to commence official reviews of gambling operators and their inter- nal AML procedures. Although no audits or reviews have been reported as of the date of writing, this does not imply that they will not occur or be indefinitely postponed. The general recommendation for gambling operators is to ensure that their internal AML procedures align with their internal policies and comply with Estoni- an laws and regulations. This proactive approach is essential to maintaining compliance and mitigating potential risks. Furthermore, unlike the Tax and Customs Board, the FIU operates exclusively in Estonian and accepts documents only in this language. Consequently, in the event of reviews, audits, or queries from the FIU, gambling operators must provide input, including their AML-related internal policies, in Estonian.
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