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Estonian FIU Increases AML Supervision

Article authored by Njord Law Firm

Gambling operators would be mistaken to think that they in Estonia they are solely supervised for the gambling related activities (e.g. responsible gaming, game rules, technical set up and requirements etc). Gambling operators are also obliged entities under AML laws and as such are supervised by the local AML authority. In Estonia that is the Financial Intelligence Unit (FIU).

The Estonian FIU has recently started to pay more attention towards gambling operators. That attention includes a requirement for operators to submit information and statistics on their customer base, due diligence measures conducted, use and acceptance of crypto currencies etc.

The requirement to submit information was sent to market participants, however several participants were unable to answer by the deadline provided by the FIU. There are several suspected reasons for this. First, the request for information came from the FIU, i.e. a regulator that is not at the top of mind of most gambling operators compared to the general gambling authority (the Tax and Customs Board). It’s likely that most operators have not had previous experience with the FIU and as such did not recognise the correspondence as being valid or relevant. For instance, there have been situations where the e-mails were treated as spam by the e-mail filters used by the operators.

Secondly, the request for information was sent in a digitally signed format that is proprietary to Estonia. Many gambling operators licensed in Estonia are actually not Estonian entities and as such do not always have personnel that can process and open the digitally signed files.

Thirdly, there were several instances where the official contact information listed in the Estonian registers for gambling operators was outdated and incorrect. Therefore, the correspondence was simply not received.

The consequences for not answering to the request for information were monetary fines that were issued to many market participants. The size of the fine issued gambling operators that did not respond for one reason or another was 2500€.

The lessons that can be learned by gambling operators in Estonia from this are the following. First, do not forget that you are also regulated by the AML authorities and have compliance responsibilities related to that side of the service as well. Secondly, recognise that you are providing a service in Estonia, which means you should be able to use and open documents and correspondence that has been signed with the Estonian digital signature. Thirdly, make sure that the contact information is always up to date and you can be reached by any and all relevant regulatory authorities in Estonia.