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TEHRAN, Feb 02 -Estonia’s push to become a digital society has left it vulnerable to dirty money and sanction breaches, the country’s top banking regulator has warned.
TEHRAN, Young Journalists Club (YJC) -The Baltic state took center stage in one of the largest-ever money laundering scandals last year - the Estonian branch of Danske Bank helped funnel money from Russia and other ex-Soviet states, a report by the Danish lender showed.
Danske Bank is now being investigated in Denmark, Estonia, Britain and the United States over the 200 billion euros ($227 billion) of suspicious payments.
The Danske debacle was rooted in old school subterfuge – offshore shell companies were used to disguise where the money was coming from.
But Estonia’s population of e-residents, some of whom bank in the country even though they live abroad, potentially offers a high-tech route for suspect funds.
“The lesson of Danske is, I hope, enough for us,” Kilvar Kessler, the head of Estonia’s financial watchdog, the Finantsinspektsioon, told Reuters. “You onboarded customers which were offshore companies.”
“Now e-residents. Exactly the same questions will be asked. Who are they? Why do they need a bank account in Estonia?”
A former Soviet-occupied state on the edge of Europe, Estonia has remodeled itself as a hub for digital innovation through ‘e-Estonia’, a government-sponsored project to move almost all bureaucratic tasks, from voting to medical prescriptions, online.
A key part of e-Estonia is e-residents, foreigners who have been given a digital identity card allowing them to access some online services such as government portals. It can also be a stepping stone to banking in Estonia, a member of both the European Union and the euro zone currency bloc.
Anyone can apply, including citizens of countries subject to U.S. sanctions such as Iran and North Korea.
Banks including Estonia’s largest locally-owned lender LHV, as well as Sweden’s SEB Bank and Swedbank, allow e-residents to open accounts after they prove their identity and business links to Estonia.
Source:Reuters
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