Amendments to Estonian Money Laundering and Terrorist Financing Prevention Act
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Amendments to Estonian Money Laundering and Terrorist Financing Prevention Act

Amendments to Estonian Money Laundering and Terrorist Financing Prevention Act entered into force on March 15, 2022. New rules for Estonian Crypto Companies.
Amendments to Estonian Money Laundering and Terrorist Financing Prevention Act

On March 15, 2022, an amendments to the Estonian Money Laundering and Terrorist Financing Prevention Act (RahaPTS or MLTFPA) entered into force, supplementing and amending the current procedure for license applicants, mainly virtual currency service providers.

The main changes concern the size of the company's share capital, presence of own funds, contact person requirements, members of the management board (one person can hold a position of Board Member only in two virtual currency companies), higher education and professional experience requirements, etc.

The requirements specified in §§ 70-75 of the MLTFPA, state which documents must be submitted and which requirements the company and persons related to the company must meet.

The full text of the amended law is available here. The explanatory memorandum is available on the Riigikogu website.

According to § 3 (10) and (10) of the updated MLTFPA, the company must also apply for a license of a virtual currency service provider if a virtual currency transfer service is provided (receiving, executing and transmitting virtual currency orders on behalf of third parties) or when issuing virtual currencies ICO.

For companies that have already applied for a crypto-license before 15.03.2022

The law in force at the time of submission of the application, ie the requirements according to the MLTFPA are valid at the time of processing. Thus, the law in force at the time of submission of the application shall apply to applications for or amendments to an activity license submitted before 15.03.2022, but the term for elimination of deficiencies in the activity license and/or the term for proceedings is later than 15.03.2022. However, the new wording of MLTFPA (RT I, 12.03.2022, 19), which entered into force on 15.03.2022, applies to the substantive legal norms (documents submitted with the application and the circumstances of the control object).

The procedure described above helps to ensure legal certainty for the public, as the service can only be provided by persons who comply with the applicable legal requirements. Financial Intelligence Unit explains that the issuance of activity licenses to persons who do not comply with the circumstances of the control object provided for in the Act in force since 15.03.2022 is not purposeful (§ 5 (2) of the Administrative Procedure Act). The previous situation would cause additional damage to the applicant, therefore it is more expedient to apply the additional requirements of the valid MLTFPA to the applications pending on the date of entry into force of the Act on 15.03.2022.

State fee

According to the amendments to the State Fees Act, the state fee for reviewing the application for an activity license of a virtual currency service provider has also been changed. When applying for a virtual currency activity license, a state fee of 10,000 euros must be paid for a new application. The former state fee rates, ie 3300 euros, apply to the applications for activity licenses submitted before 15.03.2022.

The Financial Intelligence Unit announces that it will issue additional instructions for applying for a virtual currency license in the near future. The guide will be published on the website of the FIU www.fiu.ee.



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