FATF AML Deficiency List
Finland is not on the FATF List of Countries that have been identified as having strategic AML deficiencies
Compliance with FATF Recommendations
The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Finland was undertaken in 2019. According to that Evaluation, Finland was deemed Compliant for 8 and Largely Compliant for 23 of the FATF 40 Recommendations. It was deemed Highly Effective for 1 and Substantially Effective for 3 of the Effectiveness & Technical Compliance ratings.
US Department of State Money Laundering assessment (INCSR)
Finland was deemed a ‘Monitored’ Jurisdiction by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR). Key Findings from the report are as follows: -
Finland is not a regional center for money laundering, financial crime, or illegal commerce. The major sources of illegal proceeds in Finland relate to financial crimes, and the majority of investigated suspicious financial activities have an international dimension. The number of organized criminal groups has grown slightly in the past few years, as has the number of their members (totaling approximately 1,000). Illicit funds are normally laundered through currency exchanges and gaming establishments. According to the National Bureau of Investigation, the use of virtual currency, such as bitcoin, as well as phone transactions have become more common in money laundering cases. In November 2015, the Finnish Security Intelligence Service (SUPO) reported that the risk of terrorism in Finland had increased from “very low” to “low” since June 2014, when the last assessment was published. Finnish authorities vigorously investigate terrorism-related fundraising.
In September 2015, the Police University College published Finland’s first national risk assessment of money laundering and terrorist financing. The report found that the key risk items of money laundering and terrorist financing in Finland are associated with real estate investments, transport of cash, front companies, online services, online shadow financing markets, and customer fund accounts.
There are no international sanctions currently in force against this country.
BRIBERY & CORRUPTION
Rating (100-Good / 0-Bad)
Transparency International Corruption Index 85
World Governance Indicator – Control of Corruption 99
Corruption does not impact businesses operating in Finland. The Finnish regulatory system is transparent, and administrative corruption is almost non-existent. The Criminal Code contains provisions against active and passive bribery, embezzlement, fraud and abuse of office, and persons and companies can be held liable for offences. Facilitation payments are prohibited, while the propriety of gifts and hospitality depends on their value, the intent and the potential benefit obtained. Corruption is limited due to an administrative culture of transparency and openness, a strong system of internal and external controls, and the involvement of civil society in the management of public affairs. Isolated incidents of corruption and favouritism do occur, primarily at the local level, where the interests of businesses and local politicians are sometimes improperly linked in so-called ‘old-boys networks’. For further information - GAN Integrity Business Anti-Corruption Portal
Finland has a highly industrialized, largely free-market economy with per capita GDP almost as high as that of Austria, Belgium, the Netherlands, or Sweden. Trade is important, with exports accounting for over one-third of GDP in recent years.
Finland is historically competitive in manufacturing - principally the wood, metals, engineering, telecommunications, and electronics industries. Finland excels in export of technology for mobile phones as well as promotion of startups in the information and communications technology, gaming, cleantech, and biotechnology sectors. Except for timber and several minerals, Finland depends on imports of raw materials, energy, and some components for manufactured goods. Because of the cold climate, agricultural development is limited to maintaining self-sufficiency in basic products. Forestry, an important export industry, provides a secondary occupation for the rural population.
Finland had been one of the best performing economies within the EU before 2009 and its banks and financial markets avoided the worst of global financial crisis. However, the world slowdown hit exports and domestic demand hard in that year, causing Finland’s economy to contract from 2012-14. The recession affected general government finances and the debt ratio.
Finland's main challenges will be reducing high labour costs and boosting demand for its exports. In the long term, Finland must address a rapidly aging population and decreasing productivity in traditional industries that threaten competitiveness, fiscal sustainability, and economic growth. The depreciating ruble and Russia’s general economic slowdown will dampen exports to Russia.
Agriculture - products:
barley, wheat, sugar beets, potatoes; dairy cattle; fish
metals and metal products, electronics, machinery and scientific instruments, shipbuilding, pulp and paper, foodstuffs, chemicals, textiles, clothing
Exports - commodities:
electrical and optical equipment, machinery, transport equipment, paper and pulp, chemicals, basic metals; timber
Exports - partners:
Germany 13.9%, Sweden 10.1%, US 7%, Netherlands 6.6%, Russia 5.9%, UK 5.2%, China 4.7% (2015)
Imports - commodities:
foodstuffs, petroleum and petroleum products, chemicals, transport equipment, iron and steel, machinery, computers, electronic industry products, textile yarn and fabrics, grains
Imports - partners:
Germany 17%, Sweden 16%, Russia 11%, Netherlands 9.1%, Denmark 4.1% (2015)
Investment Climate - US State Department
Finland is a Nordic country located in Northern Europe with a stable and modern economy. Finland is a member of the European Union and part of the euro area. The Government of Finland (GOF) is open to foreign direct investment (FDI) and offers a business-friendly environment. The country has a highly-skilled, educated and multilingual labor force, with strong expertise in Information Communications Technology (ICT), ship building, and renewable energy. Key challenges for foreign investors include a rigid labor market, powerful unions, and bureaucratic red tape in starting certain businesses. In 2014, the FDI flow into Finland increased by 17.2 billion USD. During the same period, Finland received 11.8 USD in portfolio investment.
The GOF has taken steps to attract foreign investment by creating a network called Team Finland that promotes foreign investment and promotes the country’s international image. This one-stop shop brings together the services of a variety of state-funded agencies. Both foreign and domestic companies can benefit from GOF investment incentives, research and development support, and innovation systems. The U.S. Embassy in Helsinki, through the Foreign Commercial Service and Political/Economic Sections, is a strong partner with U.S. businesses that wish to connect to the Finnish market. Finnish companies are very active in the fields of information technology, energy, biotech, and clean technology. With excellent transportation links to the Nordic-Baltic region and Russia, Finland can be a good hub for establishing regional operations.
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