On 11.12.2019, the Estonian Parliament has passed the amendment acts of Money Laundering and Terrorist Financing Prevention Act and the State Fees Act, which enter into force on 10.03.2020. The purpose of that is to tighten the requirements for the authorization of a virtual currency service provider and a virtual wallet service provider in order to reduce the risk of money laundering and terrorist financing related to these services.
In addition to all new applicants, the requirements will also apply to the companies, who already have a valid license for virtual currency exchange and / or virtual wallet services. All present license holders shall comply with the requirements at the latest by 1st July 2020. If the company fails to do so, the FIU will withdraw the authorization. The FIU will proceed with the application and will make resolution on whether or not to grant the license during 1 month. The process to prepare everything you need is a time-consuming one and we recommend to start right now. Below there are some of the new requirements that you should consider while applying for the license.
Requirements relating to the seat of the business. The registered office, management board and place of business of the undertaking (business license holder) must be in Estonia. If a foreign company operates in Estonia through a branch registered in the commercial register, its registered office and head office must be in Estonia. According to statistics, most of the license holders are non-residents. This means that a foreign company must establish a branch in Estonia in order to comply with the requirements of the new regulation.
Requirement to the share capital. The share capital of a license holder must be at least EUR 12 000. The share capital must be fully paid up in cash.
Payment account requirement. The license holder shall have a payment account opened in a credit institution, an electronic money institution or a payment institution: (1) established in Estonia or (2) in a state of the European Economic Area, who is providing services in Estonia on a cross-border basis or operating in Estonia through a branch.
The applicant shall submit to the FIU a list of all payment accounts held on its name as well as the unique identification banking number of each payment account in order to comply with the requirements of the new regulation.
Proof of the operator’s background, suitability and good repute. The company must provide documentation on its’ member(s) of the management board and the prosecutor(s), including the level of education, a complete list of jobs and positions held (regularly for the latest 3-5 years) and, in the case of a member of the management board, alone with her or his area of responsibility (fit & proper). As a similar requirement is already included in the current law act, many of the companies have already submitted the documents referred to earlier with the application for authorization. Therefore, each company should review, which documents it has already submitted when applying for the license and then assess, which additional documents shall be provided (if any). The undertaking must also collect and submit all such additional other documents, which it deems essential to prove that its member(s) of the management board, prosecutor(s), beneficial owner(s) and the owner(s) have an impeccable business reputation.
Identity documents and documents proving the absence of criminal convictions. If the applicant, member of its management body, prosecutor, beneficial owner or a sole proprietor is a foreign national, copies of the identity documents of all nationalities must be submitted to the FIU. In such case, a certificate from the criminal record of all states of nationality, or an equivalent document issued by a competent judicial or administrative authority, certifying the absence of punishment for an offense against the state or for money laundering or any other intentional crime, are also required. No more than three months may have elapsed from the date of issue of the certificate. The certificate must be notarized or certified by equally authorized organ and supplied with the apostille or legalized respectively.
The time for processing of an application is one month starting from the date of submission of all documents and exhaustive information, thus, the time limit for processing of an application is deemed to be started only from that point. Having that in mind, i.e the preparation of everything you need is a time-consuming process, we recommend to start the process as soon as possible.
Write to us for more information: lada.riisna@cuesta.ee.