The Estonian parliament has passed the first reading of a draft law. Pursuant to the draft legislations, the virtual currency service providers (the companies) that already have an activity license are given time to bring their activities into line with the requirements of the act and to provide the Financial Intelligence Unit with additional data.
Main changes proposed:
- the companies will have to follow the same requirements as financial institutions
- the registered address, the place of business and the location of the management board of the company must be in Estonia
- AML compliance officer shall be appointed. Employees performing anti-money laundering requirements shall be located in Estonia
- the state fee for issuing a license will be 3,300 euros (345 euros now)
- the process of granting a license or refusing to do so increases from 30 working days to 3 months.
The purpose of the amendments is to strengthen the competence of the regulator (FIU) in the authorization and oversight process and to lay down additional licensing requirements for corporate service providers, financial institutions and virtual currency service providers. Measures to mitigate the risks associated with these service providers would allow companies that are not actually active in Estonia and cannot be supervised in Estonia to regain control and to keep them away from the market. The main concern for FIU now is that many virtual currency service providers don’t actually plan to provide services in Estonia and supervision in the territory of Estonia is therefore practically impossible, because neither the technical platform for providing the service nor the employees performing anti-money laundering requirements are located in Estonia.