Estonia, a country embroiled in a money laundering scandal involving a small branch of Denmark’s Danske Bank, has rejected a critical part of proposed anti-money laundering (AML) legislation, according to Reuters.
The proposed part of the legislation would compel individuals suspected of profiting from seemingly suspicious financial dealings to prove that their money came from so-called legitimate sources. It was rejected on Thursday (Jan. 17) because a parliamentary committee didn’t think it was specific enough, and didn’t like the implication that an innocent person would have to defend themselves.
Last year, Danske Bank said payments that totaled 200 billion euros ($228 billion) had passed through the Estonian branch between ‘07 and ‘15. Since then, the country has been under a regulatory microscope.
There are other plans, besides the legislation, to combat money laundering in the country, including raising the amount a financial institution can be penalized and allowing more power to the Financial Intelligence Unit.
When it comes to forcing people to disclose the source of their wealth, however, the measure wasn’t taken lightly at all. Jaanus Karilaid, the head of parliament’s Legal Affairs Committee, said he didn’t want the measure to hurt innocent people.
“The current wording is not specific enough, and of course, we do not want to create anxiety for honest people,” Karilaid said.
He added that the axing of that part of the proposal doesn’t mean a reworked version won’t be included in the legislation before its first reading in the country’s parliament, which happens next week. However, some independent lawyers told Reuters that they don’t think it will be revised.
The way the law works now is that prosecutors have to show that a suspect’s money was obtained illegally. The proposal would put that burden on the suspect.
Also, 10 former employees of the Estonian branch of Danske Bank were arrested in December after an investigation into the laundering.
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