Name
Global FinTech Guide
Country _ Name
Finland
SectionTitle
KYC requirements
Body
The know your customer or know your client (KYC) guidelines and regulations for financial services require that professionals try to verify the identity, suitability, and risks involved with maintaining a business relationship.

Legal affairs

National regulatory framework regarding AML and effective date of the regulations

Finland's national AML framework is primarily guided by the Anti-Money Laundering Act (444/2017), which is overseen by the Ministry of Finance. The AML framework is based on EU directives and regulations, which are either transposed into national law or applied directly. In addition, the framework incorporates international standards, in particular the recommendations of the Financial Action Task Force and the newly established EU Authority for AntiMoney Laundering and Countering the Financing of Terrorism (AMLA). Several ministries, including the Ministry of Justice, the Ministry of the Interior and others, play a role in coordinating AML efforts.

The regulations are aimed at preventing money laundering and terrorist financing, with a comprehensive national risk assessment and international coordination led by the Ministry of Finance. Finland's current AML legislation is heavily influenced by FATF and EU guidelines, ensuring compliance with global standards.

National regulator or relevant authority for AML controls

The national regulators and competent authorities for AML controls in Finland include several key ministries and supervisory bodies:

  • Ministry of Finance: Oversees the Anti-Money Laundering Act and coordinates national and international AML regulations, including Financial Action Task Force (FATF) and EU directives.
  • Ministry of the Interior: Responsible for the Financial Intelligence Unit (FIU) and the National Terrorist Financing Risk Assessment, as well as the National Strategy to Combat the Black Economy.
  • Financial Supervisory Authority (FIN-FSA): Supervises financial sector entities, credit providers and peer-to-peer loan brokers for AML compliance.
  • Finnish Patent and Registration Office: Manages the registration of beneficial ownership information and ensures compliance with AML legislation.
  • Southern Finland Regional Government Office: Supervises other obliged entities outside the financial sector.
  • Financial Intelligence Unit (FIU): Operates under the National Bureau of Investigation to prevent, detect and investigate money laundering and terrorist financing.
Other authorities, such as the National Police Board and the Tax Administration, play a supporting role in the enforcement of AML obligations.


Customer Due Diligence

Conduct of a typical KYC identification process

A typical KYC (Know Your Customer) identification process under Finnish law includes the following steps:

  • customer identification and verification of identity; 
  • identification, and where necessary, verification, of the beneficial owner (identifying ownership exceeding 25% and control relationships in the customer);
  • identification and verification of the customer's representative;
  • obtaining information on the customers’ activities, the nature and extent of their business, and the grounds for the use of the service or product;
  • retention of customer due diligence information;
  • obligation to obtain information and report suspicious transactions;
  • internal instructions, training, contact persons, decision-making process;
  • development and use of risk-management and continuous monitoring methods.
This streamlined process ensures compliance with the Finnish Anti-Money Laundering Act and the EU regulations.
A supervised entity or its employee may be sentenced to punishment for failure to comply with the obligations of customer due diligence and prevention of money laundering and terrorist financing under the Act on Detecting and Preventing Money Laundering and Terrorist Financing (Anti-Money Laundering Act, AML Act).

Possibility to meet customer due diligence requirements by relying on third parties who are obliged by law themselves to comply with AML regulations

Customer due diligence requirements can be met by relying on a third party provided that the third party complies with the applicable AML laws.

Possibility to outsource customer due diligence by contract to other third parties who are not obliged by law to meet AML regulations and rely on these (e.g., WebID, IDnow, PostIdent)

A customer may also be identified, and identity be verified, on behalf of the supervised entity, an agent who may be either another obliged reporting entity or another reliable cooperation partner. Customer due diligence information and documentation concerning the customer relationship must be submitted to the supervised entity or be available to the supervised entity without delay. 

Presence of a license or registration requirement for the third party in case of outsourcing customer due diligence

No specific license or registration is required solely for offering KYC/customer due diligence services in Finland.


Further questions

Entities that could be relied on specifically by law as a third party to comply with AML regulations (regardless of outsourcing)
Yes credit institutions
Yes financial institutions
Yes auditors, external accountants, and tax advisors
Yes notaries and other independent legal professionals
Yes other trust or company service providers
  estate agents
  other persons trading high-value goods
  providers of gambling services


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