TALLINN (Reuters) - Estonia’s far-right finance minister has been criticized by lawmakers for holding up financial reforms promised after the Baltic state became the focus of Europe’s biggest money laundering scandal.
Danske Bank (DANSKE.CO), Denmark’s biggest bank, is under investigation over suspicious payments totaling 200 billion euros ($220 billion) which were moved through its Estonian branch. It was ordered to close the branch earlier this year.
The scandal has tarnished the reputation of the Baltic state, known as a hub for digital innovation, prompting government reform pledges last October which have yet to result in new legislation.
In April, Estonian Prime Minister Juri Ratas entered a coalition with the country’s far-right EKRE party, whose popularity rose in elections. The EKRE party’s Martin Helme, who is anti-immigration and a eurosceptic, became finance minister.
“Before the election, the finance minister was very vocal about money laundering,” said Kaja Kallas, the leader of the center-right Reform Party. “In reality, he has done nothing.”
Maris Lauri, the deputy chairman of the Estonian parliament’s finance committee and a former minister of finance, said reform was delayed and blamed Helme.
“His position is that Estonia should not adopt EU rules,” she said. “He is very clearly anti-EU and that stance is the reason for the delay in the money laundering rules.”
Helme told Reuters that seeing through money laundering reforms was a priority that he took “very seriously”.
Estonia, like other EU members, is obliged to adopt a raft of European-Union-wide reforms by January to make it easier to combat money laundering by sharing intelligence internationally and showing who really owns companies and trusts.
But lawmakers in Estonia believe that time is running out to sign off on the rules in time because the parliament in Tallinn has yet to see much of the proposed legislation.
Other EU countries have also been slow to tackle the problem, but Estonia is under particular pressure to act because money laundering happened on its doorstep.
Some of the changes have wide support, such as introducing higher penalties for money laundering related offences.
A central element of reform, requiring bank customers to prove money is honestly earned rather than ask authorities to prove it was not, is contested and is set to be shelved for the time being.
Helme said he planned to introduce the EU law on time and make fines steeper but said he had first done a legal analysis to make sure the legal changes were “high quality”.
“We are making Estonian law more effective to better counter money laundering and increasing the capabilities of the authorities,” he said.
Aivar Kokk, who, as chair of the Estonian parliament’s finance committee plays a central role in passing the law, acknowledged that the new finance minister had needed time to get up to speed.
“When you go to a new field ... maybe you are a bit more skeptical,” said Kokk. “It is said that a good leader will get up to speed in six months. This six months is coming up soon.”
“We will transpose the European Union law,” he said. “But we cannot guarantee that the bill will be adopted by January or February. There is a new government who wants to review all the bills again.”
The EKRE party will tread cautiously, aware that many of its supporters are eurosceptic.
Anti Poolamets, a prominent member of Helme’s EKRE party, said: “It is important for Estonia to maintain sovereignty for ourselves ... and not hand over all these powers to the European institutions.”
Writing by John O'Donnell. Editing by Jane Merriman