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New Penal Code clamps down on credit institutions

28.10.2002

The new Penal Code of Estonia recently entered into force. Among other things, the code introduces new punishments for violations in the banking sector.

Pursuant to the amendments, the following misdemeanours committed by credit institutions are punishable by a fine:

• violation of the prudential ratios;
• failure or refusal to submit or disclose mandatory information (ie, reports, explanations or other data or documents) to the Estonian Financial Supervision Authority;
• submission of incorrect or inadequate information to the Financial Supervisory Authority;
• violation of the procedure for settlements; and
• illegal disclosure by a credit institution's manager or employee (or other person acting in this capacity) of any data subject to banking secrecy.

Previous provisions of the Credit Institution Act concerning liability are repealed. Liability for violation of prudential ratios and illegal disclosure of banking secrecy data are new crimes under the code. The fines they incur are substantially smaller than those imposed for violations in the banking sector before now.

Changes to the Money Laundering Prevention Act include liability for failure to submit mandatory information by an employee of a credit or financial institution.

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