Estonian court overturns Financial Intelligence Unit's fine against LHV Pank

Estonian court overturns Financial Intelligence Unit's fine against LHV Pank. Photo: Peeter Langovits

The Estonian Harju County Court has annulled in full a fine of 300,000 euros imposed on LHV Pank by the Financial Intelligence Unit (FIU) in early May and has terminated the misdemeanor proceedings against LHV.

The court found that the case lacked the necessary elements of a misdemeanor, the bank told the stock exchange. The Financial Intelligence Unit has 15 days to appeal the Harju County Court’s order.

The FIU proceedings concerned two episodes in 2022, where it was concluded that LHV Pank should have applied better due diligence measures, and one episode in January 2023, where, according to the decision, LHV Pank failed to notify the FIU in a timely manner about a transaction violating financial sanctions and the imposition of a financial sanction. The deficiencies in legal compliance were deemed to have occurred due to negligence.

LHV Pank responded by stating that it takes regulatory compliance very seriously and has implemented all necessary solutions to fulfill its due diligence obligations related to financial sanctions. However, the bank appealed the misdemeanor penalty in court.