Estonia

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Overall Phase 2 Rating is Compliant

Table of Determinations and Ratings of the Combined Review

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Largely Compliant.  Prior to the amendment of the Money Laundering Prevention Act, beneficial ownership information on partnerships was not ensured to be available. Although new rules related to the identification of beneficial owners came into force, Estonia has not taken adequate implementation measures. New provisions on beneficial ownership are not yet complemented by any detailed guidelines. Further, relevant authorities have not yet developed a plan of supervision.  Estonia is recommended to monitor the implementation of new provisions relating to beneficial ownership. 
The definition of beneficial owner of foundations in the Money Laundering Prevention Act 2017 is not clear and there is no guidance issued yet. The application of the new rules that relate to beneficial owners of foundations remains to be tested in practice.   Estonia is recommended to monitor that all beneficial owners of foundations are identified in practice.  
Notaries and accountants do not appear to consistently verify information received from entities in the course of their duties. Moreover, the FIU’s supervision of accountants and service providers is very low.  Estonia is recommended to supervise legal requirements pertaining to ownership information and to exercise its enforcement powers where necessary. 
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.  The definition of beneficial owner of foundations in the Money Laundering Prevention Act 2017 is not clear and there is no guidance issued yet. The application of the new rules that relate to beneficial owners of foundations remains to be tested in practice.   Estonia is recommended to monitor that all beneficial owners of foundations are identified in practice.  
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.  Estonian law requires the documents of liquidated companies to be held by the liquidator or other depository. However, in 5 cases the Estonian authorities were unable to reach the designated depository and the accounting information could not be obtained.  Estonia is recommended to ensure that it is able to access accounting information of liquidated companies in all cases. 
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.  Estonia introduced new notification rules which became effective from beginning of April 2017. However, Estonia has not yet applied these new requirements in practice.  Estonia is recommended to monitor that the practical application of the new rules that concern notification is in line with the international standard. 
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.      
Phase 2 Rating Factors Recommendations
Compliant.  The competent authority did not provide status updates in all cases of requests taking longer than 90 days to answer.  Estonia should provide status updates in all cases where requests take longer than 90 days to fulfil. 

Earlier self-assessment based annual reports entitled Tax Co-operation 2010: Towards a Level Playing Field are also available.