We Know Our Customer

We ask for your personal and contact details, information on your income and workplace, details of company ownership and control, information about your main operations and objectives and details about your ID document(s). We might also ask you to submit bank statements for earlier periods.

We ask for information about transactions and other activities so we can detect unusual or suspicious transactions that could point to fraud. We’re also obliged to monitor transactions for the prevention and obstruction of money laundering and terrorist financing. This protects your account against potential fraud and ensures a secure banking service.

We need to be satisfied that the information you provide us with is correct, which is why we ask you to submit additional documents where necessary – precisely because we can’t always rely on data from transactions or registers, but can be satisfied on the basis of documents or data provided to us.

Click here for more information on our risk appetite in regard to the prevention of money laundering and terrorist financing and the implementation of international sanctions.

Banks being obliged to keep up to date on what their clients are doing isn’t a one-off thing. A bank can gain a lot of the information it needs about a client in the course of its day-to-day services (e.g. when the client performs transactions or takes out a loan), but there are certain data which the law requires to be updated and that the bank can’t obtain without asking the client. Such data include the client’s contact address, their tax residency and the details of where they work.

Updating client data can’t be an automated process based solely on transactions and registers, but has to be done by communicating with the client, if for no other reason than to enable the bank to make sure the data it receives are correct (and valid).

In addition to the regular updating of data, a bank may contact a client about a transaction they’ve performed. There may be several reasons for this: for example, the transaction may differ noticeably from those the client normally makes, or in the case of cross-border payments, the bank processing the transaction may be asked to clarify it.

We have to collect information on actual beneficiaries so as to comply with our obligations under the Money Laundering Prevention Act and the Tax Information Exchange Act.

An actual beneficiary, also known as a beneficial owner, is a natural person who ultimately controls another natural or legal person or for whose benefit, to whose advantage or on whose behalf a transaction or operation is performed.

Actual beneficiary status can be endowed by either the direct or indirect exercising of control. Direct control is when a natural person holds more than a 25% share in a company. Indirect control is when more than a 25% share in a company is held by another company controlled by a natural person or by several companies controlled by the same natural person.

The actual beneficiary of a private client’s bank account is the person who holds or controls the account and directly benefits from it. If the account is actually controlled by someone else, the bank should be informed of this as soon as possible.

Guidelines on identifying actual beneficiaries can be found on the website of the Ministry of Finance.

TEKSA is a database of actual beneficiaries which enables us to check on an ongoing basis the conformity of the beneficiaries submitted to us and, if a discrepancy is found, to ask companies to check which databases have yet to be updated and to update them accordingly. If they don’t, we as a bank are obliged to file a discrepancy report with the Commercial Register, which then flags up the company’s data in TEKSA. We have the right to terminate the customer relationship should we choose to do so.

We ask for the following details regarding actual beneficiaries: name; personal ID code; the country in which the ID code was issued, or date and country of birth; tax residency; tax identification number; e-residency; residential address; and how the company is controlled and the size of the share.

To prevent misunderstandings, we ask you to provide accurate information and to inform both us and the Commercial Register if there is any change in the actual beneficiaries.

Section 76(1) of the MLTFPA obliges legal persons to collect and retain information about their actual beneficiaries. The act also lists the following exceptions, i.e. those who don’t have to enter their beneficiaries in the register:

• Apartment associations
• Building associations
• Companies listed on a regulated market
• Foundations whose economic activities are aimed at accumulating or maintaining assets for the benefit of the beneficiaries or group of beneficiaries indicated in its statutes and which have no other economic activities
• Subsidiaries

Notwithstanding the foregoing, Section 20(1)(3) of the MLTFPA obliges banks to implement due diligence measures in regard to clients, which involves the identification of their actual beneficiaries. If an actual beneficiary is unable to be identified based on their shareholding, then a member of a higher management body (e.g. the chairperson of the management or supervisory board or, in their absence, all of the members of a higher management body) must be marked as the actual beneficiary.

State-owned companies - These are private legal persons in which the state is a shareholder.

The following should be marked as the beneficiary:

• The minister responsible for the relevant field who represents the state and appoints the members of the supervisory board
• The chairperson and members of the supervisory board
• The chairperson and members of the management board

Trusts - The natural person in control of the trust’s assets should be marked as the beneficiary:

• The founder of the trust
• The trustee or fiduciary
• The person in control of maintaining the trust’s assets
• The beneficiary or their circle of associates
• Every natural person by whom the trust’s assets are ultimately controlled

Commercial associations - If the relevant individual is unable to be identified on the basis of a shareholding of at least 25% or 10%, the following should be marked as the beneficiary:

• The chairperson of the management board
• The member of the management board who opened the association’s account or represents the association (if there is no chairperson)
• The member of the management board who signed the annual accounts (if the association’s account was opened by an authorised representative)

Non-profit organisations and foundations - The beneficiary is the individual who will obtain the organisation or foundation’s assets when it ceases operating or to whom payments can be made under the articles of association.

If there is no such individual, the following should be marked as the beneficiary:

• The chairperson of the management board
• In their absence, the members of the management board with greater rights of representation

Apartment associations - Designating a beneficiary is largely a formality, since control is shared among the apartment owners.

The following should be marked as the beneficiary:

• A member of the management board or an individual with the right to represent the association (e.g. as authorised or appointed by the management board)
• A natural person who holds at least 25% of the voting rights in the association, e.g. if they control a significant proportion of the votes due to owning a large number of apartments
• A member of the management board of the management company if said company is the management board member and none of the apartment owners holds more than 25% of voting rights

Building associations - These are legal persons whose members own or use common property (e.g. an apartment building or commercial premises) and manage it collectively.

The following should be marked as the beneficiary:

• All natural persons who hold 25% or more of voting rights
• Individuals who control the association indirectly (e.g. via a legal person)
• If such individuals are unable to be identified or if their shareholding is less than 25%, then the members of the management board

Legal persons governed by public law (e.g. public authorities, local governments and public universities) - There is no beneficiary, with the provision of the information being a formality. The following should be marked as the beneficiary:

The following should be marked as the beneficiary:

• The director general of the authority
• The mayor of the city or municipality
• Any other responsible individual with the right of representation

Self-employed persons - The beneficiary is the entrepreneur (a natural person).

Section 20(1)(3) of the MLTFPA obliges the bank to identify the actual beneficiary and to take measures to verify their identity. This includes collecting data on their place of residence, which is not necessarily the one recorded in the Population Register, but rather the place where they mainly or permanently reside. Place of residence is important not only for identifying the nature and purpose of a business relationship, but also for updating the client’s details in subsequent monitoring of the relationship.

In order to prevent money laundering and implement international sanctions, the bank is obliged to understand the risks associated with the individuals in control of a business. For example, we need to pay closer attention to companies whose supervisory boards include members who have links to regions with a high risk of sanctions or money laundering. To do this, we need additional information about those members.

We ask you to provide us with details of their name, their personal ID code, the country in which the ID code was issued (or their date and country of birth), their tax residency, their tax identification number and their country of residence. The bank is unable to obtain this information from the registry.

The Money Laundering and Terrorist Financing Prevention Act (hereinafter referred to as the MLTFPA) obliges banks to know their clients and to apply due diligence measures in order to do so. These include gathering information about clients, their representatives, their fields of activity, their main business partners and transactions and the origins of their assets, as well as understanding the objectives and economic nature of the client’s business relationships and transactions.

The bank is unable to identify a client’s business partners solely on the basis of the client’s account statement, as the client may also use other banks and payment intermediaries or cash to settle with key business partners. As such, we have to ask the client for this information.

Any non-resident looking to establish a business relationship must have a strong link to Estonia. When an account is opened, the links mentioned below are assessed collectively – and bear in mind that meeting a single criterion may not be considered enough to establish a business relationship in all situations.

In the case of a legal entity, a strong link to Estonia means:

• financial activities that are connected to the country (e.g. the company’s permanent place of business or employees are in Estonia);
• its main partners are in Estonia;
• it provides a product or service aimed at the local market (e.g. an Estonian-language online store);
• it has property in Estonia or the company’s operations are related to property; and/or
• another significant and verifiable link which explains why the company needs a bank account in Estonia.

Where individuals are concerned, we count the following as strong links to Estonia:

• a valid employment contract or an employer’s written confirmation of registration of short-term employment in Estonia;
• a certificate from an educational institution confirming that the person is studying in Estonia (which must be valid for at least six months and be no more than one month old);
• existing property in Estonia whose upkeep costs are paid from their bank account or rent from which is paid into their bank account; and/or
• another significant and verifiable link which explains why the company needs a bank account in Estonia.

The following are classified as non-residents:

• Individuals whose permanent place of residence is not in Estonia or who have been issued with a residence permit lasting less than one year
• A company registered abroad or an Estonian company controlled by a person who isn’t a resident of Estonia (i.e. the company is under the ownership of a non-resident beneficial owner or owners to the extent of more than 25% of the company being controlled by one or more non-residents in any manner, or if the majority of the company’s management consists of non-residents)

PEP stands for ‘politically exposed person’ and means an individual who is or has been entrusted with prominent public functions in the last 12 months or who is a member of such a person’s family or a close associate of the person.

We’re obliged to identify PEPs whose public roles warrant heightened attention. PEP status doesn’t mean we won’t open a bank account for them, or that we’ll restrict their services, just that we’re obliged to adopt enhanced due diligence measures in regard to them.

The PEP’s spouse (or person treated as equivalent thereto), children and parents and their spouses (or persons treated as equivalent thereto) qualify as members of the PEP’s family. Close associates include individuals who own a business or any form of legal entity with the PEP or have a close business relationship with them.

A full list of the positions that qualify as PEPs can be found on the Eesti Pangaliit website.

You can update your details quickly and easily in our Internet bank, at any of our branches or by contacting your personal account manager (whose contact details can be found in your online bank).

Banks are obliged to verify the origin of a client’s assets so as to understand how the customer came by the assets or where the funds used in a particular transaction were sourced from.

Clients must provide evidence of the legal origin of assets in order to clarify the financial objective of a related transaction and its links to actual economic activities.

To do this, we ask that you respond to any and all enquiries and attach documents confirming the origin of your assets. These can be bank statements, tax returns, invoices, real estate sales contracts, loan agreements, inheritance documents, etc.

In our price list, we apply a special price for opening an account for clients operating in specific fields of activity, since they’re subject to enhanced due diligence measures.

These fields of activity are as follows:

• Manufacturing, purchase and/or sale of weapons and/or ammunition (excl. hunting and sports clubs and shooting ranges)
• Gambling services
• Currency exchange and pawnshops
• Manufacturing of military vehicles
• Provision of cash transport services
• Crowdfunding platforms and provision of instant loans
• Mining
• Buying and/or wholesaling of precious metals, precious stones and precious-metal products
• Bailiff services
• Credit and financing institutions

Payment service providers are required by law to observe the ‘Know Your Customer’ principle and to implement the due diligence measures arising from the MLTFPA. This means that even if you’ve already provided the same information to the bank, the payment service provider doesn’t have access to it and has to take the necessary actions themselves in accordance with their own processes.

The legality, confidentiality and security of client data are guaranteed in their processing. The collection of such data is limited to the minimum required to fulfil the purpose for which we intend to process the data. Access to the data is granted to employees who have completed the appropriate training and who are authorised to process the data only to the extent necessary for the performance of their duties. Only employees who require access to the data for the fulfilment of their duties are granted such access. The legality of the processing of client data is monitored by the Coop Pank Group’s data protection specialist.

Feel free to review our principles of processing client data.