A study conducted by the Financial Intelligence Units (FIU) of Estonia, Latvia and Lithuania has found that travel restrictions associated with both the Covid pandemic and the start of the full-scale invasion by Russia of Ukraine have significantly reduced the inflow of cash, including of the ill-gotten variety, from Russia and into all three Baltic states.
At the same time, there has still been a significant flow of cash from all three Baltic countries across the EU’s external borders, for instance in the case of Estonia, to the UK, while in Lithuania, cash volumes have also been affected by the rapid growth of the fintech sector.
The strategic study on legal and illegal cash flows in the Baltic States is the first collaborative project between the three Baltic States’ FIUs on illicit cash-flow risks and demonstrates that these risks have evolved during the period 2019 to 2022, though even as digital payments are on the rise, cash continues to play an important role in money laundering and other financial crimes, due to the anonymity it can offer.
Toomas Plaado, deputy head of the Estonian FIU, says the international survey’s findings tally with those of his own authority, and has spoken in favor of such cooperation going forward, noting a trend for Estonian individuals and legal entities using Lithuanian payment intermediary accounts in respect of cash transactions, likely in order to hide income.
Trends in the cash movement indicate that the Baltic States are primarily being used for cash transit, including of a nefarious kind, while raising awareness and harmonizing legislation – so as to avoid any “weakest link” nations arising – along with follow-up studies and cooperation and exchange of data between FIUs, investigating authorities and other partner bodies, play a key role, it is argued. (ERR/Business World Magazine)
