The FIU, an independent government agency under the jurisdiction of the Ministry of Finance, is tasked with preventing money laundering, financial terrorism and the evasion of financial sanctions.

At the end of 2022, the agency asked all trust and company service providers registered in Estonia – 322 companies that help create and manage firms – to provide information about their clients.

Although the questions were answered, several companies challenged the FIU's actions. On Thursday, the Supreme Court ruled it had acted incorrectly.

Tõnis Loorits, sworn attorney at law from Triniti, who represented the companies in court, said the agency should not burden companies unnecessarily.

"Whenever the state approaches you and demands data, the state must first reflect internally on whether the same goal can be achieved without burdening you in this way. That was one of the core issues in the dispute. In other words, the agency requested data from companies to achieve a goal that it could have reached on its own without burdening those companies," he said.

The impact of the Supreme Court's decision means the agency can no longer use its old methods. It's right to request data has been reduced, although it is not yet known to what extent.

This affects Estonia's whole fight against money laundering, said Matis Mäeker, head of the Financial Intelligence Unit.

"We must change our supervision, our approach. We must accept what the Supreme Court has said and adapt our practices accordingly. Even though the societal expectation is that supervision must be effective and must prevent money laundering scandals, we do not have the tools to do that to the same extent. What that extent is, we will analyze in the coming weeks," he said.

The FIU now wants the law to be amended so that the agency is granted legal authority to continue requesting data from companies as it has done so far.

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