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International Internet Magazine. Baltic States news & analytics Saturday, 08.08.2020, 09:42

Estonia to pay US law firm EUR 3 mln for advice on investigations into past AML cases

BC, Tallinn, 03.07.2020.Print version
Estonian Minister of Finance Martin Helme has signed an agreement with the US law firm Freeh Sporkin & Sullivan for legal advice and representation in the United States in connection with international investigations into past anti-money laundering (AML) breaches, the cost of the contract is 3 mln euros, informed LETA/BNS.

The law firm will be a partner for the Estonian government in the investigations into past AML cases initiated in the United States. 


"The reputation of Estonia has been significantly harmed in several past cases of breaches of AML rules. The activities of subsidiaries or branches of banks in Estonia are being investigated in several jurisdictions, including the United States," Helme said.


"It is very important for Estonia that these difficult cases receive a thorough examination and that we learn as much as possible about what really happened in the past. Therefore, the government of Estonia wishes to play an active part in this process. This will entail cooperation with the law enforcement authorities of the United States. Estonia needs to be compensated for the harm it has suffered. In case of financial penalties against the offending parties, we are interested in forfeiture sharing, as Estonia is clearly a victim of these offences. I am glad that we have a strong and experienced partner in the United States to represent our interests," the minister added.


"In the future, myself and my team will be in close contact with the US ambassador and embassy in Tallinn, we have already met with a representative of the Federal Bureau of Investigation (FBI) in Estonia and discussed our powers," Louis J. Freeh, senior managing partner of Freeh Sporkin & Sullivan, said, adding the FBI is the main US investigative body dealing with money laundering cases allegedly committed in Estonia.


"I will first of all provide legal advice and representation to the government of Estonia in connection with the now well-known and suspected money-laundering activities by various Nordic banks, acting through their Estonian and other Baltic branch networks, whereby billions of US dollars were transferred and routed, in violation of local or international law and Estonian regulatory authority," Freeh said.


"The ultimate goal here is critical and simple, to ensure the financial institutions are held accountable for their actions, thereby enabling Estonia to be fully compensated for the immense financial damages and reputational harm which it has suffered. One of the goals of our work is to align Estonia closely with the various US law enforcement and regulatory agencies, and to provide investigative assistance in furtherance of their actions. By performing this role, Estonia will seek to share in any monetary proceeds which the US authorities obtain from the offending financial institutions as a result of settlements, fines, forfeitures or disgorgement," he added.


He said that in addition to supporting financial investigations into alleged money laundering, he will assist and represent the Estonian government in relations with the US banking authorities, the Department of Justice and Treasury, the Securities and Exchange Commission (SEC), the New York State Department of Financial Services and other law enforcement and supervisory authorities in Sweden, Denmark, Germany and other countries.


"I will perform these tasks in close cooperation with the Estonian Ministry of Finance, the Financial Supervision Authority, the Ministry of Justice, the Office of the Prosecutor General, the Police and Border Guard Board, the Financial Intelligence Unit and other Estonian agencies dealing with money laundering cases or mutual legal assistance proceedings," he added.


The plan is to study and develop all possible legal theories or action plans that may provide a basis for the Estonian government to file lawsuits against offending financial institutions in the United States or other foreign countries.


"In cooperation with the Estonian government and relevant institutions, we will conduct a damage assessment to determine the extent of the financial and other damage caused by the offending financial institutions to Estonia and the reputation of local banking," Freeh said.


Freeh said that at present, it is difficult to assess the duration of the work, as it depends on the success of investigations, international cooperation between supervisory and law enforcement agencies and other factors such as requests for international legal assistance and the ongoing COVID-19 pandemic.


Freeh Sporkin & Sullivan has profound experience in cases involving international, crime, corruption and fraud. The team advising Estonia is led by Louis J. Freeh, who served as the United States District Court Judge for the Southern District of New York from 1991 to 1993 and as the director of the Federal Bureau of Investigations from 1993 to 2001. 


The team advising Estonia includes the Freeh Sporkin & Sullivan partner Ronald Noble, who has served for two terms as the Interpol secretary general and as the undersecretary of the US Treasury for Enforcement as well as Walter Donaldson, formerly the chief fraud investigator for the Bank of America, Terry Burke, former senior officer of the UK Met Financial Crimes Unit and chief of security for the Bank of England, and Michael Welch, a former FBI assistant director and chief investigator for the UK Financial Conduct Authority.


On June 8, the Ministry of Finance forwarded a proposal for bids to Cleary Gottlieb Steen & Hamilton LLP, White & Case LLP, and Freeh Sporkin & Sullivan LLP. The law firm Freeh Sporkin & Sullivan LLP was selected in the tender procedure.






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