Estonia, Financial Services

Th FSA also canceled GFC Good Finance Company's identification code as a payment institution.

The FSA said that GFC Good Finance Company AS has in recent years seriously breached the requirements of the Money Laundering and Terrorist Financing Prevention Act and the Payment Institutions and E-money Institutions Act. There have been wide-ranging problems in the operations of the payment institution in its anti-money laundering activities and its implementation of know-your-client procedures.

At the same time, the own funds held by the payment institution have not been of the legally required minimum size for a long time despite repeated warnings from the FSA. While the FSA has on several occasions imposed a penalty on the payment institution, GFC has not complied with the injunctions of the financial supervisor. 

"A regulated payments market cannot tolerate a payment institution that ignores its important obligations under anti-money laundering law to this extent, showing as it does so contempt or incompetence towards the law, or an outright desire to break the law. GFC Good Finance Company has lost the trust of a financial supervisor that acts in the public interest," said the chairman of the management board of the Estonian FSA, Kilvar Kessler.

"All parties in the financial sector must abide by the applicable legislation and meet even higher standards for due diligence where needed," he said.

The FSA said it has given GFC Good Finance Company AS multiple opportunities to bring its activities into compliance with the law. In October 2017 an on-site inspection by the FSA at GFC Good Finance Company AS identified serious violations and shortcomings in all the areas inspected, and an injunction was issued for these to be rectified. The FSA again found wide-ranging violations of the law in an on-site inspection in summer 2018. In January 2019 the FSA issued a second injunction to the payment institution for violation of the minimum requirements for own funds. The company started to comply with the minimum requirements for own funds and obeyed the second injunction only a year or so after the FSA had first issued a warning about the violation of the requirement to hold the minimum level.

The FSA issued the operating licence as a payment institution to GFC Good Finance Company AS on July 5, 2013. On Oct. 23, 2015 the FSA issued to GFC Good Finance Company AS an additional operating licence for providing services related to issuing payment instruments and receiving payment transactions.

The biggest shareholder of GFC Good Finance Company is its founder Tiiu Jarviste with a holding of 90.4%. In 2017, GFC earned a net profit of 83,208 euros on sales of 130,303 euros, and its asset value at the end of the year was 9.6 mln euros.