Kallas told the ETV news program “Aktuaalne kaamera” (AK) on Friday evening: “We discussed the need to investigate whether there are major penalties [for terminating the agreement between Freeh and the Estonian state].
“If there are no penalties and additional costs, we will terminate this contract. If there are additional costs in the end, we have to weigh up how high these costs will be compared to the result,” continued Kallas.
Former Education Minister Mailis Reps, who leads the centre’s negotiating team, noted that work was needed to eradicate Estonia’s recently acquired, less welcome image as a potential money laundering broker.
The representatives said: “We are still working hard to improve the image of a money laundering country. We take this very seriously.”
The fall of Danske Bank partially clouded Estonia’s international reputation
Representatives referred to the Danske Bank scandal, which saw the Danish bank’s branch in Tallinn closed in late 2019 after it was revealed that the office was likely to have had the opportunity to raise potentially illegal funds of up to € 230 billion which came mainly from the Russian Federation, to lead the period 2007-2015.
Similar, smaller, but still billion-euro scandals hit the country’s Swedbank and SEB operations.
Outgoing Treasury Secretary Martin Helme (EKRE) hired Louis Freeh, who was FBI director during the Bill Clinton administration, in late June / early July 2020. However, the deal more specifically involved the hiring of Freeh’s law firm Freeh, Sporkin & Sullivan promptly resigned as a partner and didn’t become public knowledge until about a month later. Freeh has been hired to represent Estonia in money laundering hearings related to Danske in New York State in order to reduce any damage and strengthen Estonia’s international image.
Louis Freeh performed in the AK studio last year. Source: Siim Lõvi / ERR
The € 3 million deal immediately became controversial, partly due to the secretive nature in which it was negotiated, but mainly due to allegations Freeh made of Russian money launderers, including those who allegedly channeled funds through Danske Estonia .
Representative: Anti-money laundering rules shouldn’t be too restrictive
Mailis Reps qualified her words on strengthening anti-money laundering (AML) regulations while speaking with the Free Market Reform Party leader by saying it doesn’t have to be too strict.
“It’s important to remember that AML interventions have sometimes become very powerful negative business incentives,” she said.
Talks between Kallas representatives and reform centers are ongoing. While Kallas, who was appointed by President Kersti Kaljulaid to form a new coalition, has almost two weeks left, the pandemic situation means a deal is likely to be hit sooner. This would then have to be voted on in the Riigikogu, and if it were passed, only formalities would remain in the formation of a new coalition of the reform center.
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