Browsing by master's degree program "Magisterprogrammet i internationell affärsjuridik"

Tämä tutkielma käsittelee rahanpesun ehkäisemistä ja etenkin raportointivelvollisten yritysten ja yksityissektorin roolia siinä. Tutkielma käsittelee rahanpesua yleistasolla, moderneja rahanpesun muotoja, ja vaikutuksia yhteiskunnalle. Tämän lisäksi tutkielma esittelee EU-lainsäädäntöä aiheeseen liittyen erityisesti EU:n neljättä, viidettä ja kuudetta rahanpesudirektiiviä, ja niiden asettamia vaatimuksia. Tutkielma esittelee ja arvioi yritysten AML-compliance prosesseja kuten asiakkaan tunnistamista, riskiarvion tekemistä, tilitapahtumien seurantaa sekä epäilyttävien tapahtumien raportointia. Tämän lisäksi, tutkielma arvioi rahanpesun ehkäisemistä corporate governance – näkökulmasta, sekä arvioi compliance-prosessista syntyviä kuluja sekä riskejä yrityksille, sekä näiden perusteella rahanpesun ehkäisemisen tehokkuutta. Johtavatko nämä varsin tiukat vaatimukset ja korkeat compliance-kulut tehokkaaseen lopputulokseen? This master’s thesis discusses and analyzes the topic of anti-money laundering, and especially the role of obliged entities and private sector. The thesis will introduce the general topic of money laundering, its modern methods, impact to the society and why preventing money laundering is of utmost importance. The thesis will present the relevant EU legislation, from which the obligations for obliged entities spring from, mainly, the fourth, fifth and sixth anti-money laundering directives. In addition to presenting the phases of companies’ compliance processes such as know your customer, risk assessment, transaction monitoring and suspicious activity reporting, the thesis will analyze the issue from a point of view of corporate governance and evaluate the costs and risks for obliged entities, and on the basis of these, the efficiency of the framework and process for prevention of money laundering. Do strict requirements towards obliged entities and their high compliance costs lead to an efficient result in preventing money laundering.

A payment system ensures the movement of assets and is therefore vital within any modern economy. For this reason, it is equally important that that the payment service market is capable of evolving though time in order to match the current needs within the payment service market. With the growing need for technological solutions, the EU payment service market had fallen short of providing efficient payment services and therefore the European Commission chose to adopt the PSD2, which relinquished the natural monopoly traditional Banks had thus far built up within the payment service market and provided room for new competitors to enter the market, namely FinTech companies. The aim of this thesis is therefore to look into the regulation of the payment service market from the side of traditional Banks and FinTech companies, to consider whether the new PSD2 could pose a risk toward the financial stability of the EU, as FinTech companies are not subject to similar regulatory regimes as traditional Banks, particularly in terms of bankruptcy proceedings. Unlike traditional Banks, if FinTech companies were to run out of liquidity, they would become subject to corporate bankruptcy proceedings, which means that they would no longer be able to provide their payment services, resulting in service users possibly losing out on their assets. Based on the findings presented in this thesis it can be said that PSD 2 could affect the financial stability of the EU, particularly since the popularity and reliance of the shadow payment market is continuously growing. Therefore, this thesis also suggests some possible solutions, which could improve the resilience of the payment service market as a whole.

The fast development of technology encourages online platforms to advance in online targeted advertising, which raises concerns for regulation in this field, particularly regarding their transparency and accountability. To address these concerns, in 2022 the European Union introduced a new piece of legislation, the Digital Service Act (the DSA), which focuses on transparency and accountability of online platforms and aims to bridge information asymmetry between intermediaries and service recipients. The current thesis offers a descriptive analysis of the regulatory framework and examines transparency requirements for online platforms in online targeted advertising under Articles 26, 27, and 39 of the DSA, particularly how effectively these provisions contribute to transparency and bridging information asymmetry between service recipients and online platforms. The scope of this research relates to online platforms and how the DSA regulates online targeted advertising. The DSA enables greater access to information for service recipients by requiring disclosure of key parameters, advertisers’ information, inclusion and exclusion criteria used by online platforms based on which online targeted advertising is provided. Furthermore, the DSA prohibits the profiling of special categories of personal data and sets strict rules for very large online platforms (VLOPS) and very large online search engines (VLOSEs), requiring to maintain public repositories for their advertising activities. While the DSA aims to transform the information landscape, it has potential issues regarding information asymmetry between online platforms and service recipients. The findings indicate that the DSA mostly addresses transparency through disclosure requirements understandable for the average service recipient. The potential issues can be observed towards clarity and comprehensibility of the provided information and disclosure information based on the needs of individual service recipients, which overall does not contribute to bridging information asymmetry between online platforms and service recipients. The questions further emerge from the fact that information required is not always easily accessible and interpretable, with possible ambiguity, for example, towards “prominent marking”, “main parameters”, disclosing who presents and pays for ads, revealing the functionality of recommender systems and algorithms utilized in online targeted advertising. Moreover, possible complications can be seen with the accessibility of datasets in public repositories, and constraints of transparency in the operations of VLOSEs in online targeted advertising. The aforementioned issues limit the achievement of the transparency goal outlined in the DSA and create obstacles in bridging information asymmetry between online platforms and service recipients.

This master’s thesis is a study with respect to prospectus regulation in the EU and Australia. This thesis sets out to discover whether a prospectus summary drawn up in accordance with EU standards could be utilised in a secondary listing in Australia. The thesis utilises legal dogmatics as a basis point for the analysis for the regulatory framework in the EU. Methods of comparative law is also utilised to highlight similarities and differences between the pragmatic functionality of the two jurisdictions’ prospectus regulation regimes. The thesis first analyses the current regulatory framework in the EU with respect to prospectuses with a focus on prospectus summaries as well as investigates the policy reasons for recent regulatory reforms. Based on the analysis of the current regulation on prospectus summaries in the EU, the thesis presents an example summary. The thesis then goes on to examine the example summary in the Australian context, analyses whether the example summary may be utilised in Australia, and what are the policy reasons behind any necessary changes. Lastly, the thesis compares the two jurisdictions’ regulatory framework from a policy point of view to analyse what objectives are driving the legislative outcomes. The thesis found that the example summary compiled in accordance with the EU prospectus regulation can be made compatible with the Australian standards with minor additions and adjustments and that overall, the two regulatory frameworks share the objectives of investor protection and market efficiency which are reflected in the regulatory texts.

The present study examines the legality of direct marketing to other Member States of the European Union by holders of an Estonian virtual currency service provider license, regulated by the Estonian Financial Intelligence Unit ("FIU") in accordance with the Act on Prevention of Money Laundering and Terrorist Financing ("MLTFPA"), in order to assess the feasibility of such a practice. In more detail, this study is intended to provide an overview of the Estonian crypto regulations in relation to direct marketing compliance, as well as a description of how the forthcoming regulations of the Estonian Parliament and Council on markets in crypto assets and amending Directive (EU) 2019/1937 may affect direct marketing compliance for crypto license holders in Estonia. Compliance is vital to establish worldwide standards, protecting consumers, preventing fraudulent activity (such as anti-money laundering, anti-terrorism funding), and promoting fair competition among businesses, such as anti-bribery and financial transparency. The selection of Estonia for this study is twofold: firstly, Estonia is one of the most digitized countries in the European Union, and secondly, it's also a leading destination for cryptocurrency businesses as well as one of the top destination countries in Europe for Fintech start-ups. Estonia has taken a leading role in the European Union's crypto licensing arena through its advanced policies towards cryptocurrencies. Estonia's foresight led to the issuance of crypto licenses as early as 2017, a landmark achievement which significantly accelerated the process for companies aiming to acquire an Estonian license. With relatively basic requirements in place for such a permit, businesses can easily operate without any encumbering legal impediments. The ease in obtaining Estonian crypto licenses proved rivaled by no other, creating a catalytic effect on worldwide crypto operations that were previously deterred and impeded by complex, time-consuming legal processes. In this way, Estonia's proactive stance in designing regulatory procedures unlocked doors to new horizons in the industry, vastly affecting large numbers of innovative startups looking to expand their business operability. Therefore, it is evident that a commitment to creating a conducive environment boosted Estonia's reputation as a superior hub for the dynamic domain of crypto, ahead of alternative actors available in different regions around the world. As cryptocurrency use has grown and evolved, so too has the legislation. It is possible to see that by comparing how the 2022 regulation differs significantly from the 2017 version. In 2020, Estonia's crypto regulatory system underwent a significant change when the entity responsible for the regulation of crypto moved from the Ministry of Interior to the Financial Intelligence Unit under the Ministry of Finance. The majority of crypto licenses were now revoked by the Financial Intelligence Unit in 2020. On March 15, 2022, an amendment was made to Estonia's Law on Preventing the Financing of Terrorism to include under the scope of the licensing system virtual currency providers as "obligated entities" in Sections 2(10) ("Application of this Act") and 72 ("Own funds requirements for a virtual currency service provider"). Therefore, making virtual currency providers subject to Estonian Money Laundering Act. An additional amendment to MLTFPA has been approved by the Estonian government on March 15th, 2022, which governs the cryptocurrency services offered by Estonian companies. By complying with these amendments as effectively as possible, the risk of money laundering and terrorist financing can be significantly reduced during cryptocurrency transactions within Estonian companies. As a matter of fact, this topic is of great significance mainly since there are a number of crypto companies that have been developed in Estonia, and there have been discussions about how these companies operate on the market with or without a government license. The aim of this investigation is to analyze the significance of insufficient objective information regarding the validity of Virtual Assets Service Providers' ("VASP") marketing services outside Estonia. The goal is to bring attention to the potential effects of the present situation where virtual currency companies pursue promotional activities in other EU regulated zones while abstaining from directly advertising their VASP offerings. To be precise, this research will explore how consumer protection and regulatory effectiveness have been impacted by such actions, particularly the ones enforced by the Estonian authorities - FIU and MLTFPA regulation. Moreover, there is, at the moment, no harmonized European Union legislation that regulates crypto marketing to so called “grey areas"' – meaning countries where cryptocurrencies are not regulated. In the context of the global trend focused on the active development of the digital economy, the relevance of issues related to the formation of approaches to the legal regulation of the use of the latest financial technologies (FinTech) seems indisputable. However, the European Parliament has taken significant action towards addressing this regulatory gap by approving the Markets in Crypto Assets (MiCA) Regulation in April 2023. This regulation represents a progressive effort to harmonize and standardize the governance of cryptocurrencies across the entire European Union, thereby ushering in a new period of regulatory clarity and transparency in the crypto market. The blockchain technology presents not only new possibilities but also new challenging conditions for traditional approaches to the provision of financial services. The development of cryptocurrencies, modern forms of attracting investments in the form of ICO (Initial Coin Offering) in the actual absence of a legal framework, brings potential risks to both private and public interests, namely: high volatility of the cryptocurrency rate, implication of investors in illegal activities, the unavailability of legal mechanisms to protect investors, jeopardizing global economic stability, etc. In this regard, it is interesting to consider the positions already formed on the legal regulation of the use of FinTech in European countries with the necessary experience in this area, in particular in Estonia, which is a member of the European Union. The positions of financial regulators and established requirements of the European Union and Estonia to ICOs are discussed in detail. Conclusions on the appropriateness of legal regulation of new phenomena, including at the international level, are formulated. Recommendations on the implementation of the Estonian experience in the regulation of ICOs and cryptocurrencies in the European Union system are made. Thus, it seems reasonable to observe the principle of technological neutrality in the formation of the legal framework of regulation of ICO and cryptocurrency, to consider bitcoin trading as a business activity subject to compulsory licensing, etc. The following recommendations are made for the implementation of the Estonian experience in the regulation of ICO and cryptocurrency in the European Union legal system. To sum up, Estonia's crypto regulations have experienced considerable progress since the introduction of licensure in 2017, and changes to the Money Laundering and Terrorist Financing Prevention Act in March 2022 reinforced it further, applying to virtual currency providers. Nevertheless, there still exist apprehensions concerning legality of marketing services supplied by Virtual Assets Service Providers beyond the Estonian land boundaries. The above mentioned regulation, passed by the European Parliament in April 2023, is expected to facilitate standards governing cryptocurrencies across all EU members. Given that direct advertising is a crucial aspect of the crypto industry, compliance with these upcoming regulations will be essential for enterprises operating in this territory, including those licensed in Estonia. It is therefore critical for these license holders to remain aware of regulatory developments and ensure their direct marketing practices comply with both Estonia's and the entire European Union's laws. Direct advertising is integral to the crypto industry as it is a key means of promoting and differentiating products and services, and therefore its regulation is of utmost importance for ensuring transparency and consumer protection, additionally the consequences of noncompliance with above mentioned legislation may lead to brand damage, regulatory fines, civil liability, and criminal charges.