Estonia rocked by corruption scandal

The Internal Security Service KAPO on Sept.22, 2015 detained Tallinn Mayor Edgar Savisaar as a suspect for repeatedly accepting bribes.

The Center Party chairman is suspected of repeatedly accepting bribes in 2014 and 2015 in assets and favors for himself as well as for a third party with a total value of several hundred thousand euros.

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Estonia stands out for the high rate of card usage

  • In Estonia, as in Finland, bank cards are used a lot, but there is relatively little card fraud
  • There were five cases of bank card fraud in Estonia for every 1000 residents of the country, with the loss averaging 150 euros per case
  • There is only one quarter as much internet fraud in Estonia as in other European countries, as stricter security requirements are widely applied here
  • It is important to be careful when using ATMs outside Europe

A report released by the European Central Bank shows that bank card fraud in the the Single Euro Payments Area (SEPA) affected 11.3 million transactions worth a total of 1.4 billion euros in 2013, the highest figures for the past five years. The total value of the transactions affected was 8% higher than a year earlier, and the number of cases of fraud was 25% higher. The frauds mainly occurred over the internet, where online trading is used increasingly.

There were five cases of bank card fraud in Estonia for every 1000 residents of the country, with the loss in each case averaging 150 euros. In the SEPA as a whole there were 20 fraud cases per 1000 residents, while the rate was highest in the UK at 68 cases per 1000 residents.

Number of card fraud cases per 1000 people

Cases of bank card fraud using cards issued in Estonia continue to account for a small share of card transactions, and there were 6200 cases in 2013 with a total value of 950,000 euros. During that same year, 287 million card transactions were made, with a total value of 9 billion euros. The total value of card fraud increased by 8%, and the number of cases increased somewhat faster, but this is in line with the higher incidence of card payments, the total value of which rose by around 8%. Fraudulent transactions accounted for 0.013% of total value, which is one third of the SEPA average, and 0.002% of all transactions, which is one tenth of the SEPA average. Card fraud is generally less common in countries like Bulgaria and Croatia where card payments are used less, but Estonia and Finland stand out for having high rates of card usage and low rates of fraud.

Fraud cases as a share of the value and number of transactions

Card fraud in Europe mainly occurs with payments initiated over the internet. Fraud worth 1.4 billion euros was committed using cards issued in Europe, of which 66% or 958 million euros was internet fraud, 20% or 289 million euros was fraud at card payment terminals, and 14% or 202 million euros was fraud involving ATMs. The value of card fraud committed over the internet was one fifth larger in 2013 than in 2012, while the value of fraud at ATMs was 14% lower and fraud at payment terminals was 18% down. Improved security measures have helped combat fraud at ATMs and card terminals, with chip-based technology that is hard to forge becoming more widespread in cards and terminals, and skimming device detectors being used.

Estonia differs from other European countries in its low level of internet-based fraud. Fraudulent online card transactions worth 390,000 euros were made in 2013, which is one quarter of the amount elsewhere in Europe in the SEPA. Frauds at ATMs and payment terminals caused losses of 560,000 euros. Online fraud may have been low because Estonians do little shopping online, and also because of the 3D Secure card payment security procedures used by Estonian banks. These procedures require card holders making payments online to enter additional security data, making it harder for anyone else to use the card fraudulently. It is important to remember when shopping online that purchases are only secure if the online merchant also uses this security procedure.

While there are few fraud cases involving cards issued in Estonia online or at payment terminals, the value of fraud at ATMs as a share of the total value of card transactions is about the same as the SEPA average. Most of this card fraud occurs outside Europe. ATMs in Estonia are secure because of their chip-based technology, and few frauds are committed within the country.

Card fraud cases as a share of the total value of card transactions


Source: Bank of Estonia

Author: Airi Uiboaid, Eesti Pank Payment and Settlement Systems Department

See graphs here

Crime rate shows strong decline

The crime rate in Estonia continues to show a sharp decline which however can be partly attributed to Penal Code changes that stepped into effect at the beginning of the year.

In the first five months of the year a total of 13,252 criminal offenses were registered, 2,879 fewer than the year before, which makes a year-on-year drop of 18 percent. At the same time the number of thefts and frauds fell even more sharply, by 31 percent and 40 percent, respectively. Registered thefts numbered 4,594 and frauds 614, respectively 2,019 and 412 fewer than during the same period last year.

The head of the analysis unit at the Justice Ministry, Jako Salla, explained that the review of the Penal Code affected mainly the number of criminal offenses against property such as theft and fraud primarily because the criminal limit was raised from 64 to 200 euros.

Robberies numbered 157 in the five months, four less than a year earlier. The number of traffic offenses on the other hand soared 21 percent, from 1,298 to 1,570. This too was connected with the amendment of the Penal Code, Salla said.

There was little change in the number of cases of physical abuse, with 2,246 cases registered in January-May 2014 and 2,298 this year.

A marked drop has occurred in manslaughters and murders, of which 20 were registered in the first five months of last year and 15 this year. The statistics include also attempted homicides.

Growth has been recorded in registered cases of serious damage to health (from 27 in 2014 to 39 this year), threats (from 268 to 297) and rapes (from 59 to 77).

A slight increase was observed also in drug-related crimes. Unlawful handling of large quantities of narcotics grew to 453 cases from 395 registered last year and handling of small quantities of drugs increased from 43 to 46.

Source: Baltic News Service via Estonian Review

Drug- induced mortality rates

narkosurmade tihedus Euroopas

Number of prisoners continues declining

In 2014 the number of prisoners held in Estonian penitentiaries continued declining, and at the end of the year the number of prisoners was smaller by more than 100 and offenders on probation by 600 compared to the beginning of the year, it appears from the Justice Ministry’s annual prisons review.

According to the fresh yearbook of the prison service the number of prisoners continues to decline, spokespeople for the Ministry of Justice said. While at the beginning of the year prisoners numbered 3,026 and probationers 6,138, at the end of the year the corresponding figures were 2,921 and 5,525.

During the year no murders or manslaughters were committed in penitentiaries, while eight deaths were registered. One prisoner committed a suicide, six died of a serious illness or a health disorder and a criminal investigation was launched to investigate the death of one prisoner under the Penal Code provisions dealing with negligence resulting in death. One criminal probe was opened on suspicion of sexual crimes.

“The prison system has made a big leap forward compared to the 1990s,” Justice Minister Andres Anvelt said commenting on the results. “Work environment has changed and training as well as motivation of prison guards has improved, and prisoners are dealt with personally. This all adds up to crime inside the prison as well as the number of people returning to prison declining,” he added.

Source: Baltic News Service via Estonian Review

Tax authority has better means to fight shadow economy

Marek Helm, director-general of the Tax Boad, says that, finally, the tax authority has the means to fight shadow economy, writes Postimees.

Helm said that such tools as the employee registry, reporting of transactions in excess of 1,000 euros, new reporting requirements on income and social tax and e-tax board are changes that were implemented in less than a year.

Helm said that many of his colleagues in other countries have expressed their surprise over such speed of implementation.

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Study of politician’s bank account shows close ties to businesses

A study of a bank account owned by convicted former Environment Minister Villu Reiljan and his wife Anne Reiljan shows how important business is in politics in Estonia, writes Äripäev in its investigative journalism report.

Proof of this is Villu Reiljan’s 50th birthday that he celebrated in May 2003. The total amount of money paid to his special-purpose birthday bank account by well-wishers was 220,000 kroons or over 14,000 euros. Cash donations may have amounted to as similar amount.

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