About provision of services by foreign creditors or credit intermediaries in Estonia
On 11 March 2015, the Creditors and Credit Intermediaries Act (CCIA) was proclaimed. It obligates creditors and credit intermediaries to apply to the Estonian Finantsinspektsioon for authorisation and to bring their activities into compliance with the statutory requirements.
Supervision is also exercised over foreign creditors and credit intermediaries and their Estonian branches that grant or intermediate credit to consumers in Estonia in the framework of their economic or professional activities.
The granting of credit means the granting of credit for the purposes of subsections 1 and 2 of § 401 of the Law of Obligations Act, the postponement of a due date, leasing or another financing aid, including the conclusion of credit agreements and the taking of required steps to that end.
Credit intermediation means activities that refer to the possibility of conclusion of a credit agreement by the consumer or that intermediate the granting of credit for a fee, including by assisting the consumer in pre-contractual steps or upon conclusion of a contract as well as other related activities.
The legislation governing creditors and credit intermediaries is, among other things, applicable to the granting or intermediation of mortgage-backed credit, leasing and hire purchase services.
A person who, under the legislation of its home state, is authorised to grant or intermediate credit or to provide advisory services may, on the basis of the authorisation granted by the competent supervision authority of the home state, provide the same service in Estonia by establishing a branch to that end or by providing cross-border services in Estonia, unless otherwise provided for in the CCIA. These rights also extend to a foreign person who intermediates mortgage-backed credit or provides advisory services, provided that they hold authorisation granted in their home state.
To establish a branch or provide cross-border services in Estonia, a foreign creditor or credit intermediary must apply to the Finantsinspektsioon for authorisation. Upon applying for authorisation, a written application and the following information must be submitted to the Estonian Finantsinspektsioon:
- the name and address of the creditor or the credit intermediary;
- information on the members of the management board and supervisory board, which includes each member’s given name and surname, personal identification code or, in the absence thereof, date and place of birth, citizenship, residence, educational background, a complete list of places of employment and positions and, in the case of members of the management board, a description of their area of responsibility and additionally, if the applicant so wishes, documents certifying the trustworthiness of the managers and their compliance with the requirements of the CCIA;
- the information and documents specified in § 31 of the CCIA on shareholders that have a qualifying holding in the creditor or the credit intermediary;
- the scope of the authorisation issued to the creditor or the credit intermediary and information concerning the agency that issued the authorisation;
- in the case of the establishment of a branch, the business name and address thereof;
- in the case of the establishment of a branch, the official certificate of the existence of the company in its country of location (an extract from the commercial register or copy of the registration certificate), a power of attorney certifying the powers of the branch manager or a copy of the decision to appoint the manager, a copy of the articles of association or association agreement of the company authenticated in accordance with the laws of the country of location, provided that the submission of the articles of association or association agreement to the register is mandatory also in the country of location of the entity, and the details of the telecommunications of the company and the branch (telephone and fax numbers, e-mail and website address, etc.);
- the annual reports of the last two financial years, if any;
- a business plan which complies with the requirements provided for in § 13 of the CCIA and sets out all the services to be provided by the creditor or the credit intermediary in Estonia;
- the name, registry code or personal identification code or, in the absence thereof, date and place of birth, and address of the credit agent if the agent exists.
In addition to the aforementioned information, a foreign creditor or credit intermediary must submit to the Estonian Finantsinspektsioon the consent of the financial supervision authority of the home state to the founding of a branch in Estonia or to the provision of services cross-border in Estonia, the confirmation of the financial supervision authority of the home state to the effect that the creditor or the credit intermediary holds valid authorisation in its home state and that it pursues its activities in the correct manner and in accordance with good practice, the information of the financial supervision authority of the home state on the financial situation of the creditor or the credit intermediary, including a description of the consumer protection scheme applied with regard to the clients of the creditor or the credit intermediary in the home state.
A mortgage-backed credit intermediary of an EEA country that wishes to establish a branch or provide cross-border services in Estonia must inform the Finantsinspektsioon thereof via the financial supervision authority of the EEA country. The following information and documents must be submitted to the Estonian Finantsinspektsioon:
- a description of the intended services of the branch or services to be provided cross-border;
- information on the creditors to whom the mortgage credit intermediary is tied and on whether the creditor is fully and unconditionally responsible for the activities of the mortgage credit intermediary.
The required information and documents must be submitted with a translation into Estonian made by a sworn translator or certified by a notary. Upon consent of the Estonian Finantsinspektsioon, the information and documents may be submitted in another language.
We advise you to contact an Estonian law firm that can help you with the application process, where necessary (https://www.advokatuur.ee/eng/law-offices/law-offices).
English translations of the legislation of the Republic of Estonia are available at https://www.riigiteataja.ee/en/.
In matters pertaining to financial supervision, you can seek further information from the following persons: Hannes Oja (Head of Business Conduct Supervision Division, telephone +372 668 0566, e-mail hannes dot oja at fi dot ee) or Merilin Kuusler (head of implementation of the CCIA, telephone +372 668 0532, e-mail merilin dot kuusler at fi dot ee).