The Police and Border Guard services in Estonia are failing to stop criminals joining the country’s e-Residency programme because of a lack of the IT required to do effective criminal database searches.
A report by Estonia’s National Audit Office said that criminals, including 48 Finnish citizens with criminal records, have become e-residents as part of a government programme.
In 2015, the Estonian government launched an e-Residency scheme to help entrepreneurs set up a European Union (EU) business in the Baltic state. It provides non-Estonian citizens easy access to online government services and low-cost administration to set up an EU-registered company.
The e-Residency scheme gives them the opportunity to become a corporate, open a business bank account, get a payments service that accepts foreign currency payments, launch a website and digitally sign contracts and tax documents, from any location. They can also access Estonian government services for businesses.
But according to the National Audit Office, the Police and Border Guard Board (PBGB) has issued digital IDs to foreigners with valid criminal offences abroad. “[It has] also not revoked the documents of some e-residents who have committed a crime in Estonia during the validity of the digital ID,” it added.
The report said that, according to the PBGB, there are no IT solutions that could make mass inquiries to the Criminal Records Database and identify the foreigners convicted in Estonia. “In administrative proceedings, the PBGB is unable to identify persons convicted in a foreign country if the information has not been entered in international databases,” the report said.
The audit office is calling for an IT system for the PBGB to enable it to efficiently “control procedures for the e-residents to allow making mass inquiries to the necessary registers”.
Separately, the now five-year-old e-Residency scheme is making more money than it is costing.
The National Audit Office said the scheme – which has given e-Residency to 63,000 people from 174 countries – has made €10m more in revenue since its launch in 2015 than its total cost of €15.7m. However, the audit also revealed that 95% of the revenue it received came from just 65 e-residents.
The audit revealed dissatisfaction with the scheme among e-residents, with only one in 10 renewing IDs. The results of the survey held among e-residents showed that they justified the non-renewal with the fact that the e-Residency programme did not meet their expectations. It added that problems opening bank accounts was the difficulty mentioned the most in the survey.