FAQ

Question
Prevention of money laundering and terrorist financing
	Customer identification
	Is it mandatory to obtain from the customer the documents, data or other information necessary to identify the customer? Can data obtained from databases or service providers be used?
	What are the requirements for determining the purpose and intended nature of the customer’s business relationship? Are there cases where the customer is not required to provide this information?
	Should the documents of a legal entity and copies of registration documents collected remotely be notarised or certified by an Apostille? Is an e-signature sufficient to validate these documents?
	Are financial institutions obliged to obtain a copy of the customer’s identification document when the customer is identified in accordance with Article 11(1)(3) of the Republic of Lithuania Law on the Prevention of Money Laundering and Terrorist Financing?
	How should financial institutions, when identifying a customer as defined in Article 11(1)(3) of the Republic of Lithuania Law on the Prevention of Money Laundering and Terrorist Financing, make sure that a proper identity document was used at the time of the issue of the qualified electronic signature?
	How should financial institutions verify a customer’s citizenship when using their driving licence for identification purposes? Is a driving licence issued in the United Kingdom, which is no longer part of the European Economic Area (EEA), a valid document for a customer’s identification?
	How can a financial market participant authenticate a customer in the physical presence of the customer if, at the beginning of the business relationship, the customer’s identity was established and verified upon receipt of their passport or identity card?
	Is it obligatory to check against public, reliable and independent sources for negative information that can impact the customer’s, its representative’s and beneficiary’s reputation (e.g. if a pre-trial investigation into the customer’s financial crimes is initiated, etc.) during customer identification and verification?
	Do paper versions of documents (e.g. copies of passports, shareholder registers and company’s articles of association, etc.) collected during customer identification have to be stored? Is it sufficient to store only electronic versions of the documents in the customer’s file, according to internal control procedures determined by the financial institution?
	Beneficial owner identification
	Who should be considered the beneficial owner of various legal persons (e.g. in cases of unions or associations of multi-family apartment house owners or in case of a legal person undergoing bankruptcy procedures)?
	How should a market participant identify a beneficiary, if a legal person’s ownership structure includes company the securities of which are traded on a regulated market in the Member States of the European Union or other foreign countries and which is subject to disclosure requirements compliant with European Union legislation?
	How should a market participant identify a beneficiary, if the legal person’s ownership structure includes companies registered outside of the Republic of Lithuania?
	How to identify a beneficiary?
	What criteria should be used for selecting reliable and independent sources for the verification of information on customers and beneficial owners? Can you list examples of such sources?
	International financial sanctions
	Is the financial institution obligated to screen a customer, the other party to an operation (transaction) and the banks or financial institutions involved in an operation (transaction) with respect to the applicable international sanctions where the operation (transaction) is carried out in Lithuania, the European Union and/or the SEPA zone?
	Are international sanctions applicable to payments for basic goods and services (e.g. foodstuffs, utilities, medical services, etc.)?
	What is the amount from which operations or transactions carried out by financial institutions should be screened for the application of international sanctions? Are grounds for customer identification set forth in Article 9(1) of the Republic of Lithuania Law on the Prevention of Money Laundering and Terrorist Financing applicable in this case?
	Should a financial institution make a payment to an entity which is subject to European Union sanctions under a contract, agreement or obligations that were concluded or arose before the date of the enforcement of sanctions on the entity?
	Monitoring of business relationships
	When entering into a business relationship, is the customer always required to fill in a Know Your Customer (KYC) questionnaire? How detailed the questionnaire must be?
	Other
	What are the requirements for transferring (migrating) customers from a financial institution licensed outside Lithuania to a financial institution licensed in Lithuania?
	Can financial institutions wanting to install new technological solution to manage money laundering and terrorist financing (ML/TF) risks request the Bank of Lithuania (LB) to judge its acceptability and compliance with the requirements of the Law on the Prevention of Money Laundering and Terrorist Financing (hereinafter ‘the Law’) (in customer identification and verification, monitoring of financial operations and other stages)? If yes, can you briefly outline the procedure? If no, can you tell what other ways there are for the supervised entities to assess the applied technological solution’s compliance of with the Law and LB recommendations?
	While performing Ongoing Due Diligence on customer and beneficial owner, can financial market participant use data available in reliable external sources as the primary source? For example, data on the type of activity, management structure, manager (managers), beneficial owner, etc.
	What is the difference between the simplified customer due diligence case laid down in Article 9(4) of the Law on Money Laundering and Terrorist Financing (hereinafter – Law) and the case in Article 15(1)(7) of the Law?
	How frequently does information about the customer and the beneficial owner need to be updated?

Customer identification

Is it mandatory to obtain from the customer the documents, data or other information necessary to identify the customer? Can data obtained from databases or service providers be used?

What are the requirements for determining the purpose and intended nature of the customer’s business relationship? Are there cases where the customer is not required to provide this information?

Should the documents of a legal entity and copies of registration documents collected remotely be notarised or certified by an Apostille? Is an e-signature sufficient to validate these documents?

Are financial institutions obliged to obtain a copy of the customer’s identification document when the customer is identified in accordance with Article 11(1)(3) of the Republic of Lithuania Law on the Prevention of Money Laundering and Terrorist Financing?

How should financial institutions, when identifying a customer as defined in Article 11(1)(3) of the Republic of Lithuania Law on the Prevention of Money Laundering and Terrorist Financing, make sure that a proper identity document was used at the time of the issue of the qualified electronic signature?

How should financial institutions verify a customer’s citizenship when using their driving licence for identification purposes? Is a driving licence issued in the United Kingdom, which is no longer part of the European Economic Area (EEA), a valid document for a customer’s identification?

How can a financial market participant authenticate a customer in the physical presence of the customer if, at the beginning of the business relationship, the customer’s identity was established and verified upon receipt of their passport or identity card?

Is it obligatory to check against public, reliable and independent sources for negative information that can impact the customer’s, its representative’s and beneficiary’s reputation (e.g. if a pre-trial investigation into the customer’s financial crimes is initiated, etc.) during customer identification and verification?

Do paper versions of documents (e.g. copies of passports, shareholder registers and company’s articles of association, etc.) collected during customer identification have to be stored? Is it sufficient to store only electronic versions of the documents in the customer’s file, according to internal control procedures determined by the financial institution?

Beneficial owner identification

Who should be considered the beneficial owner of various legal persons (e.g. in cases of unions or associations of multi-family apartment house owners or in case of a legal person undergoing bankruptcy procedures)?

How should a market participant identify a beneficiary, if a legal person’s ownership structure includes company the securities of which are traded on a regulated market in the Member States of the European Union or other foreign countries and which is subject to disclosure requirements compliant with European Union legislation?

How should a market participant identify a beneficiary, if the legal person’s ownership structure includes companies registered outside of the Republic of Lithuania?

How to identify a beneficiary?

What criteria should be used for selecting reliable and independent sources for the verification of information on customers and beneficial owners? Can you list examples of such sources?

International financial sanctions

Is the financial institution obligated to screen a customer, the other party to an operation (transaction) and the banks or financial institutions involved in an operation (transaction) with respect to the applicable international sanctions where the operation (transaction) is carried out in Lithuania, the European Union and/or the SEPA zone?

Are international sanctions applicable to payments for basic goods and services (e.g. foodstuffs, utilities, medical services, etc.)?

What is the amount from which operations or transactions carried out by financial institutions should be screened for the application of international sanctions? Are grounds for customer identification set forth in Article 9(1) of the Republic of Lithuania Law on the Prevention of Money Laundering and Terrorist Financing applicable in this case?

Should a financial institution make a payment to an entity which is subject to European Union sanctions under a contract, agreement or obligations that were concluded or arose before the date of the enforcement of sanctions on the entity?

Monitoring of business relationships

When entering into a business relationship, is the customer always required to fill in a Know Your Customer (KYC) questionnaire? How detailed the questionnaire must be?

Other

What are the requirements for transferring (migrating) customers from a financial institution licensed outside Lithuania to a financial institution licensed in Lithuania?

Can financial institutions wanting to install new technological solution to manage money laundering and terrorist financing (ML/TF) risks request the Bank of Lithuania (LB) to judge its acceptability and compliance with the requirements of the Law on the Prevention of Money Laundering and Terrorist Financing (hereinafter ‘the Law’) (in customer identification and verification, monitoring of financial operations and other stages)? If yes, can you briefly outline the procedure? If no, can you tell what other ways there are for the supervised entities to assess the applied technological solution’s compliance of with the Law and LB recommendations?

While performing Ongoing Due Diligence on customer and beneficial owner, can financial market participant use data available in reliable external sources as the primary source? For example, data on the type of activity, management structure, manager (managers), beneficial owner, etc.

What is the difference between the simplified customer due diligence case laid down in Article 9(4) of the Law on Money Laundering and Terrorist Financing (hereinafter – Law) and the case in Article 15(1)(7) of the Law?

How frequently does information about the customer and the beneficial owner need to be updated?

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