Article 9(1)(1)–(8) of the Republic of Lithuania Law on Prevention of Money Laundering and Terrorist Financing (hereinafter – the Law) refers to the cases in which obligated entities are required to apply means of identification for the customer and the beneficiary. Considering that upon the request of the PIS user (hereinafter – the customer), the PIS provider only initiates a payment order from a customer’s payment account opened with another payment service provider (Article 2(22) of the Republic of Lithuania Law on Payments), and such a payment order is carried out by a payment service provider other than the PIS provider, as well as the fact that the amount of the payment transaction indicated in the initiated payment order is not received by the PIS provider from the customer or from the payment service provider executing the payment order, according to the Bank of Lithuania’s assessment, in terms of prevention of money laundering and terrorist financing (hereinafter – ML/TF)payment initiation service is considered as the conclusion of a transaction rather than the execution of a monetary operation initiated by the customer, therefore the obligation to identify the customer arises when at least one of the grounds referred to in Article 9(1)(1), (2), (7) and (8) of the Law exists.
It should be noted that the specific cases where a PIS provider has to apply customer and beneficiary identification measures will depend on the business model chosen by the specific PIS provider and other material circumstances to be taken into account by the PIS provider. It is important for PIS providers to properly assess whether a client is granted a one-off PIS (one-off agreement is concluded) or whether a business relationship is established with the client, which is intended to continue for a certain period of time at the time of the establishment of the business relationship (continuous agreement for multiple PIS delivery).
Where the PIS is provided as a one-off service, the provision of such a service in the context of the Law would be treated as a one-off transaction. In the above case, where the business relationship with the customer is not established and/or there are no other grounds (i.e. those established in Article 9(1)(7) and (8) of the Law), it is considered that the obligation for the PIS provider to identify and verify the identity of the customer and the beneficiary arises when the amount of one-off or several interrelated transactions entered into by the customer is equal to or greater than €15,000 or the corresponding amount in foreign currency. If the PIS provider and customer enter into a business relationship and/or there are other grounds, as set out in Article 9(1)(7) and (8) of the Law, then the identification of the customer of the PIS provider shall be performed irrespective of the size/value of the transaction in question, but on other grounds (Article 9(1)(1), (7) or (8) of the Law).
In addition, it should be noted that in cases where the PIS provider has an obligation to identify a customer as defined above and the PIS provider determines that the ML/TF risk is low, the PIS provider shall be entitled to benefit from the simplified customer and beneficiary identification exception provided for in Article 15(1)(9) of the Law and to a apply simplified customer identification measures.
It is also important to note that the PIS provider must have appropriate internal control procedures and tools that allow it to identify in a timely manner when the risk of ML/TF is no longer low, to identify the beginning of the business relationship with the customer, to identify linked customer transactions, to carry out effective monitoring of the customer’s business relationships and transactions, and to take other measures specified by the Law.