Enforcement measures imposed on European Merchant Bank UAB
The Board of the Bank of Lithuania imposed a fine and obligations on the specialised bank European Merchant Bank UAB and issued a warning for breaches of the Republic of Lithuania Law on the Prevention of Money Laundering and Terrorist Financing.
After conducting an inspection, the Bank of Lithuania found that European Merchant Bank UAB had failed to ensure an effective internal control system and procedures. They were insufficient to manage the risks of high-risk clients, and the bank did not have in place additional measures for reducing the risk of money laundering and terrorist financing. Customer (CDD) and enhanced due diligence (EDD) measures were insufficient, and European Merchant Bank UAB did not properly monitor business relationships and operations and misinterpreted the nature of the activities of legal entities. The Bank of Lithuania imposed a fine of €65,000 on European Merchant Bank UAB.
The Bank of Lithuania issued a warning for the fact that the systems put in place by the specialised bank for the implementation of international financial sanctions and restrictive measures had shortcomings and had been ineffective for the proper implementation of the requirements.
When imposing enforcement measures, the central bank took into account the fact that European Merchant Bank UAB acknowledged violations and operational shortcomings and took action to prevent them from recurring in the future. The specialised bank must remedy all violations and deficiencies identified by 1 April 2022.
Considering the nature of violations, European Merchant Bank UAB will temporarily (until all violations have been resolved) be subject to certain restrictions regarding the provision of services to existing or new customers (electronic money and payments institutions).
Information on enforcement measures applied by the Bank of Lithuania, complaints concerning the imposed sanctions and the results of their investigations can be found here.