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Dear clients and cooperation partners,
On 29 June 2017 the Lithuanian Parliament adopted amendments to the Law on Prevention of Money Laundering and Terrorist Financing (the Amended Law). The Amended Law still awaits approval by the Lithuanian President. Most of its provisions should come into force the day after official publication.
The Amended Law implements Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC (the 4th Anti-Money Laundering Directive).
The main areas of the Amended Law that introduce changes include the following:
- The Amended Law broadens the list of companies and individuals required to implement anti-money laundering and counter-terrorist financing measures. After entering into force the Amended Law will apply, among others, to real estate agents (brokers).
- Enhanced customer due diligence requirements are mandatorily extended to local politically exposed persons (PEPs).
- All companies established in Lithuania will have to obtain, renew and hold accurate information on their beneficial owners. This requirement will come into force on 1 January 2019. Information on beneficial owners will have to be provided before 1 July 2019 and will be stored in the Information System of the Participants of Legal Persons.
- Electronic money and payment institutions established in another Member State that provide services in Lithuania through agents (legal or natural persons) will have to appoint or establish a primary contact person in Lithuania who will be responsible for cooperation with the Financial Crime Investigation Service.
- A significant increase in fines for violations of the Amended Law, i.e. financial institutions may be fined up to 5% of their annual income and up to EUR 5,100,000 in the case of repeated violations. The fine applicable to other affected entities (as defined in the Amended Law) can be up to 5% of their annual income in relation to their business activities and up to EUR 1,100,000 or double the amount of benefit received from breach of the Amended Law for repeated violations.
The Amended Law also introduces several changes to, eg, enhanced and simplified customer due diligence procedures and documentation/information retention requirements. Sorainen was actively involved in commenting on the draft Amended Law and providing suggestions aimed to create well-balanced regulation meeting our clients’ needs. |
