AML Draft Law Seeks Widespread Use of Electronic Signatures for Customer Identification

Earlier this month, amendments to the Republic of Lithuania Law on the Prevention of Money Laundering and Terrorist Financing (AML Law) have been drafted (Draft Law). The Draft Law aims to implement Directive (EU) 2019/1153 of the European Parliament and of the Council which seek to improve the access of law enforcement authorities to financial information.

According to the Draft Law, upon receipt of a duly justified request from a competent state institution to provide available financial information or financial analysis information necessary for the prevention, detection, investigation, or prosecution of a serious criminal offense, the Financial Crime Investigation Service (FNTT) shall provide it within 10 working days. In addition, upon receipt of a duly justified request from Europol to provide available financial information or financial analysis necessary for the performance of Europol’s functions and tasks, FNTT shall provide it without delay and at the latest within 10 working days.

Furthermore, the Draft Law implements changes in the use of electronic signature when identifying customers. According to the changes, Part 2 (1) of Article 11 of the AML Law will no longer be applicable for identifying customers via qualified electronic signature. Therefore, institutions may identify customers by a qualified electronic signature that complies with the requirements of the Regulation (EU) No 910/2014 of the European Parliament and of the Council, regardless of the manner in which the customer was previously identified.

The Draft Law also specifies requirements for simplified customer due diligence for state and municipal institutions and establishments. Simplified customer due diligence may not be carried out in the presence of the conditions specified in Article 14 of the AML Law, where enhanced customer due diligence must be carried out (one of which is the customer being a politically exposed person).  However, according to the Draft Law, simplified customer due diligence may be applied to customers which are state and municipal institutions or establishments and the Bank of Lithuania, despite the fact that their managers could be considered politically exposed persons.

The Draft Law comes into force on August 1^st.

Prepared by legal assistant Vilius Neverdauskas