The Bank of Lithuania, considering European Banking Authority Guidelines, prepared a Resolution regarding the effective management of ML/TF risks when providing access to financial services.
The main new requirements include:
Risk assessment: FMPs must differentiate the risks associated with categories of clients and individual clients and ensure that they do not unreasonably refuse or terminate business relationships with clients posing higher risks.
Customer due diligence and retention of information: The new requirements stipulate that the FMP must establish policies and procedures to ensure that the measures taken do not result in an unreasonable loss of access to financial services for customers. The decision to withdraw from a business relationship must be well-documented and justified.
Provisions related to the main payment account: FMPs must specify how customer due diligence is carried out when opening a main payment account, considering the impact of a limited-function account on mitigating risk.
Adjustment of the intensity of monitoring measures: The FMP must specify how to adjust the level and intensity of monitoring according to the customer’s risk profile, including establishing behavioural expectations and the ongoing review of the customer’s account.
Targeted and proportionate restriction of access to products or services: Options are identified to restrict access to specific financial products or services for particular customers, considering their circumstances and risks.
Information to customers: FMPs must inform customers of the required information, timelines and consequences related to managing ML/TF risk, including decisions not to start or terminate business relationships, suspend payment transactions, etc.
These new requirements are designed to manage money laundering and terrorist financing risks more effectively while ensuring that financial services are provided to customers in a non-discriminatory manner and without unreasonable restrictions.
Recommendation of ECOVIS ProventusLaw
The adoption of the proposed draft Resolution is expected to clarify the relevant issues concerning the proportionate application of the AML/CFT risk management measures, the adequate provision of information to the customer and the knowledge of payment service users about the measures applied to them, the expected duration of the application of the restrictions, where this is not prohibited by other legislation, as well as the possibility of defending their rights and legitimate interests.
Please submit your comments and suggestions on the draft Resolution to the Bank of Lithuania via TAIS or by e-mail [email protected] by 30 May 2024.
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