On 30 May 2024, the Anti-Money Laundering Board (the Board) of the Financial Crimes Investigation Service (FICIS) issued its 2023 Activity Report, which provides statistics on the implementation of anti-money laundering (AML) measures and highlights of the most important activities in 2023.
It should be noted that the FCIS analysis of the notifications received in 2023 from financial institutions and other obliged entities showed a trend towards the use of increasingly sophisticated schemes by legal and natural persons to evade or mitigate the impact of international sanctions. The circumvention of sanctions through the import and/or export of various goods was frequently observed. The analyses show that payments by Lithuanian legal entities to newly registered foreign companies in third countries are even more intensive. Taken together, the suspicious transaction reports received during 2023 are likely to continue to capture more sophisticated ways of circumventing international financial sanctions and to create a variety of innovative fraud schemes.
The analysis of financial transactions has revealed a number of cases where Lithuanian legal persons whose business is trade and who traded with the Russian Federation and the Republic of Belarus prior to the imposition of sanctions on these countries, have started to set up businesses with new partners in third countries.
To ensure compliance and avoid involvement in such schemes, ECOVIS ProventusLaw offers financial market participants to consider the following recommendations:
1. Enhance AML and Sanctions Screening Procedures:
Implement robust AML and sanctions screening processes to detect and prevent transactions involving sanctioned entities and jurisdictions. Use advanced technology to identify complex and sophisticated evasion schemes.
2. Conduct Thorough Due Diligence:
Perform comprehensive due diligence on all new and existing clients, especially those engaging in trade with high-risk jurisdictions. Ensure that clients are not using third-country intermediaries to bypass sanctions.
3. Monitor Financial Transactions Closely:
Intensify the monitoring of financial transactions to identify unusual or suspicious activity. Pay particular attention to transactions with newly registered foreign companies in third countries, as these may be attempts to circumvent sanctions.
4. Report Suspicious Activities Promptly:
Ensure timely and accurate reporting of suspicious transactions to the relevant authorities. Cooperate fully with regulatory investigations and provide all necessary information to aid in the detection of sanction evasion schemes.
If you need any help relating the sanctions compliance, feel free to contact us.
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