In order to be near you and provide highest quality services, we try to ensure that in the performance of day-to-day activities the requirements of the statutes of law and one of the main principles of banking - Know Your Client (or KYC) would be followed. In our activity, we must ensure that persons, who are a threat to others, would not use our bank’s infrastructure, which is why, we must ensure that the transparency of the origins of the client’s assets and funds and validity of monetary operations would conform to the activity indicated by the client.
Money laundering prevention
PREVENTION OF MONEY LAUNDERING AND TERRORIST FINANCING
1. Why does the bank ask?
2. What is money laundering and terrorism financing?
Money laundering are actions, by which it is intended to conceal or legitimize funds or other economic resources acquired through criminal activity.
Terrorist financing is any form of financial aid provided for the performance of terrorist activities or aid provided to persons, who incite, plan or direct terrorist activities.
3. In what cases the bank requests to submit additional information regarding the payment operations being performed and what does it mean?
Request to provide additional information is ordinary and may be applied to any client. Request is made while monitoring payment operations, when it is assessed whether operations being performed are typical for the client. If non-conformities are identified, we request the client to correct the information and submit additional documents. Which is why, it is very important to update the client’s account on time, provide relevant and correct information, which will help us to properly implement the “Know Your Customer” principle and prevent money laundering, terrorist financing, infringement of sanctions and protect our clients from swindling.
We alert your attention that the request to submit additional information or documents does not mean that the client is a suspect. This is an ordinary procedure applied by all financial institutions, by following the Law on the Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania and other statutes of law.
4. Why it is important to indicate correct and precise payment purpose in the payment purpose field?
Payment purpose field is necessary not only for the recipient, but also to explain to the bank the real purpose of the payment operation. Thus, we incite and ask the clients to provide precise information and avoid ambiguities in the payment purpose field. This will help avoid additional requests to correct the information and ensure more expedient payment execution.
5. What can happen, if you refuse to submit or do not submit the requested information on time?
If the bank does not receive all of the requested information necessary to implement the requirements of the statutes of law, it may be forced to limit the provision of financial services or, in extreme cases, even terminate business relationships.
6. How does the bank ensure the safety of the data, which I provide?
Strict safety and confidentiality rules are applied for all data and documents submitted by the client.
The bank discloses clients’ data to third parties only after receiving a written consent of the client or when the statutes of law demand the disclosure of them (example, to the police or customs office).
7. What kind of personal data the bank collects?
Before processing the client’s personal data, the bank assesses the raised goals, for which the processing of personal data is necessary. The requirements of international and national statutes of law regulating the implementation of the “Know Your Client” principle obligate us to process personal data of the client. Personal data being collected by the bank depends on what kind of services the client is using. The bank may collect such data: copy of identity document, tax payer’s code, citizenship, information regarding risk category the client is attributed to in accordance to product, services and/or operation risk, political views. In its day-to-day activity, the bank strives to ensure the processing of minimum quantity of personal data. It is useful to know that every client has the right to know for what purpose or based on what legal grounds personal data is collected, for how long personal data is retained, what kind of rights the client has etc.
8. How can I familiarize with information about my personal data processing?
You, as any other bank client, have the right to receive confirmation from the bank (data controller) whether the bank (data controller) is processing your personal data. If the bank is processing such data, you have the right to familiarize with them (receive a copy of them).
The bank (data controller) within one month from the receipt of the request must answer the request regarding the implementation of the right to familiarize with personal data. In certain circumstances (e.g., large scope of data etc.), the period may be extended for another two months. If the data controller decides to extend the period, then within one month from the day of receiving the request, the bank must inform you about the period to be extended and indicate the reasons for extension. Bank contact information in order to familiarize with your personal data being processed: ‘Šiaulių bankas’, AB, 149 Tilžės Str., LT-76348, Šiauliai, E-Mail: [email protected], phone: 1813 (+370 37 301 337, when calling from abroad) or Data Protection Officer’s E-Mail: [email protected].
POLICY FOR ADHERING TO INTERNATIONAL SANCTIONS
1. What are international sanctions?
International sanctions are non-military type limiting measures, through which it is intended to ensure international peace, security and respect for human rights. These measures may have a wide spectrum, for example, limitations imposed on legal entity, natural person, state, territory, other subject, certain goods or services. Sanctions can be imposed by supranational organizations (for example, United Nations or European Union) or separate countries (e.g., United States of America) determine them.
2. Types of sanctions being implemented by the bank
Types of sanctions (in accordance to the scope of limitations), which the bank implements:
- Individual sanctions. They are applied against subjects incorporated in to sanctions lists (for example, natural persons, legal entities, groups, organizations etc.), by limiting their access to funds and/or economic resources.
- Sectoral sanctions. Type of economic sanctions encompassing a certain economic activity sector and prohibiting certain types of transactions. The bank does not provide financial services, for which limitations are imposed (e.g., loan, credit or financial measurement transactions), and does not participate in transactions associated with the prohibited activity (e.g., limitations of supply, export, re-export of certain goods, services or technologies).
- Comprehensive sanctions. They are applied against defined countries or regions and all natural persons and legal entities present there. Currently, such sanctions are applied against North Korea.
- Arms embargoes/restrictions on dual-use goods and / or technologies. Same or similar restrictions may be applied against other goods as well. The bank does not participate in granting of financial aid associated with the aforementioned goods or services.
It is important to note that some types of sanctions are also applies against legal persons, that are not listed on sanctions list, however are owned or controlled (whether individually or in aggregate), directly or indirectly, by a sanctioned person. Sanctions are also applied against those subjects, who act on behalf of sanctioned persons listed under relevant sanctions law or regulation.
3. International sanctions being implemented by the bank
The bank adheres to and implements the sanctions applied by the following international bodies or countries (including, authorities acting on behalf of them):
- United Nations (UN);
- European Union (EU);
- United States of America (USA);
- Republic of Lithuania (the list announced by national competent institution).
4. Limitations on payment operations
Due to the current sanctions regime, correspondent banks and (or) internal policy, Bank has stopped processing of payments to and from Russia and Belarus. The bank also does not execute any transaction, which have direct geographical relation linked to Russia or Belarus (for example, the final point of the delivery of the goods or the initial point of forwarding of the goods is the geographical territory of Russia and/or Belarus) or in which the subject, whose country of registration is Russia and/or Belarus, participates (for example, as the customer/supplier of goods or services). We do not service such payments in any currency.
5. Countries and territories, against which limitations on payment operations may be applied
Due to the current sanctions regime, correspondent banks and (or) internal policy, the bank may apply certain restrictions on transactions (for example, refuse to execute the operation after assessing it), if the below-listed countries or territories participate in the payment operation:
Afghanistan, Armenia, Azerbaijan, Bosnia and Herzegovina, Central Republic of Africa, Moldova, Democratic Republic of Kongo, Kazakhstan, Kuwait, Egypt, Ethiopia, Iraq, Israel, Kirghizia, Lebanon, Libya, Mali, Myanmar (Burma), Moldova, Mongolia, Nicaragua, Ukraine, Georgia, Serbia, Somali, United Arab Emirates, South Sudan, Zimbabwe, Yemen, China, Turkmenistan, Tadzhikistan, Pakistan, Turkey, Uzbekistan, territory or region of Ukraine, which is not controlled by lawfully elected and acknowledged by international community government of Ukraine.
Please note that the above mentioned list is not exhaustive, that is so because international sanctions are dynamic nature and may be amended or canceled. Furthermore, as mentioned, when assessing the transaction, bank may apply its internal policy.
When applying certain restrictions on the provisions of services, in all cases, the bank submits a reason (through separate information announcement) for this indicating contractual and statutory regulation. Informing is conducted within such a scope, which does not contradict the imperative norms of the statutes of law.
6. Why does the bank give questions regarding strategic goods?
Strategic goods are dual use goods and/or military equipment (including services associated with these goods).
Separate sanction programs additionally envisage a prohibitions, directly or indirectly, to sale, supply, transfer or export dual-use goods, other technologies and (or) military equipment to certain indicated subjects or regions, regions or countries. Usually, this prohibition encompasses the granting of financing or financial assistance associated with the indicated goods or technologies to certain indicated subjects or certain regions, territories or countries. Even though the main accountability for the implementation of this requirement falls on to the clients executing transactions associated with this type of goods, the prohibition to provide financial assistance is directly imposed on the bank.
7. Why the execution of the payment operation may take too long?
We may ask to submit additional information (including documents), if there are signs that the transaction has certain elements, which pose a risk associated with the sanctions. Because of this, the execution of the transaction may take a couple of weeks and, if the investigation lasts longer for objective reasons, the bank always additionally contacts the client and informs them about the status and periods. Often, the speed of inspection depends on the reaction time of the client.
In order for the execution of payments to go smoothly, we recommend:
- Upon the request of the bank, you must be ready to submit additional documents affirming the payment operation (including, information about the beneficiaries of the business partner and/or the client);
- When executing the payments, to indicate thorough and precise information in the payment field. For example, when executing the payments in accordance to invoice, you must indicate not only its number, but also the ultimate recipient of goods, type of goods, jurisdictions and other important information;
- To check and ascertain that the business partner and/or client or their beneficiaries are not included in to the sanctions lists. We recommend to check the conformity of the business partner and/or client to the sanctions list not only when entering into new business relationships, but also regularly repeat this inspection in the event of long-term business relationship;
- To assess the business relationship and geographical risk of business partners, and implement the “Know Your Client” principle.
8. Who is included in to the sanctions lists?
Official sources, wherein you may conduct the search of sanctioned subjects:
- United Nations’ sanctions: https://scsanctions.un.org/search/
- European Union’s sanctions: https://www.sanctionsmap.eu/#/main?search=%7B%22value%22:%22%22,%22searchType%22:%7B%7D%7D
- USA Treasury Department Overseas Funds Control Bureau sanctions: https://sanctionssearch.ofac.treas.gov/
- List announced by the Financial Crimes Investigation Service under the Ministry of Interior: https://www.fntt.lt/lt/tarptautines-finansines-sankcijos/4166
It is important to note, that in certain cases such persons, who are being directly or indirectly controlled by the subject not incorporated in to the sanctions lists, are deemed sanctioned persons. Additionally, the person acting on behalf of the sanctioned subject is deemed to be a sanctioned subject.
9. What kind of legal consultations regarding sanctions “Šiaulių bankas” may provide to its clients?
From a legal perspective, bank can only provide information on what its sanctions policies are and how they may apply to a transaction you would like to process using banks platform. Bank does not offer its customers general legal advice on how sanctions laws apply to them or their activities. If you have such questions, you should direct them to the state authorities.
10. Where can you find useful information about the sanctions?
You will find more information about the sanctions and execution of them in these sources:
- Ministry of Foreign Affairs – https://urm.lt/default/lt/uzsienio-politika/uzsienio-politikos-prioritetai/lietuvos-saugumo-politika/sankcijos
- Bank of Lithuania – https://www.lb.lt/lt/tarptautines-sankcijos
- Financial Crimes Investigation Service – https://www.fntt.lt/lt/tarptautines-finansines-sankcijos/4166
11. Regarding export verification procedures for regulated goods
Šiaulių bankas (hereafter ‘the Bank’), has taken into account the clarification issued by the European Commission on the implementation of the enforcement of the export of sanctioned goods to third countries. Therefore, the Bank hereby advises that European Union (hereafter EU) operators should have in place appropriate due diligence procedures to ensure that exports of regulated goods are not diverted to Russia.
As a control measure, it is recommended that our customers incorporate additional conditions related to sanctions into purchase and sale contracts with business partners residing in third countries. It is advisable to insert such clauses into contracts, taking into account the risk of sanctions associated with specific clients, while also considering geographical, operational or other factors influencing an increased sanctions risk. These conditions should grant the customer the ability to unilaterally withdraw from contract execution in the event of United nations (UN), EU or national sanctions being imposed.
We also propose the inclusion of verification procedures encompassing the identification of end-users and recipients of goods that have been previously sold. If an item exported from the EU to a third country is re-exported to Russia, competent authorities may view the failure of the EU exporter to conduct thorough verification procedures as a violation of the Sanctions Regulation. Please be aware that cases in which an EU exporter deliberately omits such verification might be deemed a participant in a scheme to evade sanctions.
For information on good practice, see the Ministry of Foreign Affairs’ Practical Guidance for Economic Operators on Detecting and Preventing Avoidance and Circumvention of Trade Sanctions’. These guidelines highlight that all economic operators should have developed and implemented their company’s internal policies and control procedures to adhere to EU sanctions, aligning with the specifics of their business model. It is recommended that these internal documents are periodically updated.
Please note that during the implementation of sanctions, the Bank may request its clients to explain how they implement sanctions in their activities, whether they evaluate their partners, goods or services, and to provide the outcomes of such evaluations. In light of this, we recommend being prepared to provide the Bank with the appropriate documents.
For more information on the application of sanctions, you can refer to
- the European Commission’s website, under the FAQ section;
- the Šiaulių Bankas website, under Prevention of Money Laundering and Terrorist Financing and International Sanctions Compliance Policy;
- the Guidelines on sanctions compliance prepared by the Ministry of Foreign Affairs.