enhanced customer due diligence and customer identification in physical
absence. Each of the ways of identification differs in the scope of collected
personal data, methods of data collection, legal regulation and the use of
technological instruments.
Keywords: Prevention
of Money Laundering; Customer Identification; Customer Due Diligence;
Simplified Customer Due Diligence Measures; Enhanced Customer Due Diligence;
Electronic Signature
1.
INTRODUCTION
As
the market of payment instruments is growing, the choice of a suitable on-line
service scheme becomes an important issue for new players in the market. Newly
emerged FinTech businesses have already updated their business models. So far,
Lithuania has been positioned as a state having an innovative FinTech sector
and encouraging FinTech market players to deliver their services on the
Internet. Distance customer identification is crucial here. Therefore, we face
a constantly growing need to legally regulate the process of distance customer
identification so that not to violate principles of technological neutrality
and functional equivalence.
Customer
identification has become a key element of interior control of financial
institutions since suitable customer identification is essential for financial
institutions to avoid possible misuse and fraud by the client. However, the key
and the most important reason for strict customer identification procedures is
prevention of possible money laundering and financing of terrorism stipulated
in legal acts of the EU.
Strict
standards of the customer identification procedure stem from the directive
91/308/EEC of 1991 on prevention of the
use of the financial system for the purpose of money laundering (Council Directive, 1991), being the first instrument to bind member states to ban anonymous
accounts and anonymous payment cards in their financial and credit
institutions. Thus, financial institutions in all EU member states have no
right to service anonymous accounts.
A few
years earlier, in 1989, Financial Action Task Force was launched with the key
goal to combat shadow economy and monitor new trends and technologies. To
achieve the goal, FATF adopted 40 recommendations on combating money laundering
(Fatf
Recommendations, 2012). In 1996, FATF recommendations were revised in view
of the use of rapidly developing IT technologies for the purpose of money
laundering and of the growing number of electronic payment services companies,
most of which were not even registered as ordinary financial institutions. 130
countries approved and adopted the recommendations, which became the key
standard in anti-money laundering policies.
The
aforementioned FATF recommendations were transposed to the first EU anti-money
laundering directive. In particular, the tenth FAFT recommendation "Financial institutions should be prohibited
from keeping anonymous accounts or accounts in obviously fictitious names. Financial institutions should be required to
undertake customer due diligence (CDD) measures....." makes a serious
challenge for financial institutions and the new FinTech sector – offering
up-to-date financial services by means of digital aids and on-line client
identification procedures. In 2018, the FATF plenary
meeting emphasized the importance of the FinTech sector and the need to
encourage use of new technologies in the financial sector and increase
efficiency of money laundering prevention.(Outcomes Fatf Plenary, 2018)
Importance
of the FinTech sector and development of innovative tools of distance
verification of customer identity have also been emphasized by European Banking
Authority in their official opinion:
"there are innovative solutions that often involve non-face-to-face
verification of customers’ identity on the basis of traditional identity
documents (e.g. a passport, a driving licence or a national identity card)
through various portable devices such as smartphones" (Opinion of 23
JANUARY, 2018).
2.
RESEARCH PROBLEM
The
new challenge closely associates with differences between data processing in
physical and digital environments. In a physical environment, a personal
identification document is enough to verify one's identity. Personal identity
documents issued by the state form legal identity of the holder. The most
important legally acknowledged documents verifying one's identity typically in
a physical environment include an ID card and a passport.
The
latter are granted by authorized national institutions and constitute the only
legally valid identity verification instrument in most member states of the EU
(Prado). Financial institutions in the EU are imposed a duty to duly verify
customer identity in a physical environment (Directive, 2018/843) since
physical identity verification in presence of the customer is deemed more
reliable than that done in their absence. The same approach is typical in most
EU member states including Lithuania. Controlling agencies carefully monitor
identity verification processes and personal data collected by financial
institutions.
However,
the argument that customer identity verification is more reliable in a physical
environment has no serious grounds and has become obsolete. As international
migration has become common place, nation states are facing the need to
introduce reliable tools of personal identity verification and establish a
reliable link between the holder and the document at the moment of crossing the
border, leading the EU to the adoption of a decision on the use of biometric
data as a new standard of personal identification, Minimum security standards
for passports were introduced by a Resolution of the representatives of the
Governments of the Member States, meeting within the Council, on 17 October
2000.
It is
now appropriate to upgrade this Resolution by a Community measure in order to
achieve enhanced harmonised security standards for passports and travel
documents to protect against falsification. At the same time biometric
identifiers should be integrated in the passport or travel document in order to
establish a reliable link between the genuine holder and the document” (Council Regulation No
2252/2004). Biometric data may be collected and used only
within the limited scope of subjects.
Also,
the data may be collected and processed only by a single institution within the
state "In order to ensure that the information referred to is not made available
to more persons than necessary, it is also essential that each Member State
should designate not more than one body having responsibility for producing
passports and travel documents, with Member States remaining free to change the
body, if need be. For security reasons, each Member State should communicate
the name of the competent body to the Commission and the other Member States (Council Regulation No
2252/2004).
Ambitions
to use biometric data recorded in personal identity documents for the purpose
of rendering financial services were blocked by the ECJ decision of 2013
"The regulation not providing for any other form or method of storing
those fingerprints, it cannot in and of itself, as is pointed out by recital 5
of Regulation No 444/2009, be interpreted as providing a legal basis for the
centralised storage of data collected thereunder or for the use of such data
for purposes other than that of preventing illegal entry into the European
Union" (Judgment
of the Court, 2013).
It
has to be acknowledged that technical specifications of personal identity
instruments, such as standards and functioning of biometric data storage, is a
sensitive issue subject to usage limitations. Efficiency of the EU border
protection would be significantly lower if technical specifications of personal
identity instruments became public and available for the purpose of commercial
interaction: "This Regulation should lay down only such specifications
that are not secret. These specifications need to be supplemented by specifications
which may remain secret in order to prevent the risk of counterfeiting and
falsifications” (Council
Regulation No 2252/2004).
The
aforementioned arguments are enough to prevent EU financial institutions from
the use of biometric data recorded in personal identity documents for the
purpose of identity verification in a physical environment.
There
are no objective reasons to argue that physical identity verification by
collecting "relevant copies of identification and verification data"
(Directive
2018/843) is more reliable than the one made by way of
electronic means since (Law of the Republic of Lithuania on Prevention of Money
Laundering and Terrorist Financing).
1) the staff of financial institutions are not experts in forensic document
examination despite the fact that legal acts stipulate the obligation " to
assess appearance of the document checking in particular if the photo,
individual pages or included records have not been changed or corrected".
This is an absolutely declarative norm practically impossible to enforce. The
used legal technique is inappropriate while the standard checking in particular is vague. The required performance takes
special knowledge and expertise possessed by forensic experts and not by front
liners of financial institutions.
2) Employees of financial institutions are technically unable to
authoritatively "assess if the customer (customer's representative) acting
as a natural person has submitted a valid document to the financial institution
or any other authorised individual and identify if the submitted document
contains an authentic photo of the customer". Comparison of the physical
appearance with the photo in the document is not absolutely reliable as
individual people have different face recognition skills and abilities.
Scientific research reveals that such skills are very individual and divergent:
"Understanding the nature of individual differences in ability to perceive
and recognise face identity is of importance in real-life contexts ranging from
eye-witnessing to passport control..../ different aspects of face-perception
abilities to associate with more general tasks in quite specific and
differentiated ways" (Mccaffer, 2018). EU financial institutions
frequently deal with clients of Asian origin and face recognition becomes a
serious challenge to employees of financial institutions responsible for
customer identity verification. Researchers in image recognition argue that
"by assembling a large data set of labelled images and experimenting with
different neural network architectures, we have achieved a remarkable accuracy
75.03%, almost twice as high as the human average accuracy" (Yu Wang, 2016) In other words, a human being is unable to recognize faces with
100%accuracy, which is only a declarative norm practically impossible to follow
without a technical biometric data analysis.
3) EU legal acts lay down a requirement for financial institutions to
collect necessary documents, data and information directly from national data
systems and registers (Directive 2018/843); however, this is enough only to
verify document authenticity and not the dependence to the holder whose
identity is subject to verification.
The purpose of
this article is to focuses on actual legal instruments used by EU financial
institutions and FinTech agencies in the digital environment for client
identification and on major problems faced by FinTech companies rendering
modern financial services. Financial institutions and FinTech agencies often
face the problem of client identification which is of key importance in the
field
3.
METHODOLOGY
Methodologically, this research focuses on the
regulation of prevention of money laundering in the EU and Lithuania, and also
on the understanding of client identification. The authors use qualitative research
methods, such as the method of textual analysis and the analysis of case law.
4.
RESULTS
In
2005 the EU adopted a directive (Directive 2005/60/EC) on the prevention of the use of the financial system for the purpose
of money laundering and terrorist financing including newly introduced identity
verification concepts of due diligence measures and simplified customer due
diligence measures. The concept of simplified customer due diligence measures
entails simplified customer identity verification standards. Strict identity
verification procedures can be omitted where the risk of money laundering is
low.
The
same directive also includes an option of conditional anonymity
applicable in cases of limited sums, payments and e-transactions.
Until
2013, Lithuania's financial institutions had no legal opportunities to verify
customer identity on the basis of their electronic ID, although qualified
electronic signatures were already available at several agencies. In 2013,
Lithuania’s government adopted decision (Resolution NO 942, 2008) to amend the existing identity verification
procedures. The decision allowed
identity verification without physical presence of the customer.
"Financial
institutions and other economic operators shall be entitled to verify identity
of their customer holding Lithuanian citizenship without the physical presence
of the latter, i.e. by way of distance verification on the basis of a qualified
electronic signature solely in cases where the qualified certificate was issued
on the holder's identity verification in their physical presence" (Resolution no 942, 2008).
The
right to use qualified certificates was granted only for Lithuanian citizens
while certificates of non-Lithuanian citizens could not be used even if they
were issued in the EU. Although Lithuania was already taking part in EU's
single identification project STORK, the
essence of which was the opportunity for EU citizens to use their electronic
identity all over the EU, financial services were left out as an exception.
Although
the aforementioned directive of 2015 does not directly refer to distance
identity verification or electronic signature, member states were given an
opportunity to choose to allow customer identity verification on the basis of
documents, data or information collected from a reliable independent source (Directive 2005/60/EC).
It
was the occasion when the a qualified electronic signature was first
acknowledged equivalent to paper documents used by financial institutions for
identity verification before entering into business relationships. Not all
financial institutions opted for the opportunity, but the directive was of
particular importance to electronic financial agencies lacking a developed
physical customer service network.
Amendments
to the directive made in 2018 (Directive 2018/843) stipulated explicitly
that a qualified electronic signature is a suitable means of identity
verification applicable in all member states independently on the customer's
citizenship. The amendments additionally tightened the use of conditional
anonymity in e-commerce transactions leaving member states an opportunity to
choose independently whether to allow anonymous prepaid cards or not: „Member
States may decide not to accept on their territory payments carried out by
using anonymous prepaid cards.“, Lithuania chose to allow the use of such cards
since 2020-07-10. (Law of the Republic of Lithuania on Prevention of Money
Laundering and Terrorist Financing).
Much
more important amendments of the directive were made on distance identity
verification: „identifying the customer and verifying the customer’s identity
on the basis of documents, data or information obtained from a reliable and
independent source, including, where available, electronic identification means,
relevant trust services as set out in Regulation (EU) No 910/2014 of the
European Parliament and of the Council or any other secure, remote or
electronic identification process regulated, recognised, approved or accepted
by the relevant national authorities;“. Apart from specific measures to enforce
the electronic signature, member states are also allowed to independently
choose, regulate, acknowledge and approve processes of electronic
identification.
The
amendments of the directive have been transposed into Lithuania's legal system.
(Picture 1). Lithuania's legal acts clearly stipulate the procedure of customer
or beneficiary identification without the physical presence of the latter. The
aforementioned limitation on citizenship was revoked to allow identity
verification of non-Lithuanian citizens by means of electronic identity
instruments issued in the EU and compliant with high or substantial electronic
identification assurance schemes or by means of qualified electronic signature
certificates compliant with requirements set in Regulation (EU) Nr. 910/2014 (Regulation (EU) NO
910/2014). Lithuania's financial institutions may
offer their services to customers holding qualified certificates issued in EU
member states or certificates included in the EU Trusted List of Trust Service
Providers
(Trusted List Browser).
Another
important aspect is that Lithuania's regulation of the use of distance identity
verification still retains a redundant requirement imposing upon a financial
institution an obligation to make sure the electronic signature was issued on
identification of the customer in their physical presence: "customer's
identity was established in customer's physical presence at the moment of
issuance of an electronic identity instrument, compliant with high or
substantial electronic identification assurance schemes, or before issuing a
qualified electronic signature certificate".
.files/image004.jpg)
Figure 1: Requirements for customer or beneficiary identification where the
identity is established without physical presence of the customer or
beneficiary
Source: compiled by the authors
The
very fact of such requirement can make one wonder if Lithuania's legislature
calls into question proper implementation of Regulation (EU) No 910/2014 in EU member states, which is about electronic
identification aids with high security assurance and the qualified electronic
signature issued as an equivalent to a physical document with an equivalent
legal effect.
Regulation
(EU) No 910/2014 states that the security
assurance level should describe the level of reliability of the electronic
identification instrument in identity verification and ensure that an
individual claiming to have a certain identity is actually the person the
identity in question is ascribed to. Minimum
technical requirements, standards and procedures applicable to ensure low,
substantial or high security level should also be paid attention to. According
to the Regulation, a high security level is essential in issuance of qualified
electronic identification certificates.
The
set requirements have to be technologically neutral and possible to meet by
means of various technologies. (Regulation (EU) NO 910/2014). If a qualified electronic signature has been issued by a body
included into EU Trusted List of Trust Service Providers, it may be presumed
that the issuer is of "high security level essential in issuance of
qualified electronic identification certificates" and has unequivocally
verified person's identity before granting a qualified electronic signature.
Financial
institutions are bound by the valid regulation and have to rely on data by EU
Trusted List of Trust Service Providers whereas Lithuania's legal provisions
are in conflict with the position of the EU Commission stating that
"trusted Lists are therefore essential in ensuring certainty and building
trust among market operators as they indicate the status of the service
provider and of the service at the moment of supervision, while aiming at
fostering interoperability of qualified trust services by facilitating the
validation of, among others, eSignatures and eSeals" (Shaping Europe’s
Digital Future).
So
far, Lithuania has retained the requirement for financial institutions to make
certain and ensure that the used identification instrument
is compliant with the aforementioned requirement, that is the customers
identity was verified in their physical presence before granting a qualified
electronic signature certificate. At the same time, it has to be noted that the
responsibility for compliance with requirements set for customer or beneficiary
identification when the identity is verified without their physical presence
lies on the financial institution. Such requirement leads to certain problems:
1) Lithuania's financial institutions cannot
automatically accept EU issued qualified certificates.
2) On receipt of such certificates, the financial
institution has an obligation to inquire data about the identity verification
procedures from the certificate issuer. Also, in customer or beneficiary
identification by means of a qualified certificate and without physical
presence of the customer, financial institutions verifying customer or
beneficiary identification are bound to use additional data, documents or
information allowing verification of the authenticity of the customer's
identity.
EU
citizens are free to use qualified certificates, sign contracts, enjoy public
e-services and access sensitive health data within the entire EU, but they are
actually precluded from the use of financial services in Lithuania.
In
future, customers of financial institutions will be allowed to use a simpler
way of distance identity verification by means of electronic tools allowing
real time video identification (Picture 1). However, such way entails a problem
of matching the transmitted video image to the image contained in the document.
When matching is done visually, we face the problem of reliability, which has
already been discussed in the article.
Most of EU member states rely upon distance identity verification
techniques based on image transmission.
In
customer or beneficiary identification without physical presence of the
customer, financial institutions are bound not only to ascertain and verify
identity of the customer or beneficiary, but to refer to additional data,
documents or information necessary for the purpose of customer or beneficiary
identification and allowing verification of the authenticity of the customer's
identity and find out if there are grounds to apply enhanced identity
verification as well.
The
requirement to use additional data applies in all cases including those where a
secure electronic signature is used. Even when it is known that a person's
physical presence during their identity verification cannot grant absolute
accuracy of identification, but there is no additional requirement of mandatory
verification of the beneficiary's identity, client identification is presumed
to have been properly verified in cases of inter-institutional money transfers
and there is no obligation for the receiving institution to additionally verify
beneficiary's identity. Moreover, the grounds for the receiving institution to
claim customer's personal data from the transferrer remain uncertain.
When
money is transferred to your account from another financial institution, your
personal identity data, verified with due diligence by your account provider,
are not normally passed to the transferring financial institution. However, if
the customer opts for distance identity verification, any operations will be
carried out only on approval of the recipient's identity, which can hardly be
done without violation of principles of personal data protection.
A
uniform practice in the field is absent – financial institutions rely upon
individual solutions of distance customer identification.
Lithuania's
supervisory bodies are reluctant to go deeper into the problem and legal
grounds to claim recipient data without the consent of the recipient are still
absent. For example, if a fixed sum is transferred within the eurozone by means
of EU payment systems, the data necessary for the transaction include an IBAN
number and the purpose of payment whereas the name and the surname of the
recipient are not mandatory. Where the transfer is between EU financial
institutions, the sum will be transferred to the recipient's account on
submission of any name. Thus, the most important identifier in money transfer
within the eurozone is the IBAN number.
Practical
implementation of the requirement to identify the beneficiary becomes rather
complex as it is uncertain which body has to supply the data. The receiving
financial institution cannot disclose personal data of the IBAN holder on
request by the sending institution. Even when the sending financial institution
requests the sender to submit data on the beneficiary, there are no legal
grounds for the sending institution to disclose personal data without their
customer's consent. Financial institutions find themselves in a situation where
the redundant requirements become impossible to meet and the provider of
financial services is actually forced to violate legal regulations and risk
facing a penalty.
Although
the new directive of 2018 (Directive, 2018/843) granted wider opportunities to use distance identity verification, safe
electronic recognition tools of the same legal force and effect, a qualified
electronic signature and a possibility to choose means of real time video
identification, financial institutions chose to implement different technical
solutions (European
Commission Directorate-General For Financial Stability, Financial Services and
Capital Markets Union, 3 (2019) (Table 1).
Another
strict requirement valid in Lithuania concerns cases of distance identification
of residents of third countries rated by European Commission as high risk
countries (European
Commission, 2019). Where the customer is resident of any of
the aforementioned 23 countries, Lithuania's financial institutions are
instructed to mandatory ensure that "the first payment by the customer be
made through an account in the customer’s name with a credit institution
registered in an EU member state or a third country stipulating requirements
equivalent to parallel requirements laid down in the present Act and monitored
by competent supervisory bodies"
It
has to be noted that Directive (EU) 2018/843 provides that „Member States may
require obliged entities to ensure, where applicable, that the first payment be
carried out through an account in the customer’s name with a credit institution
subject to customer due diligence standards that are not less robust than those
laid down in this Directive”.
Words
"ensure, where applicable" are
of key importance here. In other words, such payment may be requested if
necessary, in case of a specific customer, but not in all cases. Why Lithuania
chose to impose the requirement universally remains uncertain. Also, the
directive refers to credit institutions and not to financial in general,
meaning that customers of electronic money institutions are even unable to make
such payment until they open a bank account in one of EU member states. For
example, a customer in Tunisia is unlikely to have an account in a European
bank and there is still no approved list of third countries complying with EU
standards of anti-money laundering.
It
is unclear why Lithuania's legislator has chosen such model. It actually
hinders development of modern FinTech services (as registration in Lithuania
entails applicability of Lithuania's legal regulation).
Why
physical identity verification is deemed more reliable than online also remains
in question. Why is additional data needed for distance identification by a
secure electronic signature, when the electronic certificate already contains
all necessary personal data? Why is video identification subject to additional
requirements although the identity document may be clearly exposed here and
modern technologies allow comparison of unique biometric data, which is
impossible in the physical environment where identification is deemed more
reliable?
Table 1: The main obstacles for involvement of
respondents in eLearning
|
NETHERLANDS
|
Video identification or
equivalent technique is associated to automatic transfer
data from the id document to
the relevant (liveness check)
|
|
UNITED
KINGDOM
|
Video Identification is used
in association with electronic verification Remote onboarding is used
primarily by newer, challenger banks who are online only and do not have
branch network.
|
|
BELGIUM
|
Use of video identification
is possible since Customer ID should be verified against one or more
supporting documents or reliable and independent sources of information which
enable obliged entities to confirm this data
|
|
LUXEMBOURG
|
Video identification
permitting the delivery by Luxtrust of eIDAS-qualified electronic signature
services
|
|
FRANCE
|
Video identification +
biometry is used (Currently no regulation governs video identification. A
regulation on remote onboarding which will validate an eIDAS scheme is being
prepared. Both substantial and high e-ID will be in scope of the regulation.
Solutions are based on picture comparisons between the picture contained in
an official identity paper (passport or id card) and a selfie.)
|
|
LIECHTENSTEIN
|
Video identification
|
|
ITALY
|
Video identification and
biometrics or other technology solutions
|
|
PORTUGAL
|
Use of video conference
(e.g. Caixa Geral de Depositos) in addition with biometrics (Banco BNI
Europa) For these use cases, the legislation requires financial institutions
to have a person, in real time, validating the client’s identity.
|
|
SPAIN
|
Video identification systems
is used. In some cases, in addition with electronic signature. Regulation is
in place for both attended and unattended video identification. Widely used
for mobile on-boarding by most banks and in some cases also for web-based (BBVA,
Santander, OpenBank, ImaginBank, Self Bank, Evo Banco and Bankia)
|
|
GERMANY
|
Pursuant to BaFin Circular
3/2017 Video-Identification is a recognized form of identification procedure
in accordance with the AML Act in Germany
|
|
ESTONIA
|
Video identification (can be
completed with biometrics)
|
|
LATVIA
|
Video identification
(acquisition of data accrediting the identity of a natural person from a
credit institution or payment institution)
|
|
POLAND
|
Use of Video-identification
with or without biometry
|
|
SLOVAKIA
|
Video call identification
(via special application of the bank)
|
|
AUSTRIA
|
Identification through
video-chat has been approved by the Austrian Financial Market Authority (FMA)
on 3 January 2017.
|
|
ROMANIA
|
Video identification.
|
|
HUNGARY
|
Real time video
identification via comparison of the ID photo with the of customers. Used by
OTP Bank, Gránit Bank, Takarék Kereskedelmi Bank, Cofidis Bank,
MKB Bank.
|
|
SLOVENIA
|
Video identification +
Identity card check is permitted to on board customer for account opening.
|
|
MALTA
|
Video Identification: The
(prospective) customer’s identity is verified during a video conference call
|
Source: adapted from Report on existing
remote on-boarding solutions in the banking sector
The
number of EU countries where financial institutions introduce modern identity
verification aids is growing. Legal environment has become favourable to
FinTech development. However, legal regulation in Lithuania is still limiting
development of the service. Lithuania has been positioning itself as a FinTech
leader in the UE (Lithuania’s
Impressive Fintech Growth Extends, 2020) emphasizing clarity, transparency and rapidness of licensing essential
for FinTech businesses. However, the disproportionate legal regulation of the
process of identity verification in the electronic environment may trigger
problems forcing FinTech companies to move their business outside Lithuania.
FinTech
business is not limited by national boundaries and trade their services in the
electronic environment to customers from all over the EU and even outside the
EU. FinTech companies working in the sphere of e-money and e-payment may be
drawn as an example (Picture 2). If they had started in Lithuania, they would
not be able to offer their services outside Lithuania as successfully as they
are doing now from other countries. The success directly depends on legal
regulation of identity verification, application of additional requirements and
newly introduced practices.
.files/image006.gif)
Figure 2: FinTech companies using
video identification as a means of identity verification
Source: Compiled by the authors
5.
CONCLUSIONS
Lithuania
has been positioned as a state with a FinTech-friendly environment. However,
its national legal acts and practices of supervisory bodies impose
disproportionate regulation of identity verification procedures in the
electronic environment. The physical process of identity verification is given
a priority as more reliable than distance identification – a conclusion arrived
at having analysed requirements set upon the identity verification procedure.
The
distance identity verification procedure based on a secure electronic signature
issued in the EU is being hampered by an excessive requirement to make sure the
electronic signature was issued on identification of the customer in their
physical presence. It seems that Lithuania's legislature calls into question
monitoring and performance of secure qualified electronic signature issuers
even where the issuer complies with requirements stipulated by the European
Commission.
In
case of video identification, customers face additional requirements to disclose
personal data of third-party beneficiaries along with submission of their own
personal data, which is already present in the submitted documents, although
the requirement is absent in case of physical customer identification.
Directive
(EU) 2018/843 provides the right of nation states to use their own discretion
in deciding on the applicability of enhanced identity verification and the
requirement to make the first payment through an account at a bank registered
in the EU. However, the provision "may require obliged entities to ensure,
where applicable" has been transposed to Lithuania's legislature as the
requirement" to ensure that the first payment by the customer be made
through an account in the customer’s name with a credit institution registered
in an EU member state or a third country stipulating requirements equivalent to
parallel requirements laid down in the present Act and monitored by competent
supervisory bodies.
At
the moment of writing this article, there was still no approved list of third
countries complying with EU standards of anti-money laundering.
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