SEB Bank implements the Money Laundering and Terrorism Financing Prevention Policy in accordance with acts of law of the Republic of Lithuania, local and international legal acts.
The Compliance Department is responsible for development of the above-mentioned Policy and implementation hereof at the Bank. Other tasks of the Department include: familiarisation of employees with the Policy and joint participation in implementation of the established prevention measures. Goals of the Bank Money Laundering and Terrorism Financing Prevention Policy, its implementation procedures and measures are regulated in the special general documents of the Bank and SEB Group, i.e., SEB Instruction Know Your Customer (KYC), Instruction for procedures against Money Laundering and Financing of Terrorism for the SEB Group, Anti-Money Laundering and Anti-Terrorist Financing Requirements and Identification Requirements.
The main money laundering and terrorism financing prevention procedures are as follows:
- Know Your Customer procedures;
- customer identification;
- monitoring of the financial transactions performed by customers;
- identification of suspicious transactions and termination hereof (special systems introduced at the Bank enable to efficiently implement the procedure);
- keeping of information about transactions performed by customers and register handling;
- providing timely information to the Bank staff and training;
- internal control.
SEB Bank operates observing rigid norms of ethics and moral and cooperates with such customers whose nature of funds and assets is declared and legitimacy hereof causes no concern. The Bank is also engaged in the prevention of unintentional and indirect criminal acts. For this purpose, the Bank proactively cooperates with the Financial Crime Investigation Agency under the Ministry of Interior and other legal enforcement institutions.
Compliance of the Bank prevention procedures with the acts of law of the Republic of Lithuania is inspected by the Bank of Lithuania and external auditors
Laws on the prevention of money laundering and terrorism financing
List of laws, regulations and international legislation on the prevention of money laundering and terrorism financing followed by the SEB Bank.
Laws and regulations of the Republic of Lithuania
- Law on the Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania;
- Law on the Implementation of Economic and other International Sanctions of the Republic of Lithuania;
- Instructions approved by the Board of the Bank of Lithuania for credit institutions to suppress money laundering and/or terrorist financing;
- Resolution of the Government of the Republic of Lithuania "On the approval of the list of criteria for regarding a customer as causing a low risk of money laundering and/or terrorist financing and of criteria for determining the existence of a high risk of money laundering and/or terrorist financing and of the rules to identify the Customer and the beneficiary as well as several interrelated monetary operations and on the establishment of a procedure for providing information about the noticed evidence of potential money laundering and/or terrorist financing, violations of the Law on the Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania and sanctions taken against offenders";
- Resolution of the Government of the Republic of Lithuania "On the approval of the list of criteria on the basis whereof a monetary operation or transaction is considered suspicious or unusual and of the practice statement for suspending suspicious monetary operations and transactions and submitting information about the suspicious or unusual monetary operations or transactions to the Financial Crime Investigation Service under the ministry of the interior";
- Resolution of the Government of the Republic of Lithuania "On the approval of the rules for keeping the register of suspicious or unusual monetary operations and transactions of the customer and identification of the criterion that characterises large-scale permanent and regular monetary operations".
- Regulation (EC) No 1889/2005 of the European Parliament and of the Council of 26 October 2005 on controls of cash entering or leaving the Community;
- Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing;
- United Nations International Convention for the Suppression of the Financing of Terrorism;
- United Nations International Convention for the Suppression of the Financing of Terrorism;
- United Nations Security Council resolutions;
- 40 recommendations of the international Financial Action Task Force (FATF);
- 8 recommendations of the international Financial Action Task Force (FATF);
- The Basel Committee recommendations on customer identification;
- Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism – USA PATRIOT ACT, Act of 2001);
- Wolfsberg Anti-Money Laundering Principles for Correspondent Banking;
- Global Anti-Money Laundering Recommendations for Private Banking (Wolfsberg Anti-Money Laundering Principles).
Why Do Banks Ask?
The bank acting in compliance with the international and national requirements regulating the prevention of money laundering and terrorist financing follows the Know Your Customer (KYC) principle. Therefore, the bank’s request to provide information should be considered as a routine process that applies to all customers.
The financial market participants shall ensure that when using their services and systems all necessary measures are taken to prevent financial crime, identity thefts, transfer or storage of the proceeds of the criminal offence or financing of criminal acts. It is also mandatory to comply with international financial sanctions and ensure that they are not violated.
To achieve the above goals, we need to know our customers, i.e. to understand their business activities, the expected bank account transactions and volume of such transactions and potential source of funds. When such information is available, it is easier for the bank to identify and prevent suspicious transactions in the accounts, thus protecting customer funds and preventing possible financial crime, money laundering, terrorist financing or non-compliance with sanctions.
The main legislation setting out requirements in the field of prevention of money laundering and terrorist financing:
- Law of the Republic of Lithuania on the Prevention of Money Laundering and Terrorist Financing
- Law of the Republic of Lithuania on the Implementation of Economic and Other International Sanctions
- Guidelines on the prevention of money laundering and / or terrorist financing for financial market participants approved by Resolution No. 03-17 of the Board of the Bank of Lithuania
- Legal acts of the Financial Crime Investigation Service under the Ministry of the Interior of the Republic of Lithuania
- 6th European Union Directive on the Prevention of Money Laundering and Terrorist Financing
- Frequently asked questions prepared by the Bank of Lithuania on the prevention of money laundering and terrorist financing
We are obliged to collect such information in accordance with the requirements of international and national legislation that regulates implementation of the Know Your Customer (KYC) principle. The customer questionnaire form is one of the methods enabling us to collect relevant customer data. It shall be filled out before starting cooperation with the customer and aiming to continue it. The update periodicity depends on various factors, however when the questionnaire update maturity is approaching, we inform our customers via the Internet Bank and by an email message.
We would like to emphasize that the practice of collecting information about our customers is not unique for Lithuanian financial institutions, but it is a global trend. Collection of up to date customer information helps us detect and prevent suspicious transactions in the accounts and protect our customer funds.
Yes, minors are also required to fill out the questionnaire. If you are a minor under the age of 14, one of the parents, stepparents or guardians are required to fill out and sign the questionnaire. The minors under the age of 14–18, who present a consent of one parent or other legitimate representatives to independently and in his/her own discretion to dispose of the funds on the account(s), the questionnaire for natural persons shall be filled out by the minor himself/herself.
Are the customers, who obtained the life insurance coverage or accumulate funds with Pillar II and III pension funds, required to fill out the questionnaire for private individuals or legal entities?
The requirement to collect data about its customers seeking to comply with the Know Your Customer (KYC) principle and the prevention of money laundering, terrorist financing and sanctions shall be applied to all market participants, including insurers and investment management companies. Therefore the customers of UAB SEB investicijų valdymas and SEB Life and Pension Baltic SE Lithuanian Branch are also required to provide data.
- The questionnaire for private individuals may be updated by logging into the Internet Bank (Other/Settings --> Settings --> My data).
- The questionnaire for legal entities may be updated by logging into the Internet Bank (Other/Settings --> Settings --> Customer’s Questionnaire).
- The questionnaire also may be filled out at the bank unit.
It may be done by the customer himself / herself (in case of a legal entity – by the company head) or any duly authorized person. It is necessary to provide a document proving the person’s identity.
The customer questionnaire may be filled out in Lithuanian, English and Russian languages.
Why am I required to provide information about my place of residence for tax purposes and the taxpayer code?
Such information is required in accordance the Common Reporting Standard (CRS) and an agreement between the Government of the Republic of Lithuania and the Government of the United States of America on Improving the Enforcement of International Tax Obligations and the Implementation of the Act on Enforcement of Tax Obligations Applicable to Foreign Accounts – all financial institutions are obligated to collect and revise customer data or the country of residence of the customer’s ultimate beneficiaries / controlling persons/entities (-es) for tax purposes.
For more information please visit https://www.vmi.lt/evmi/crs-teisine-baze
Why am I required to specify the taxpayer’s code, to fill out the additional form (W-9, W-8 BEN), if I live / work / have other relations with the USA?
Since 01-07-2014, the requirements of the Foreign Account Tax Compliance Act (FATCA) adopted in the USA are applied in Lithuania. Due to the above reason, all banks and financial institutions operating in Lithuania are required to collect additional information about their customers, seeking to identify their tax residence. Having identified such customers, who are the United State tax residents or possibly are the United States tax residents (the U.S. telephone number, the U.S. address), the bank shall have a right to request the customer to confirm that the he/ she is considered the U.S. tax resident (W-9) or to deny it (W-8BEN).
The above information (the forms included) is collected in accordance with the agreement of the Government of the Republic of Lithuania and the Government of the United States of America on Improving the Enforcement of International Tax Obligations and the Implementation of the Act on Enforcement of Tax Obligations Applicable to Foreign Accounts, and the order of Head of the State Tax Inspectorate of the Republic of Lithuania on the approval of the rules for filling in, amending and submitting the RRC910 report of the financial accounts of foreign persons and legislation of the Republic of Lithuania on the prevention of money laundering and terrorist financing.
Why am I required to specify the expected turnover in my account or expected cash transactions? Will I be able to make payments and cash transactions, if the actual cash turnover is lower / higher than indicated in the form?
Such information is requested aiming to understand the customer’s activity, type of cash transactions and to forecast the expected financial behavior. It enables us to realize what financial transactions are standard for the customer, and which transactions may be considered non-standard – aiming to prevent the potential financial crime and the loss of customer funds. In such event, if the expected turnover considerably differs from the actual turnover, the bank may ask the additional questions and request that the customer updates the questionnaire.
We would like to note that collection of such information is unrelated to the transaction limits set for you.
Why does the bank ask: “Are you, your close family member or a close associate a politically exposed person (PEP)? Why am I required to provide such information?
Information about politically exposed persons is collected whereas it is requested by the Law on the Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania. The status of the politically exposed person or relation with such person does not mean that the bank account may not be opened, or availability of the banking services may be limited. The above means that the bank is required to perform the additional procedures established by law.
The law obligates the bank to collect information about the business relations with the customer, the purpose and the origin of funds. The workplace and job position constitute a part of such information.
It is not necessary to specify the exact title of your current position, however we request to indicate your specialization or your position grade: a specialist, middle manager, director general.
The law obligates the bank to collect information about the business relations with the customer, the purpose and origin of funds. Information about the customer’s accounts with other banks enables us to identify what transactions are standard and what transactions are not typical for the customer. Such information helps us to understand for what financial flows an account at SEB bankas is used (employment income, investment, etc.).
Is it important to provide the list of services of SEB bankas and its subsidiaries to be used by me? If I do not specify any service will I be able to use such service, if necessary?
Of course, such service will be available to you in future. Current needs and plans of the customer are specified in the form. It helps the bank to submit relevant and useful proposals.
A request to provide information is a standard request and may be applied to any customer of the bank.
When monitoring the transactions, we assess whether the transactions performed are the customer specific transactions. If any deficiencies are identified, the bank requests to provide more detailed information and to submit the additional documents. Therefore it is really important to update the questionnaire for customers and to provide relevant and correct information, e.g. in case any change in the company head or shareholder, activity (occupation), turnover, place of residence (place of business) it is necessary to inform about it. If acute data is available to us, it is easier for the bank to ensure your account security, prevent possibly illegal or suspicious acts.
Such information is assessed seeking to understand the basis for making the payment and the type of business relations between the payer and the payee, therefore we kindly request to specify the payment purpose and avoid ambiguous entries, and to precisely and clearly specify the payment purpose.
Yes, SEB bankas implements the requirements of acts of law of the Republic of Lithuania and also ensures that information provided by its customer is considered secret and kept in accordance with the laws on legal protection of personal data of banks of the Republic of Lithuania and the Republic of Lithuania. The relationship between the bank and the customer regarding the bank secrecy are also regulated by the General Rules of SEB bankas. The Law on Banks of the Republic of Lithuania establishes in what cases, to whom and on what basis and to what extent the information constituting bank secrecy should be disclosed to third parties, for instance to institutions performing such functions as pre-trial investigation, criminal intelligence, intelligence, tax administration, the Deposit Insurance Fund and management of liabilities to the Investors Insurance Fund, the supervision of the processing of personal data, the supervision of financial markets and out-of-course dispute settlement between the financial market participants in accordance with the Law on the Bank of Lithuania of the Republic of Lithuania, the prevention of money laundering and (or) terrorist financing, and to notaries and bailiffs, if such information is necessary to perform the functions of notaries and bailiffs established by law.
Does the bank breach the General Data Protection Regulation (GDPR), when requesting to provide the personal data of customers and their partners or data of ultimate beneficiaries of a legal entity?
The request to provide additional information or documents is not considered a violation of the Regulation whereas the bank is aiming to implement the Know Your Customer principle and other requirements of acts of law. The bank requests to provide information about ultimate beneficiaries whereas the acts of law obligate us to understand the customer’s management structure and to duly identify the private individuals engaged in the company management.
On what basis does the bank request third parties (related to the transactions performed) to provide documents proving the origin of funds?
The request to provide additional information (sometimes from third parties) arises from the requirement to financial institutions established in the Law on the Prevention of Money Laundering and Terrorist Financing to take adequate measures to establish the source of funds that are involved in the business relationship or transaction. The origin (source) of the funds helps to make sure that the performed transaction is not related to illegal acts and corresponds to the nature of the customer’s activity.
What measures may be taken, if I refuse to fill out the form / to provide the additional documents or provide incomplete or inaccurate information?
Based on Item 18 of Article 9 of the Law on the Prevention of Money Laundering and Terrorist Financing, the bank is not allowed to enter into any transactions, establish or continue the business relationship with the customer, who fails to provide the documents about the origin of funds (wealth), type of transactions, business relationship with the parties to the transaction, information about the company management structure and ultimate beneficiaries or any other acute information, or provides incomplete or inaccurate data. Article 18 of the above Law establishes that in such cases when the customer avoids or refuses to provide the additional information demanded by the bank, the bank may refuse to perform a monetary transaction or any other transaction, terminate the transactions or business relationship.
Why does the bank request to provide a copy of identity document of private individual or representative of legal entity?
Acting in accordance with the requirements of the Law on the Prevention of Money Laundering and Terrorist Financing and seeking to implement the Know Your Customer principle, the bank may provide services only in such case, if the identity of the customer or its representative is properly verified. For the above purpose, it is necessary to make a copy of the pages of the presented identity document that include an image of a private individual and other data necessary for the identity verification or to scan the document.
Why prior to the bank account opening it is necessary to provide the additional information/ documents?
Before establishing any business relationship, we must understand the purpose of the account opening, identify the source of income and the type of expected transactions. In some cases when the bank does not have enough information, the bank requests to provide an employment contract, agreements with the partners, the documents proving the address of residence (or business address).
Can the bank independently initiate the collection of information from state institutions, such as the State Tax Inspectorate, the Register of Legal Entities, city borough, etc.? Why am I required to provide additional information?
Acts of law obligate the bank to directly collect information from its customers. Besides, the bank is not given access in every case to the data collected by the state institutions or to obtain non -public data.
Ultimate beneficiary in all cases is defined as an individual, who directly or indirectly owns or controls company, holding a sufficient percentage of shares or voting rights. A shareholding of 25 per cent plus one share or an ownership interest of more than 25 per cent in the customer held by a natural person shall be an indication of direct ownership. A private individual, who has control over the company that owns 25 per cent plus one share, or an ownership interest of more than 25 per cent in the customer shares, shall be deemed to be an indirect owner.
In such cases when it is impossible to identify private individuals, whose shareholding makes 25 per cent plus one share, ownership interest of more than 25 per cent in the customer, a natural person holding the position of senior manager shall be identified as the beneficial owner, and as a rule – the company executive.