LITHUANIA Law and Practice Contributed by: Donatas Šliora and Marius Matiukas, ADON legal
The Financial Crime Investigation Service (FCIS) serves as the central agency dedicated to anti- money laundering (AML), combating the financ - ing of terrorism (CTF) and international sanctions compliance in the financial sector. It plays a cru - cial role in developing and implementing national AML/CTF policies, establishing preventative measures and conducting pretrial investigations into suspected cases of money laundering and terrorism financing. In certain scenarios, the regulatory oversight of a financial institution might involve both the Bank of Lithuania and the FCIS. For instance, com - pliance with AML/CTF reporting falls under the FCIS’s purview but is also a fundamental aspect of the Bank of Lithuania’s wider supervisory role. The two authorities frequently collaborate in are - as where their responsibilities overlap, ensuring a comprehensive regulatory and enforcement framework. There are a number of non-financial sector-spe - cific institutions that may regulate or supervise various aspects of financial service providers, such as the State Data Protection Inspectorate (which supervises compliance with personal data processing requirements) and the Compe - tition Council (which supervises compliance with competition law). 2.7 No-Action Letters While the Bank of Lithuania maintains an open and collaborative approach, actively consulting with financial market participants to help ensure compliance with licensing requirements, the regulator emphasises that it does not have the authority to provide legally binding interpreta - tions on regulations that may be broad or open- ended. Consequently, the Bank of Lithuania lacks the formal mandate to issue “no-action” letters. Instead, the jurisdiction demonstrates regulatory
flexibility through alternative mechanisms, such as the regulatory sandbox programme or lenien - cy provisions for newly established businesses. In 2024, the Lithuanian Parliament introduced a new administrative agreement mechanism. Under this framework, the Bank of Lithuania and a supervised entity may enter into an agreement to amicably resolve situations where grounds exist for administrative investigations. This mechanism: • ensures a swift resolution of investigations into potential misconduct; • promotes proactive co-operation from finan - cial market participants; and • facilitates the correction of compliance issues through collaboration between the Bank of Lithuania and supervised entities. 2.8 Outsourcing of Regulated Functions Lithuanian regulations permit the outsourcing of regulated functions to external service provid - ers, ensuring flexibility for fintechs and financial institutions. These arrangements must adhere to strict obligations designed to maintain compli - ance and manage risk. Importantly, Lithuania’s outsourcing requirements generally align with EU legislation and relevant guidelines from the European Supervisory Authorities (ESMA and EBA). DORA is also directly applicable to ICT- related outsourcing. Fintechs retain ultimate responsibility for outsourced functions, ensur - ing adherence to all applicable regulations, even when working with third-party service providers. In addition, overtly extensive outsourcing could be considered a feature of an “empty shell” and draw the attention of supervisors. Before outsourcing, fintechs must conduct thor - ough due diligence on the chosen service pro - vider’s capabilities, experience and resources.
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