In the account, only a pension of 286 euros, and found problems: the bank requires proof that it does not launder money

Mikas, a reader who has approached Delfi, complains about a registered letter received from his bank.

“The bank and the government clearly see that only the disability pension that Sodra pays is included in my bank account. I do not have online banking services, no other money enters or leaves the account. What else is the profile of a natural person? What else is terrorism and money laundering from a disability pension of € 286? Let them wash their heads there with such laws and in this order! ”The man got upset.

You do not understand why it is necessary to complete and update the questionnaire regularly. The man indicated that the questionnaire was related to the prevention of money laundering and terrorist financing.

“The bank spat out that pandemic. The bank spits out that the person is disabled. It is up to the bank to transfer only the pension to the account. To spit to the bank that a person lives in the area and to get to the bank, it is necessary to take 2 buses. But you need to register and go and fill out some kind of questionnaire, because everyone in Lithuania is potential terrorists and money launderers, unless proven otherwise, ”Mikas said.

He says he won’t want to prove “there is no camel.” The man believes that if the data visible to the bank is sufficient to understand that a person is not involved in possible terrorist financing or money laundering, a similar financial transaction is not taking place that still requires such questionnaires.

“A person receives a pension, a person takes it out at an ATM. Stay away from people with no one, the bureaucrats are not gathered! Why is so much nonsense happening?”, The reader wondered.

In addition to the questionnaire, banks may face penalties.

Eivilė Čipkutė, president of the Lithuanian Banking Association, explains that banks do not interview clients just for themselves.

“The customer form is filled out for the first time before opening a bank account and then it is regularly updated to ensure that all the information it contains is correct. This is not an initiative devised by banks, the obligation to know their clients for financial and credit institutions is established by the Law for the Prevention of Money Laundering and Terrorism Financing. Banks that do not comply can face official sanctions and foreign financial institutions can terminate their cooperation with them, ”explains E. Čipkutė.

The “Know Your Customer” principle is one of the hallmarks of the financial industry and an integral part of the prevention of money laundering and terrorist financing, as the information collected helps to identify suspicious account movements.

“A request to update information in person should not be treated as a mandatory procedure for all customers of financial and credit institutions, without exception, who have more than 3 million in Lithuania. It can be compared to checking passengers at the airport – although at choose a travel ticket, we choose the address, we indicate our name and surname, in the departure terminal the specialists must check the documents, luggage, etc. of each traveler ”, explains the bank representative.

It explains that banks individually determine how often the data should be updated, and most Lithuanian banks notify the next deadline for updating the questionnaire data on average 3 months before the deadline. However, sometimes there may be situations where the data needs to be updated faster; then customers are informed by email or telephone, as well as by message at the Internet bank.

“Recognizing the importance of this obligation, banks strive to ensure that this procedure is as straightforward as possible for customers. The form can be updated in the Internet bank, the customer service center and, in the case of digital banks, also in the mobile applications. According to the Lithuanian Banking Association (LBA), currently around 70% update the profiles of online banking customers. Of course, there are several individual situations, and the coronavirus pandemic has further stimulated the search for ways to treat them quickly and effectively remotely, ”says E. Čipkutė.

If it is not possible to complete the questionnaire online, he offers to make a phone call and ask: “According to LBA members, about half of the customers who contacted the phone can be resolved remotely and it is not necessary to go to the department “.

He stressed that updating the client’s profile is necessary not only when requested by the bank, but also when personal data changes, such as contact details, information related to taxes or cash flows, participation in politics.

“Due to the nature of the data collected, the automated collection of official databases would not be an appropriate way, since some of the information that banks must collect and update is not collected, while others are not available to institutions. Furthermore, some issues are specific related to the use of specific bank accounts and other services, ”explained E. Čipkutė.

The Bank of Lithuania proposes to search for a common language and, if not, apply

Reda Stanytė, Head of the Money Laundering Prevention Division of the Bank of Lithuania, explains that all financial market participants must know their clients properly and control clients’ business relationships, this is required by the Law on Prevention of Money Laundering and Financing of Terrorism. Banks and other financial institutions are obliged to ensure that the documents, data or information provided during the identification of the client and the beneficiary are appropriate and relevant.

“It is true that the legislation does not specify how much, what information and how often financial institutions must request a client in each case, and then update this information, that is, financial institutions are left to decide on the risk of a certain client. “says R. Stanytė.

Explains that information on customers at higher risk of money laundering and terrorist financing should be collected and updated more frequently and to a greater extent (for example, when requesting additional documents and information from a customer), and information on customers with lower Risk may need to be updated less frequently and to a lesser extent.

“The answers to the customer knowledge questions must be provided by the customer himself, as public records contain only general data about people, especially physical ones, so only the customer can provide the necessary more detailed information about their income, activities, settlements, etc. “, taught by the director of the institution.

However, no legal act requires financial institutions to collect customer information in the form of questionnaires.

“This is the most widely used tool in practice (including ease of use), but a financial market participant may collect the necessary information in other ways, depending on the information already available about the client, their history, other factors such as access to the bank, etc.) ”, – explains R. Stanytė.

To the knowledge of the Bank of Lithuania, the majority of clients complete questionnaires from financial institutions online; this is the easiest and fastest way to provide information. However, exceptions to the rules are possible if it is not possible to submit the questionnaire online.

“We constantly emphasize that in risk management, financial market participants must apply measures that are proportional to the risk in each individual case. (…) In this case, we would suggest that the client contact the financial institution and explain the situation in order to find solutions and alternatives so that the client can provide the information. If it is not possible to find a common language, contact the Bank of Lithuania ”, suggests R. Stanytė.