For residents of Russia

Information for residents of Russia FAQ Bank of Lithuania recommendation on the provision of services via the CENTROlink payment infrastructure

Information for residents of Russia

Bank of Lithuania, the Papaya Ltd SEPA payment provider, stated that all financial market participants connected to CENTROlink through the Bank of Lithuania were advised to stop providing payment services via CENTROlink to companies registered in Russia. Its citizens residing in Russia and companies in which its citizens living in Russia have the qualifying holding in the authorized capital and/or voting rights.

FAQ

Bank of Lithuania recommendation on the provision of services via the CENTROlink payment infrastructure

We have a case when a client who is / whose UBO is a citizen of the Russian Federation residing in Cyprus. Does the recommendation apply to this customer?

As the clarification letter states, the recommendation is to be applied when the UBO of a company is a citizen of the Russian Federation residing in Russia therefore the recommendation is NOT applicable if the UBO has legal residence in any country other than Russia.

We have a client who is / whose UBO is a citizen of the Russian Federation holding a Schengen visa. Is the recommendation applicable to this client?

The recommendation is applicable if this individual holds a Schengen visa or a national visa which allows staying the Schengen area or a given country in the area for less than 6 months (180 days) (A, C, short term D type visas).

If this individual holds a national visa which entitles them to stay in the issuing country for more than 6 months (180 days) (longer term type D visas), then an exemption from the recommendation is allowed given that the ABIC holder ensures compliance with all other applicable regulations including national sanctions legislation and EU regulation 833/2014.

If the ABIC holder decides to conduct payments via CENTROlink for citizens of the Russian Federation who are not permanent residents in another country (only have a longer-term type D (or similar) visa / temporary residence permit), such clients should be monitored and payments via CENTROlink only allowed during the validity period of the visa / temporary residence permit. Same principle applies to visas issued by countries outside of the Schengen Area.

Is the recommendation applicable to a client who is / whose UBO has dual citizenship from the Russian Federation and Malta and resides in Russia?

Yes, in this case the primary country of the individual’s interests is considered to be the Russian Federation and not Malta hence the recommendation is applicable. Same principle applies where dual citizenship of the Russian Federation and any other country within or outside the EEA is held.

What as per your definition is "qualifying holding "?

„Qualified holding“ shall mean more than 25% of authorized capital or voting rights in line with the definition of the beneficial ownership as prescribed in the law on the prevention of money laundering and terrorist financing of the Republic of Lithuania.

We have a client which has two BOs who are citizens of Russian Federation with residence in Russia. One of them owns 9% of company’s shares and the other – 18%. Is the recommendation applicable in this case?

Yes. Individuals who are subject to the recommendation collectively own more than 25% of the company’s shares therefore payments for the benefit of this client should not be conducted via CENTROlink.

Our client meets the recommendation criteria – should we return or freeze the funds / place the funds on hold?

The recommendation does not mention or in any way require the freezing of client funds. Each individual or company meeting the recommendation criteria should be allowed to withdraw all of their funds from the accounts held with the ABIC holder in CENTROlink.

We have a client which meets the criteria described in the recommendation. Can the client transfer out their own account balance?

Account balance may be transferred out via CENTROlink or other payment channels available by the client themselves with the approval of the ABIC holder.

Bank of Lithuania recommendation on the provision of services via the CENTROlink payment infrastructure

Could you please clarify if in order to transfer out the remaining account balance only own account transfers are allowed or also payments to third parties?

If your client does not have an alternative account in another financial institution, you may allow transfers to third parties. However, we advise to receive written confirmation from the client that they do not hold any accounts with other financial institutions before allowing third-party payments. ABIC holder should also ensure that any third-party payments are conducted with the purpose of transferring the account balance and not as regular business transactions which should not be allowed.

Are we required to monitor every incoming and outgoing transactions (to check every counterparty for relation to the criteria mentioned in the recommendations)?

The recommendations are applicable to your clients (individuals and entities with which the ABIC holder has a business relationship) only hence monitoring counterparties for recommendation criteria is not required.

Does the Bank of Lithuania allow us to share the source of the recommendation with a client or any stakeholder like, for example, the Financial Ombudsman?

The source of the recommendation is public and may be shared by providing the below source links. It should be noted, however, that the recommendation is only applicable for services provided via the CENTROlink payment infrastructure and does not affect ABIC holders’ ability to provide services via other channels.

English: Lietuvos bankas.

Lithuanian: Lietuvos bankas.