International financial sanctions. Implementation

The Financial Crimes Investigation Service, in exercising the functions of the competent authority as specified in Article 11 of the Law on International Sanctions, coordinates, supervises and ensures the implementation of financial sanctions(restrictions on the disposal of funds and economic resources) in the Republic of Lithuania:

•         monitor and regularly check and collect data on the implementation of financial sanctions from financial institutions and other obliged entities as defined in Article 2(7) and (10) of the Republic of Lithuania Law on the Prevention of Money Laundering and Terrorist Financing;

•        on its own initiative or on the basis of information provided by the competent authorities of foreign countries, financial institutions of the Republic of Lithuania or other entities, having established, in accordance with the criteria laid down in the instruments governing international sanctions, that a legal person or other organisation without the status of a legal person owns or is controlled by an entity subject to sanctions, shall adopt an order establishing that financial sanctions are to be applied to a legal person or other organisation without the status of a legal person that is owned or controlled by that entity or other organisation. The list of legal persons or other organisations without legal personality which are owned or controlled by the sanctioned entity, established or updated on the basis of the adopted orders, shall be made public on the website of the Financial Crimes Investigation Service and made available to the registrars of the State registers and State information systems within 2 working days from the adoption of the respective orders;

• take decisions on exemptions from, or authorisations to waive, restrictions and obligations, as laid down in the Cabinet Decision on the Supervision of the Implementation of International Sanctions, in accordance with the procedures set out in the Schedule on the Implementation of International Sanctions;
• summarise and publish information on the financial penalties imposed.

Financial sanctions: restrictions on the rights of internationally sanctioned entities to hold, use and dispose of money, securities, chattels, other assets and property rights; restrictions on payments to internationally sanctioned entities; and other restrictions on financial activities.

Natural and legal persons who, in accordance with the requirements of the legislation on international sanctions, have restricted the disposal of funds or economic resources of entities, or who have received information on funds and economic resources that should have been frozen by natural and legal persons obliged to do so, shall inform the Financial Crimes Investigation Service thereof within 2 working days.¹The information shall be sent to [email protected]

Legal persons and other organisations without legal personality shall inform the Financial Crimes Investigation Service of the fact that their owners or participants are entities subject to financial sanctions, as well as of the fact that a legal person or other organisation without legal personality is managed or controlled by entities subject to financial sanctions, within 2 working days from the date of becoming aware of such information.

For more information on the competent authorities in Lithuania visit https://www.urm.lt/sankcijos 

Article 8 of the Law on International Sanctions establishes the institution of a provisional administrator who is responsible for the management of the assets of the sanctioned entity.

A provisional administrator shall be appointed by a decision of the Minister of Finance in cases where international sanctions are being implemented in the Republic of Lithuania in respect of the legal entity, its owner or the person controlling it, and where provisional administration is necessary in order to avoid adverse social, economic, ecological or other significant consequences for society or the State and to ensure compliance with the requirements set out in Article 4 of the Law on International Sanctions.

In order to assess whether international sanctions implemented in the Republic of Lithuania against a particular entity are likely to cause negative social, economic, ecological or other significant consequences for society or the state, the following criteria shall be taken into account, inter alia, i.e. whether:

• the sanctioned legal entity is a large enterprise as defined in Article 4(4) of the Republic of Lithuania Law on Financial Reporting by Undertakings;
• sanctioned legal person has an average annual number of employees of more than 500;
•  suspension of the sanctioned legal entity could cause damage to the environment;
•  sanctioned legal person carries out waste recovery or disposal activities;
• sanctioned person carries out activities at a hazardous facility where the quantities of hazardous substances which are actually present or are believed to be present or could reasonably be foreseen to occur if the processes, including storage activities, at any device of the hazardous facility were to become uncontrolled, comply with the qualifying quantities, or exceed them, referred to in Table 1 “Categories of dangerous substances” or Table 2 “List of dangerous substances” of the Description of the list of dangerous substances and mixtures, the determination of their qualifying quantities and the criteria for classifying chemical substances and mixtures as dangerous substances, approved by Resolution No 966 of the Government of the Republic of Lithuania of 17 August 2004 “On the Approval of the Provisions of the Prevention, Liquidation and Investigation of Industrial Accidents and of the List and the Description of Qualification Criteria for the Substances, Mixtures or Preparations Classified as Dangerous Substances in Dangerous Objects”;
• value of frozen funds and/or economic resources is 10 million EUR or more.

The terms and conditions of the interim administrator shall be laid down in the interim administration agreement concluded between the Ministry of Finance and the interim administrator. The Minister of Finance shall determine the duration of the appointment of the interim administrator, the powers, functions and actions that the interim administrator may perform only with the prior approval of the Ministry of Finance, i.e. the interim administrator shall coordinate with the Ministry of Finance in the performance of its functions.

The interim administrator shall be appointed for a period not exceeding one year. In exceptional cases, the appointment of the interim administrator may be extended by decision of the Minister of Finance.

The decision on the disposal of frozen economic resources shall be taken by the interim administrator. In such a case, no further decision of the Financial Crimes Investigation Service on exemptions or authorisations from the restrictions and obligations laid down in the international sanctions legislation is required. The funds resulting from the realisation of economic resources shall be held in a deposit account of a financial institution of the Republic of Lithuania.

The Bank of Lithuania shall have the right to appoint a temporary administrator for a financial market participant licensed or otherwise authorised and supervised by the Bank of Lithuania as referred to in Article 42 of the Law on the Bank of Lithuania, when international sanctions are implemented in the Republic of Lithuania in respect of this financial market participant, its owner or the person controlling it, as well as in the case of the existence of the other conditions referred to in Article 8, Paragraph 1 of the Law on International Sanctions.