FCIS: reports of suspicious transactions have increased almost 24 times in the last year
In 2021, experts from the Money Laundering Prevention Unit of the Financial Crime Investigation Service (FNTT) recorded a record increase in the number of reports of suspicious monetary operations or transactions. The number of such reports has increased almost 24 times compared to 2020. The majority of these reports - almost 96% - were reports on suspicious monetary transactions or transactions received from electronic money and payment institutions. The amount of funds suspended as a result of the reports received also increased over the past year.
The number of the reports sent by virtual currency exchange operators and depository virtual currency wallet operators increased by slightly more than 1.2 times compared to 2020. The AML practitioners are seeing an increase in this sector.
"A number of companies have been set up in Lithuania to deal with the activities of virtual currency exchange operators and depositary virtual currency wallets and interest is only growing. There is an active interest in business opportunities and conditions from foreign companies seeking to establish themselves in the Lithuanian market. The growth of this sector poses certain risks", says Mindaugas Petrauskas, Deputy Director of the FCIS.
According to Mr. Petrauskas, many of the founders of virtual currency operators are foreign nationals. Technological solutions are needed to identify the recipients of virtual currencies, and the complexity of tracing the funds creates risks of possible money laundering. Therefore, supervision of this sector requires additional capacity and resources.
The growth observed last year
The number of the reports received from businesses providing cash remittances has almost doubled in the past year compared to 2020. The number of the reports sent to the FCIS by other obliged entities increased by a little more than 1.3 times. Compared to 2020, the number of the suspicious monetary operations or transactions reports sent by foreign financial intelligence units increased by 1.6 times.
The amount of funds suspended as a result of the reports from the Lithuanian financial institutions and other obliged entities increased compared to 2020. In 2021, the number of suspensions increased 1.6 times, amounting to over €65 million. The number of the requests to suspend monetary transactions from the FCIS units conducting pre-trial investigations, foreign financial intelligence units and the Lithuanian Police increased almost 2.4 times.
Anti-money laundering specialists, after receiving reports of suspicious monetary operations or transactions, forward the collected information to other authorities for further investigation. In 2021, compared to 2020, the highest amount of information was forwarded to the Lithuanian Police, almost 1.3 times more. According to the experts' assessment, most of this information was related to possible cases of investment fraud, cyber fraud or telephone fraud.
Supervision and enquiries
During 2021, the staff of the Regional Boards of the FCIS and the Supervision Division inspected the compliance of the obliged entities with the provisions of the Law on the Prevention of Money Laundering and Terrorist Financing (AML/CFT). During the past year, 46 legal entities were audited. 36 cases were referred to the FCIS Commission for the Examination of Violations of the Law on the Prevention of Money Laundering and Terrorist Financing for various breaches of the ML/TF Law. The Commission examined and adopted decisions on 23 cases: 3 warnings were issued and one legal person was issued the instruction with a warning. 17 legal persons were fined, including one with the issued instruction. In total, fines amounting to almost €130,000 were imposed.
In 2020, officials inspected 23 entities, detected infringements in 4 companies and issued administrative offence reports to their managers and responsible persons under Article 198 of the ANC. In all cases, convictions were handed down and fines totalling €7.3 thousand were imposed.
In 2021, the Money Laundering Prevention Department of the FCIS received 886 enquiries/requests from the FCIS units, law enforcement units, the Legal and Licensing Department of the Bank of Lithuania and others. 892 such requests were received in 2020 from the Lithuanian authorities and institutions requesting to provide available information, to stop monetary operations, to mediate with requests sent to foreign financial intelligence units.
Last year, 1066 requests were received from foreign financial intelligence units to provide information not only on the Lithuanian entities and accounts, but also on foreign entities, requests to stop monetary operations in the Lithuanian financial institutions, etc. 816 such requests were received in 2020.