The Bank of Lithuania has revoked the licence of the electronic money institution UAB PAYRNET for serious, systematic, and multiple violations of legal acts. This implies the organisation can no longer provide financial services and must return the cash to its consumers within the time frame specified.

The Bank of Lithuania wants to petition the court for the institution's bankruptcy to be initiated, as well as to law enforcement agencies. The Bank of Lithuania determined that the institution breached the Republic of Lithuania's Law on Electronic Money and Electronic Money Institutions, the Law on Money Laundering and Terrorist Financing, and the Law on Payments. The Bank of Lithuania also found a number of other especially significant infractions linked to money laundering and terrorist funding prevention, as well as the execution of international penalties and restrictive measures.

Clients’ access to their funds Furthermore, the Bank of Lithuania limited UAB PAYRNET's ability to dispose of cash allotted to its activities with particular restrictions. According to information supplied to the Bank of Lithuania, the institution is aware of the whole amount of its current liabilities to customers, and client money is secured in separate dedicated accounts. Because these funds will not be limited, clients who have funds in this institution's accounts must ask for a return directly to UAB PAYRNET.

Within five working days, the institution shall notify clients of the appropriate settlement procedure. The finances must be restored to a client's account with a credit or other electronic money or payment institution. Failing to comply with identification requirements The evaluation of the institution's clients' money laundering and terrorist funding risk was poor, and in some circumstances not undertaken at all.

The internal control mechanisms for client due diligence were seriously flawed. UAB PAYRNET failed to maintain an acceptable internal control system in the field of money laundering and terrorist funding prevention, including the assignment of functions and steps to manage conflicts of interest. The institution did not keep important information that might be recovered if needed, and its information technology system did not assure effective data collection, processing, and usage.

The employees in charge of controlling the risks of money laundering and terrorist funding did not always have access to information about client and beneficiary identity, monetary transactions, and activities. UAB PAYRNET did not have complete information on the number of customers (end users) that used its services: it did not manage data on end-user payment transactions and was unable to identify the precise quantity of end-user cash. The background After analysing the institution's financial status, the Bank of Lithuania determined that the obligations currently held by the institution surpassed its assets, resulting in insolvency, with little indication that the situation will improve very soon.

It is worth noting that in 2022, the institution paid for expenses incurred by other companies in the group of companies to which UAB PAYRNET belongs, resulting in an irrecoverable amount of more than EUR 7 million, which had a significant negative impact on the institution's financial position. The Bank of Lithuania wants to file a request with law enforcement authorities to determine whether criminal offences have been committed.The Bank of Lithuania curtailed UAB PAYRNET's activities in February 2023, and in March it appointed a temporary representative to oversee the institution's operations. .