The Recommendations for entities organizing games on prevention of money laundering

APPROVED

by Resolution No. N-196 of 30 September 2005

of the State Gaming Control Commission

RECOMMENDATIONS FOR ENTITIES ORGANIZING GAMES ON PREVENTION OF MONEY LAUNDERING

I.                   GENERAL PROVISIONS

1.              The Recommendations for entities organizing games on prevention of money laundering (further – the Recommendations) establish the procedure for the implementation of the requirements of the legal acts governing the money laundering prevention.

2.              The Recommendations shall apply to entities organizing games.

3.              The concept “foreign State” used for the purpose of the present Recommendations means a non-EU Member State or a State outside the European Economic Area.

4.              The provisions of the present Recommendations shall not apply where the monetary operations are performed and (or) transactions are concluded with State or municipal institutions, other budgetary organisations, the Bank of Lithuania, State and municipal foundations, diplomatic representative offices and consular offices of other Member States of the European Union and other foreign States.

5.              The concepts used for the purpose of the present Recommendations shall have the same meaning as defined in the Law on Prevention of Money Laundering (Official Gazette, 1997, No. 64-1502; 2003, No. 117-5318), and the Gaming Law of the Republic of Lithuania (Official Gazette, 2001, No. 43-1495).

II. LEGAL ACTS GOVERNING MONEY LAUNDERING PREVENTION MEASURES AND ISSUES OF LIABILITY FOR THE VIOLATION OF LEGAL ACTS

6.              In the Republic of Lithuania issues related to the prevention of money laundering shall be governed by:

6.1.        the Law on Prevention of Money Laundering of the Republic of Lithuania;

6.2.        The Code of Administrative Violations of Law (Official Gazette, 1985, No. 1-1);

6.3.        The Penal Code of the Republic of Lithuania (Official Gazette, 2000, Nr. 89-2741);

6.4.         Resolution No. 1331 of 3 December 1997 of the Government of the Republic of Lithuania “On the identification of the customer and several related monetary operations, the procedure for the submission of information on monetary operations and transactions, and the procedure for the control of cash brought into and taken out of the Republic of Lithuania” (Official Gazette, 1997, No. 112-2840; 2002, No. 89-3801; 2004, No. 115-4303; 2004, No. 171-6337).

6.5.        Resolution No. 1409 of 6 September 2002 of the Government of the Republic of Lithuania “On the rules of management of the register of monetary operations and transactions performed by the customers” (Official Gazette, 2002, No. 89-3800; 2004, No. 115-4304);

6.6.        Resolution No. 1411 of 6 September 2002 of the Government of the Republic of Lithuania “On the approval of the list of criteria for deeming a monetary operation or a transaction suspicious” (Official Gazette, 2002, No. 89-3802; 2004; No. 115-4302).

6.7.        Resolution No. 1441 of 5 November 2004 of the Government “On the approval of the rules for suspension of suspicious monetary operations and the submission of information to the Financial Crime Investigation Service under the Ministry of Finance” (Official Gazette, 2004, No. 167-6127).

III. IDENTIFICATION OF THE CUSTOMER

7. Employees of entities organizing games need to know the identity of their customer (natural or legal person).

8. Employees of entities organizing games shall establish the identity of the customer or his representative.

8.1. were the amount of a one-off monetary operation or a transaction exceeds LTL 50,000 or an equivalent in a foreign currency;

8.2. where the customer exchanges the cash into chips or pays in or wins and amount in excess of LTL 3,500 or an equivalent in a foreign currency;

9. The monetary operations may include various operations in cash, e.g., acquisition of chips, collection of the gain, increase of the authorized capital by monetary contributions, covering of a company’s losses by monetary contributions of shareholders, loan by a shareholder to the company and other payments or receipt of cash on the basis of civil transactions or other basis.

10. Where at the time of performing the monetary operation the final amount of the operation is not known, the employees of the entity organizing games shall establish the identity of the customer immediately after it is determined that the amount of the monetary operation exceeds the amounts specified in item 8.1 or 8.2.

11. In cases referred to in the present Recommendations the employees of entities organizing games shall request that the customer produce valid identification documents, specifying:

11.1. data of natural persons:

11.1.1. name, last name;

11.1.2. personal code (applied to citizens of the Republic of Lithuania, and persons holding permits for permanent residence in the Republic of Lithuania);

11.1.3. date of birth, number and term of validity of the permit for temporary residence in the Republic of Lithuania (applicable to persons holding a permit for temporary residence in the Republic of Lithuania);

11.1.4. date of birth, number, date and venue of issuance of the passport or an equivalent travel document (applied to citizens of foreign States);

11.1.5. date of birth, number, term of validity, date and venue of issuance of the permit for permanent residence in a foreign State (applied to foreigners permanently residing in foreign States);

 11.2. data of legal persons, – name, registered office, code, number and the date of issue of the registration certificate;

11.3. data required under items 11.1 or 11.2. of the present Recommendations of the agent the agent proxy statement (number, date of execution), in case the customer effects transactions and performs monetary operations through an agent;

12. Entities organizing games shall establish the documents to be submitted by the customer to confirm his identity. In their internal regulations entities organizing games shall establish that only original documents may be submitted containing a personal picture and (or) appropriate registration number and that cannot readily be copied or forged (passport, personal identification card, drivers’ license, a permit for residence in the Republic of Lithuania, another Member State of the European Union or a foreign State, notarised copies of the documents, etc.).

13. Employees of entities organizing games shall pay particular attention to:

13.1. personal identification documents presented by Stateless persons and foreigners;

13.2. customers from the States included by FATF’s (Financial Actions Task Force) into the list of non-cooperating countries and territories and monetary operations performed on their behalf;

13.3. whether or not the customer of the entity organizing games is included into the list of terrorism-related persons compiled by the United Nations Security Council;

13.4. whether or not the customer of the entity organizing games is included into consolidated list of persons, their groups and entities and institutions subject to pecuniary sanctions of the European Union;

14. Employees of entities organizing games shall identify the customer prior to concluding the agreement therewith or executing a monetary operation: having learned the amount of the monetary operation or the value of the transaction and established that the amount exceeds the threshold value defined in the law, the employee of the entity organizing games shall require that the customer produce documents proving his identity. Such documents shall be also required in cases the employees of entities organizing games become suspicious about the identity of the customer, the legality of the monetary operation and in other cases.

15. Employees of entities organizing games shall be prohibited from performing the monetary operations in case the customer fails, in cases stipulated by the law, to produce documents proving his identity, or produces incomplete or knowingly incorrect data. In case of any doubt concerning the authenticity of the data or the documents the employees of the entity organizing games shall contact the internal division or the official in charge of the implementation of the money laundering prevention measures and discuss the further possible actions.

IV. MAINTENANCE OF REGISTERS

16. An employee of the entity organizing games appointed by the head of the entity in charge of the maintenance of the registers and the submission of information to the Financial Crimes Investigation Service shall maintain the register of:

16.1. customer’s monetary operations where the amount of a one-off monetary payment or receipt exceeds LTL 50,000 or their equivalent amount in foreign currency;

16.2. persons who either exchange the chips into cash, or pay or win an amount in excess of LTL 3,500 or an equivalent amount in a foreign currency;

16.3. suspicious operations identified as such in accordance with the requirements of the Resolution No. 1411 of 6 September 2002 of the Government of the Republic of Lithuania.

17. Data to be entered by the person in charge of the maintenance of the register and the submission of information to the Financial Crime Investigation Service shall be entered without delay but in any case not later than within 7 business days following the performance of the monetary operations, and in case of a suspicious operation – not later than the date of recognition of the operation as suspicious. Data shall be entered into the register in a chronological sequence. The data entered into the register shall correspond to the data contained in the documents confirming the operation by the customer concerned or other legally valid documents related to the monetary operation.

18. The register shall store the data on:

18.1. the identity of the customer (natural or legal person) or the customer’s agent in case the operation is performed through the agent (data specified in item 11 of the Recommendations attesting the customer’s or the agent’s identity):

18.2. monetary operation;

18.2.1. date of the monetary operation;

18.2.2. amount of the monetary operation;

18.2.3. currency of the monetary operation;

18.2.4. criteria on the basis of which the operation is considered suspicious.

19. The data stored in the register of the entity organizing games shall not be disclosed publicly. The person in charge of the maintenance of the register shall have a right to communicate the data of the register exclusively to the head of the entity organizing games where he is employed or a person authorised thereby, the Financial Crime Investigation Service and other institutions designated by laws of the Republic of Lithuania. The head of the entity organizing games shall guarantee that the data of the register shall be protected from an unauthorised destruction, modification or use.

V. IDENTIFICATION OF SUSPICIOUS  MONETARY OPERATIONS, SUSPENSION OF SUCH OPERATIONS, AND NOTIFICATION OF THE FINANCIAL CRIME INVESTIGATION SERVICE

20. Entities organizing games shall notify the Financial Crime Investigation Service of the following:

20.1. suspicious monetary operations of the customer possibly related to money laundering;

20.2. one-off monetary operations of the customer where the amount whereof is in excess of LTL 50,000 or their equivalent in foreign currency;

21. The entity organizing games shall establish whether a monetary operation conducted by the customer comply with the criteria defined in the relevant Resolution of the Government of Lithuania on the basis of which the operation is deemed suspicious, and (or) the relative characteristics of the criteria defined by the entity organizing games on the basis of which the operation is considered suspicious.

22. The entities organizing games, in coordination with the Financial Crime Investigation Service shall establish the relative characteristics of the criteria on the basis of which the monetary operation is considered suspicious, such as, what is deemed a usual cooperation by the customer, the frequency of the operation to consider is unusually frequent, actions demonstrating an unusual behaviour of the customer, etc.

23. In case a monetary operation complies with at least one criterion defined in the relevant Resolution of the Government of the Republic of Lithuania and (or) the conditional characteristics of the criteria defined by the entity organizing games, the entity shall:

23.1. having established that the monetary operation is suspicious, suspend the suspicious monetary operation of the customer;

23.2. transmit in writing or by technical means of text communication the customer’s identity data, and the monetary information to the Financial Crime Investigation Service without delay, but in any case not later than within 3 business hours from the suspension of the operation. In particularly urgent instances entities organizing games may inform the Financial Crime Investigation Service verbally (by telephone) with the written confirmation to that effect following immediately. Entities organizing games shall establish the form of the communication on the suspicious monetary operation upon approval thereof by the Financial Crime Investigation Service.

24. In case within 48 hours form the submission of the notification the entity organizing games does not receive any instructions from the Financial Crime Investigation Service the monetary operation shall be resumed. In the event the suspension of the monetary operation may interfere with the investigation of the legalisation of the illegally acquired funds or property or other criminal actions related to money laundering, upon receipt from the Financial Crime Investigation Service of a written instruction to refrain from suspending the suspicious monetary operation performed by the customer the entity organizing games shall not suspend the operation from the moment indicated therein. The entity organizing games or its staff members shall not be held liable in respect of the customer for the default on contractual obligations or damage incurred due to the suspension of the monetary operation.

25. Entities organizing games shall define the internal procedure governing the suspension of suspicious monetary operations. 

26. Entities organizing games shall also have a right to notify the Financial Crime Investigation Service of the monetary operations that do not comply with a single criteria defined in the relevant Resolution of the Government of the Republic of Lithuania, but nevertheless seem suspicious to the employee of the entity organizing games. The suspicion may be raised by certain objective and subjective circumstances, such as the customer performing monetary operations not typical for its activity, a customer is a frequent gambler and wins or looses per day over LTL 5,000, submits erroneous personal data, or splits the monetary operation into several operations so than not a single operation reaches the amount making the operation obligatory to be included into the register of monetary operations, etc.

27. Having established that the amount of the monetary operation is in excess of the amount specified in item 20.2, the customer’s identity shall be established and the employee in charge of the maintenance of the register and the submission of information to the Financial Crime Investigation Service shall communicate the customer’s identity data and the information on the performed monetary operation to the Financial Crime Investigation Service.

28. The employee of the entity organizing games in charge of the information shall submit such information to the Financial Crime Investigation Service having completed an appropriate form in computer files. The entities organizing games shall coordinate the form of the communication with the Financial Crime Investigation Service.

29. Such information shall be submitted to the Financial Crime Investigation Service not later than within 7 working days after the performance of the monetary operation.

30. The employees of the entity organizing games shall be prohibited from informing the customer or other persons that the information on the monetary operations performed by such customers has been communicated to the Financial Crime Investigation Service. Also neither the entity organizing games nor its staff members are allowed to take actions enabling the customer to understand that the Financial Crime Investigation Service has been informed about the monetary operations performed thereby.

31. The submission of information defined in the Law on Prevention of Money Laundering to the Financial Crime Investigation Service shall not constitute the disclosure of the industrial, commercial or bank secret. The employees of the entity organizing games, having communicated the information specified in the Law to the Financial Crime Investigation Service shall not be held liable for the disclosure of the industrial, commercial or other secret, even in case where, upon the verification of the information it is established that the customer is not involved in criminal activities.

32. The notifications by the entity organizing games to the Financial Crime Investigation Service shall not identify the person who has notified of the suspicious operations. Only the information specified in the Law shall be submitted in addition to the indication of the entity organizing games and its internal division or the employee responsible for the enforcement of the said Law. The Financial Crime Investigation Service may obtain more detailed information from the entity organizing games or the responsible person of the entity, and not from the employee who has notified the suspicious monetary operation.

33. Having established that certain data are missing in the notification on the monetary operations or the concluded transactions concluded by the customer to the Financial Crime Investigation Service or the data are inaccurate or the notification does not comply with the established form, the employee of the entity organizing games and responsible for the maintenance of the registers and the submission of information to the Financial Crime Investigation Service shall eliminate the shortcomings and without delay, in any case not later than within 3 working days, submit the information repeatedly to the Financial Crime Investigation Service.

VI. PRESERVATION OF THE INFORMATION

34. Entities organizing games shall store the documents attesting the monetary operations or transactions or other legally valid documents related to the monetary operations or transactions for a period not shorter that 10 years from the date of execution of the monetary operation or the transaction.

35. Entities organizing games shall maintain the documents identifying the customers for a period not shorter than 10 years from the termination of relations with the customer.

36. Data of the register shall be maintained for a period not shorter than 10 years from the termination of relations with the customer.

37. Entities organizing games shall establish the procedure for the storage of the documents, copies of the documents and the data able to ensure the compliance with the requirements stipulated in the present Recommendations.

38. Heads of entities organizing games shall ensure that the data, documents, copies of documents and data of the register obtained in cases defined in the present Recommendations are protected from the unauthorised destruction, modification and the use.

VII. INTERNAL PROCEDURES OF THE ENTITY ORGANIZING GAMES  RELATED TO THE IMPLEMENTATION OF THE MONEY LAUNDERING PREVENTION MEASURES

39. In their activities entities organizing games shall comply with the provisions of the Law on Prevention of Money Laundering of the Republic of Lithuania, resolutions of the Government of the Republic of Lithuania the present Recommendations and other legal acts and shall fulfil the requirements stipulated therein.

40. Entities organizing games shall establish internal control procedures to prevent monetary operations related to money laundering.

41. Entities organizing games shall appoint a staff member in charge of the maintenance of the register, suspension of suspicious monetary operations, introduction and enforcement of specific money laundering prevention measures stipulated in the Law on the Prevention of Money Laundering and liaison with the Financial Crime Investigation Service. The entity organizing games shall in writing inform the Financial Crime Investigation Service of the persons appointed to fulfil the said duties.

42. Head of the entity organizing games shall:

42.1. be familiar and make the staff members familiar with the legal acts governing the issues related to the money laundering prevention and liability for the failure to implement the money laundering prevention measures;

42.2. organize the appropriate training of the staff members of the entity organizing games (course, workshops, traineeships, etc.) ranging from the heads of the institution to the front-office staff members in order to ensure the enforcement of the money laundering prevention measures in the entities organizing games;

42.3. establish, upon coordination with the Financial Crime Investigation Service, the procedure for the completing and administration of the register of the entity organizing games.