We’ve been writing it here on FinTelegram since 2019 – GlobalNetInt has a problem with money laundering and customers acting illegally. The Lithuanian-Israeli e-Money Institution GlobalNetInt (GNI), part of the FCA-regulated MoneyNetint Group, was penalized by the Bank of Lithuania for its violations of anti-money laundering and terrorist activities financing rules. GNI has to pay €350,000 because it did not properly assess the risk posed by customers and did not always ensure that customer identification remotely complied with legal requirements.
GNI focuses on high-risk clients but does not rely on reliable and independent sources when verifying the documents and information on beneficiary owners. Yes, sure, we know that GNI accepted scam operators and illegal businesses and intentionally neglected respective information. Given these findings, the €350,000 fine is a terrible joke.
Improper AML/KYC and customer fund protection procedures
GNI did not have adequate procedures to determine whether the client and beneficiary are politically vulnerable (affected) individuals, the Bank of Lithuania says. The regulator’s audit revealed that the internal control procedures implemented by GNI did not ensure the proper implementation of the requirements of international financial sanctions and restrictive measures in all cases. Evidently, GNI violated the Law on Electronic Money and Electronic Money Institutions by not protecting its customers’ funds properly.
Violating capital requirements
It was also found that the GNI, at least at certain times in 2020, did not meet the capital requirement, which must be complied with on an ongoing basis. Its reports to the Bank of Lithuania provided false information on the accounts in which it kept customer funds and own funds.
High-risk business temporarily restricted
The regulator imposed a fine of €350,000 on GNI and, pending the elimination of violations, GNI is not allowed to establish business relationships with high-risk clients. In addition, GNI has temporarily lost the right to issue electronic money and provide payment services to customers in certain territories.
The Bank of Lithuania obliged GNI to eliminate the violations of legal acts and operational deficiencies.
Stay tuned for our analysis
We have been following GNI‘s activities for almost two years and are not at all surprised that the Bank of Lithuania has discovered AML/KYC violations. However, we are surprised by the mild fine GNI received. €350,000 is chump change for MoneyNetint Group and GNI. It is also interesting in this context that Findiban, the payment venture of GNI CEO Liudvikas Kulikauskas and his wife Egle Kulikauskiene, is still not online. We will also report on this in our detailed analysis. Stay tuned.
