AML Violations Cost Lithuanian Payments Firm PayRNet License

The Bank of Lithuania has revoked the license of UAB PayRNet, a former subsidiary of embedded banking platform Railsr, over “serious violations” of anti-money laundering (AML) and payments laws.

PayRNet was one of Lithuania’s largest electronic money and payment institutions, with €7.5 billion in turnover last year. The firm provided payment processing services to a variety of businesses, including e-commerce merchants, financial institutions, and gaming companies.

The investigation into PayRNet’s AML compliance was launched in February 2023 after the central bank received concerns about the firm’s practices. The investigation found that PayRNet had “gross, systematic and multiple violations” of AML laws, including:

Failing to adequately identify customers, including failing to collect and verify customer identification information.

Failing to monitor transactions for suspicious activity.

Failing to have an adequate internal control system in place to prevent money laundering and terrorist financing.

As a result of the investigation, the Bank of Lithuania has ordered PayRNet to return funds to clients and has initiated bankruptcy proceedings against the firm. The revocation of PayRNet’s license is a major blow to the Lithuanian payments sector and highlights the importance of AML compliance.

The AML laws in Lithuania are some of the strictest in the world, and the Bank of Lithuania has a zero-tolerance policy for AML violations. The revocation of PayRNet’s license is a clear message to other payments firms in Lithuania that they must comply with AML laws or face serious consequences.

The revocation of PayRNet’s license is also a reminder of the importance of AML compliance for businesses of all sizes. AML violations can have serious consequences for businesses, including fines, sanctions, and even criminal prosecution. Businesses that fail to comply with AML laws are putting themselves at risk of serious financial and reputational damage.