On 17 July 2014 the Lithuanian Parliament passed the Law on Lithuanian Currency Exchange Operators. The new Law, which was sent for signature to the President, should come into effect on 1 November 2014.
Liberalisation of Currency Exchange Activities
The new Law liberalizes currency exchange activities in Lithuania. Under the new Law, in addition to credit institutions the following legal entities will be allowed to engage in currency exchange in cash in Lithuania:
- Lithuanian legal entities;
- legal entities or other organisations from a foreign country that have established a structural unit (branch) in Lithuania;
- financial institutions controlled by credit institutions of a Member State of the European Economic Area that have established a structural unit (branch) in Lithuania or that provide currency exchange services in Lithuania without establishing a branch.
All legal entities that wish to engage in currency exchange services in Lithuania must be included in a special list of currency exchange operators administered by the Bank of Lithuania as the Lithuanian supervisory authority.
While providing currency exchange services, legal entities will be allowed to continue activities or to engage in new activities that are not held to be provision of financial services.
Requirements for Currency Exchange Operators
Except for financial institutions controlled by credit institutions of a Member State of the European Economic Area, the legal entities listed above are required to file the following data with the Bank of Lithuania for inclusion in the list of currency exchange operators:
- information about the legal entity (name, place of establishment, legal code if applicable) or extract from the legal entity register providing information about the legal entity if it is established in a foreign country;
- information about members of a legal person holding part of the qualifying share capital and (or) voting rights;
- information about the general manager of a legal person;
- description of the internal control system to be installed to comply with the requirements set in Lithuanian anti-money laundering and terrorist financing legislation.
The new Law does not establish any capital requirements or similar financial ratios for legal entities to engage in currency exchange services.
Note that some aspects are still left to be regulated by resolutions of the Bank of Lithuania. Under the new Law, the Bank of Lithuania has to adopt implementing regulations no later than 30 September 2014. These implementing regulations should determine, eg, organizational requirements such as security of clients and employees, custody and administration of cash money, supervision of cash money quality and forgery of banknotes and coins.