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Supervision of financial markets: the dispute in the case concerned the validity and lawfulness of the resolution of the Bank of Lithuania, which revoked the applicant's payment institution licence for breaches of the Law on Prevention of Money Laundering and Terrorist Financing, the Law on Electronic Money and Electronic Money Institutions and the Law on Payment Institutions.

On 19 June 2024, the Supreme Administrative Court of Lithuania (SACL) adopted a ruling in which it examined the dispute between the applicant UAB ABC Projektai and the respondent Bank of Lithuania. After examining the case, SACL partially upheld the applicant's complaint and annulled point 8 of the Resolution and replaced the measure of sanction imposed by the Resolution, namely the revocation of the validity of the payment institution's licence, by the suspension of the validity of the payment institution's licence until 1 July 2024.

On 19 October 2022, The Supreme Administrative Court of Lithuania found that the Bank of Lithuania had infringed point 8 of the Resolution. "In circumstances such as those in the main proceedings, where a payment institution accepts funds without a specific payment order to transfer them on the same or the next working day and the funds remain in the payment institution's account for payment transactions for a period longer than the time-limit for the performance of the payment service as defined by the legislation, are the acts of the payment institution to be considered as: (a) part of a payment service or a payment transaction, as defined in Article 4(3) and (5) of Directive 2015/2366, carried out by the payment institution; or (b) an authorisation of electronic money, as defined in Article 2(2) of Directive 2009/110? ".

In its preliminary ruling of 22 February 2024 (Case C-661/22), the CJEU ruled that Article 4(3) of Directive 2015/2366 and Article 2(2) of Directive 2009/110 are to be interpreted as meaning that the activity of a payment institution consisting of the receipt of funds from a consumer of a payment service, without those funds being immediately accompanied by a payment order, and therefore remaining in the payment account, as defined in Article 4(12) of Directive 2015/2366, which is processed by that institution, constitutes a payment service provided by that payment institution within the meaning of point (3) of Article 4 of Directive 2015/2366 and not an electronic money issuance transaction within the meaning of point (2) of Article 2 of Directive 2009/110.

Having examined the case file and the parties' procedural documents, SACL rejected the applicant's arguments regarding the established infringements of the Law on Prevention of Money Laundering and Terrorist Financing (points 1-7 of the ruling) and the Law on Payment Institutions (points 9-10 of the ruling). However, the Supreme Administrative Court of Lithuania annulled point 8 of the Decision in the light of the above-mentioned preliminary ruling of the CJEU. SACL concluded that in that judgment the CJEU refuted the conclusion in point 8 of the ruling that the applicant, not being an issuer of electronic money, issued electronic money and therefore infringed the requirements of Article 5 of the Law on Electronic Money and Electronic Money Institutions, as well as provided false information in order to obtain a payment institution licence. According to SACL, this means that the Bank of Lithuania misapplied the Law on Electronic Money and Electronic Money Institutions and unreasonably assessed the applicant's actions as a violation of this legal act, whereas the applicant had a licence to provide payment services.

When deciding on the measure of the Bank of Lithuania's decision, the Supreme Administrative Court of Lithuania emphasised that the most severe measure of the sanction imposed on the applicant was the revocation of the licence of the payment institution. Taking into account the fact that point 8 of the Resolution was repealed and taking into account the legal regulation relevant to the dispute and the case law on the proportionality of the measures applicable to legal persons, the Supreme Administrative Court of Lithuania concluded that the objectives of the Bank of Lithuania's supervision of the activities of financial institutions and the measures provided for in the legislation would be achieved by the applicant's temporary suspension of the licence until 1 July 2024.

Administrative case No eA-201-552/2024.