ABC Projektai, formerly known as “Bruc Bond UAB”, has achieved a significant legal victory in its proceedings vs the Bank of Lithuania (BoL). The Supreme Administrative Court of Lithuania (SACL) has accepted the company’s appeal, leading to the immediate return of its payment institution licence today (1st July 2024).
- ABC Projektai’s (formerly Bruc Bond UAB) licence appeal accepted by Supreme Administrative Court of Lithuania
- ABC Projektai supported by many EU Member States, and The Advocate General of the CJEU
- Unprecedented decision changes penalty from permanent revocation to immediate return of licence today (1st July).
In a detailed judgment, the court recognised ABC Projektai’s proactive measures and commitment to compliance. Notably, the court made an unprecedented decision to change the penalty from a permanent revocation of the licence to full return of its license.
The court, aligning with the findings of the Court of Justice of the European Union (CJEU), determined that the main allegation against ABC Projektai regarding exceeding the boundaries of its payment institution licence was invalid.
The spokesperson for ABC Projektai stated: “This complete vindication is a significant relief as it validates our operational practices and unfailing commitment to compliance with regulatory standards. We welcome this decision and remain committed to maintaining the highest standards of compliance and operational integrity. We look forward to continuing to serve our clients with the utmost dedication and professionalism.
Oddly, we are proud that the Lithuanian central bank admitted in Court that nothing in the company’s activity caused negative consequences for the customers or other financial institutions, and there were no aggravating circumstances.
We are especially grateful to all our clients who placed indomitable faith in the integrity of our management and quality of our services despite the misdirected publicity.
We would not be the stronger, more capable team we are today without our clients.”
The initial penalty of permanent revocation was found by the Court to be excessively harsh and disproportionate given the circumstances. In the opinion of ABC Projektai spokesperson, an unfortunate and inevitable consequence of the time taken to reach the verdict has the effect of a temporary license suspension for nearly 4 plus years, which is outside the guidelines of the Central Bank.
The spokesperson shared: “We are happy that the SACL wasted no time in ordering return of our license and, in addition, ordered payment of legal costs to us. We take comfort that the Court appreciated the disproportionate damage inflicted on our Company for the past 4 plus years.”
Additionally, the court acknowledged that ABC Projektai took substantial steps to correct the identified violations before the Central Bank decision was rendered. This proactive approach was seen as a mitigating factor, underscoring the company’s commitment to regulatory compliance and its efforts to rectify any issues promptly.
The court also confirmed that there was no evidence of intentional wrongdoing by ABC Projektai.
ABC Projektai’s legal representative from the Lithuanian law firm MOTIEKA, Mr. Justinas Jarusevicius, stated: “I appreciate conclusions of the Supreme Administrative Court of Lithuania that condemned revocation of ABC Projektai license. I am extremely confident that the professional management at ABC Projektai will do all they can to continue their strong contributions to doing business the right way.”
Throughout the proceedings, ABC Projektai received support from other EU Member States, including Germany, Poland, and the Czech Republic as well as the European Commission. The Advocate General of the CJEU also issued a favourable opinion, leading to the final rulings from both the CJEU and the Supreme Administrative Court of Lithuania.
ABC Projektai was among the first wave of fintechs granted an electronic payment institution licence by the BoL in the year 2016 and operated in Lithuania until April 2020.
In April 2020, the Bank of Lithuania revoked ABC Projektai’s (formerly Bruc Bond UAB) licence, alleging that the company issued electronic money without the status of an Electronic Money Institution (EMI). The Bank contended that the company held customer funds longer than necessary for payment transactions, which it viewed as unauthorised e-money issuance. Although ABC Projektai did not dispute the extended holding of funds, it informed customers to provide payment instructions or refunded the funds in the absence of such instructions.
