1. After a past shock that led to a reduction in transnational banking transactions, Lithuania’s financial sector has readjusted to serving non-residents, posing higher money laundering risk, mostly through Fintech companies.2 The non-resident activity in Lithuania has decreased significantly following the financial integrity breaches at Snoras and Ukio banks that lost their licenses in 2011 and 2013, respectively, with involvement of the latter in the “laundromat” operations where Lithuania was used as a transit point for suspicious transactions allegedly linked to foreign criminal activity.3, 4 Subsequently, the BoL focused its monitoring on daily non-resident deposits and transactions in Lithuanian banks. Due to the recent growth of the fintech hub, Lithuania’s financial sector’s focus shifted away from bank-centric focus on servicing domestic market to facilitation of cross-border payments, with most transactions conducted by non-residents with origination and destination outside Lithuania, including higher Money Laundering and Terrorism Financing (ML/TF) risk countries.5 Fintech developments have impacted the financial sector and risk profile of the country, challenging the authorities’ resources and capacity to mitigate the ML/TF risks.
The sensitivity (i.e., elasticity and built-in flexibility) of the U. S. individual income tax to changes in national income is of great interest to researchers and policymakers. However, the direct measurement of this sensitivity—that is, the measurement obtained from time-series observations of the relevant variables—has always been difficult, and even at times impossible, because changes in the legal structure of the tax have been too frequent to provide enough observations that relate to the same legal structure to allow statistically significant coefficients to be determined. This was particularly true in the United States before 1954, when the rates were changed frequently; it has also been true since 1963, when important changes occurred in rates, personal exemptions, deductions, and other features. In contrast, during the period between 1954 and 1963, hardly any significant statutory changes occurred in the tax.