Financial Crime World

Liechtenstein Imposes Stiff Fines for Anti-Money Laundering Failures

The Financial Market Authority (FMA) in Liechtenstein has announced a maximum fine of CHF 1,000,000 for financial institutions and businesses that fail to comply with anti-money laundering (AML) regulations. The fine is applicable to intentional failures to report suspicious transactions, carry out transactions without a paper trail, or provide false information to the Financial Intelligence Unit (FIU).

FMA Warnings

The FMA has warned that any failure to provide requested information or providing false information to the FIU constitutes a criminal infringement. In addition to fines, the authority may impose other sanctions, including:

  • Prohibiting the commencement of new business relationships for a limited period
  • Requesting disciplinary measures from the competent authority
  • Publicly disclosing decisions against financial institutions

Criminal Sanctions

Violations of AML requirements with respect to suspicious transaction reports are considered criminal misdemeanors or infractions, which fall under the competence of the criminal court. The penalties can be appealed within 14 days to the Court of Appeal, and final decisions can be enforced.

The FMA has also announced that it will only publish decisions in cases of serious, systematic, or repeated violations, while decisions of the criminal court are publicly disclosed.

Affected Businesses

A wide range of businesses are subject to AML regulations, including:

  • Financial institutions
  • Token service providers (including token issuers, depositaries, exchange service providers, and administrators for crypto-assets)
  • Trading platform operators for non-fungible tokens
  • Art dealers and intermediaries in the trade of artworks
  • Custodians of third-party assets
  • Renters of premises and containers for the safekeeping of valuables

These businesses are required to perform a risk-based approach, including:

  • Identifying and verifying the identity of customers
  • Establishing business profiles
  • Monitoring transactions

Consequences of Non-Compliance

The FMA has emphasized that non-compliance with AML regulations can have severe consequences, including criminal sanctions and fines. Businesses that fail to comply with regulations may also face:

  • Reputational damage
  • Loss of customer trust

In light of the new regulations, businesses operating in Liechtenstein are advised to ensure they are fully compliant with AML requirements to avoid any potential penalties or consequences.