Financial Crime World

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Liechtenstein’s Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Framework

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Risk Assessment

Liechtenstein has a relatively low risk profile when it comes to terrorist attacks. However, economic crime and corruption pose significant threats due to its international clientele and wealth management services.

  • Low likelihood of terrorist attacks: The jurisdiction has not experienced any terrorist attacks.
  • Significant threat from economic crime and corruption:
    • Fraud
    • Embezzlement
    • Tax evasion

AML/CFT System

Liechtenstein’s AML/CFT system is in place, with a comprehensive legal and institutional framework for international cooperation.

  • Comprehensive legal framework: The jurisdiction has a robust AML/CFT law that governs the prevention of money laundering and terrorism financing.
  • Effective international cooperation: Competent authorities have demonstrated effective cooperation in providing and seeking information from foreign jurisdictions.

Challenges and Deficiencies

While Liechtenstein’s AML/CFT system is generally effective, there are areas for improvement.

  • Insufficient sanctions: Monetary fines may not be applied effectively, proportionately, or dissuasively by the FMA (Financial Market Authority).
  • Limited enforcement action: Remedial supervisory measures are mostly used to deal with breaches, and enforcement action against the TCSP sector is less than expected.
  • Rudimentary supervision: The Chamber of Lawyers’ supervision is limited but not a major concern due to the risk and size of the regulated sector.

International Cooperation

Liechtenstein has a comprehensive legal and institutional framework for international cooperation, including formal and informal channels with foreign jurisdictions.

  • Dual criminality requirements: Some issues related to dual criminality requirements regarding tax evasion may impact effective cooperation.
  • Measures to minimize risks: Measures have been implemented to minimize the risks associated with dual criminality requirements.

Overall Assessment

In most respects, the elements of an effective AML/CFT system are in place. However, practical application is needed to ensure compliance and effectiveness.

  • Continued strengthening of the AML/CFT framework: Liechtenstein should continue to strengthen its AML/CFT framework, improving supervision, and ensuring that competent authorities effectively apply sanctions.
  • Effective prevention of money laundering and terrorism financing: The jurisdiction must prioritize effective prevention of money laundering and terrorism financing to maintain a robust financial system.