Financial Crime World

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

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Overview of the Report

The report assesses various aspects of Liechtenstein’s AML/CFT regime, including its regulatory framework, law enforcement efforts, preventive measures, and supervisory practices.

Key Points from the Report

  • No Domestic Terrorist List: There is no domestic terrorist list in Liechtenstein; however, action has been taken based on foreign lists (European Regulation and OFAC).
  • Liechtenstein FIU: The Liechtenstein Financial Intelligence Unit (FIU) conducts thorough operational analysis of Suspicious Activity Reports (SARs). It has legal powers to collect additional financial information from disclosing entities.
  • Law Enforcement: Law enforcement in money laundering and terrorist financing cases rests with the Public Prosecutor and the national police, specifically the Economic Crime Unit.
  • AML/CFT Preventive Measures: AML/CFT preventive measures are defined in the Due Diligence Act and expanded in secondary legislation in the Due Diligence Ordinance (DDO).
  • Risk-Based Approach: Liechtenstein has established a risk-based approach that requires financial institutions to build and maintain profiles for each long-term customer.
  • CDD Requirements: Provisions regarding Customer Due Diligence (CDD) are broadly in line with the international standard, but need to be strengthened further in some areas.
  • FMA Supervision: The FMA is an independent authority that supervises financial institutions on prudential and AML/CFT matters. It has developed and implements a broad range of AML/CFT preventive measures.

Recommendations for Improvement

The report highlights both strengths and weaknesses in Liechtenstein’s AML/CFT regime, providing recommendations for improvement to enhance its effectiveness.

Enhancing Effectiveness

  • Strengthen CDD Requirements: Further strengthening provisions regarding Customer Due Diligence (CDD) is necessary to bring them into line with international standards.
  • Enhance Supervision: The FMA should continue to develop and implement a broad range of AML/CFT preventive measures, ensuring that financial institutions are effectively supervised on prudential and AML/CFT matters.
  • Improve Risk-Based Approach: Liechtenstein’s risk-based approach should be further refined to ensure that financial institutions build and maintain accurate profiles for each long-term customer.