Liechtenstein Tightens Its Grip on Anti-Money Laundering Regulations

Combating Money Laundering and Financing of Terrorism

In a bid to combat money laundering and financing of terrorism (ML/FT), Liechtenstein has implemented a comprehensive strategic approach, ensuring strict adherence to international standards. As a member of the European Economic Area (EEA) and MONEYVAL - the Council of Europe’s Committee of Experts on the evaluation of AML/CFT measures - Liechtenstein is committed to implementing Financial Action Task Force (FATF) recommendations.

Whole-of-Government Cooperation

The country’s financial market has consistently relied on whole-of-government cooperation, involving national bodies and financial market participants. This collaborative effort not only ensures compliance with FATF and EU requirements but also addresses Liechtenstein’s own interests in fighting ML/FT.

Risk Assessment and Mitigation

Identifying, assessing, and understanding ML/FT risks is crucial to developing a robust anti-money laundering and combating the financing of terrorism (AML/CFT) regime. In recent years, Liechtenstein authorities have conducted exhaustive information and data analysis to determine the country’s risk exposure through National Risk Assessments (NRA).

The Role of Blockchain

The Liechtenstein financial center boasts a global client base, offering a range of financial products and services in a small geographic area. While this competitive advantage presents a challenge from an ML/FT risk perspective, authorities view risks globally, assess them carefully, and implement mitigation measures accordingly.

In 2020, Liechtenstein introduced the “Blockchain Act”, establishing comprehensive regulations and supervisory systems for virtual assets. This early regulation enabled authorities to evaluate data for risk assessment purposes, and they continue to monitor market developments and assess them from a risk perspective.

National AML/CFT Strategy and Action Plan

The results of these risk assessments inform improvements to national AML/CFT measures. Based on these findings, the Liechtenstein Government has adopted an AML/CFT strategy and action plan, prioritizing increased cooperation, coordination, and information exchange at both national and international levels. This includes close collaboration with US authorities such as:

• FinCEN
• OFAC
• The Department of Justice
• The Securities and Exchange Commission

Conclusion

Liechtenstein’s commitment to combating ML/FT is evident in its comprehensive approach to AML/CFT regulations. By identifying, assessing, and mitigating risks, the country ensures a robust financial market that adheres to international standards and protects against money laundering and financing of terrorism.