Financial Crime World

Here is the converted article in markdown format:

Liechtenstein’s Banking Regulations for Anti-Money Laundering: A Model of Efficiency

Liechtenstein has established itself as a leader in combating money laundering and terrorist financing by implementing a robust regulatory framework that exceeds international standards. As an EEA member, the country has transposed the 4th and 5th EU Anti-Money Laundering Directives, as well as Regulation (EU) 2015/847 on information accompanying transfers of funds.

Regulatory Framework

At the heart of Liechtenstein’s AML/CFT efforts is the Law on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Act; SPG). This law sets out the due diligence obligations for financial institutions, TT service providers, and DNFBPs. These entities must:

  • Identify and verify clients
  • Verify beneficial owners
  • Clarify their source of funds and wealth

Key Entities

Several key entities play a crucial role in Liechtenstein’s AML/CFT efforts:

  • Financial Intelligence Unit (FIU): analyzes reports of suspicion from persons subject to due diligence and public authorities
  • Office of Justice: maintains a register of beneficial owners of legal entities
  • FMA Liechtenstein: responsible for monitoring compliance with AML/CFT regulations and imposing measures and sanctions where necessary

International Cooperation

Liechtenstein has demonstrated its commitment to international cooperation in combating money laundering and terrorist financing by actively participating in efforts led by the Financial Action Task Force (FATF) and MONEYVAL, an FATF-style regional body. In 2022, MONEYVAL published a report on Liechtenstein’s AML/CFT measures, praising the country’s strong supervisory approach and its broad understanding of money laundering and terrorist financing risks.

Recognition

Liechtenstein has been recognized for its excellent performance in implementing the FATF Recommendations. The country’s AML/CFT laws, ordinances, and guidance were rated “compliant” or “largely compliant” with 37 out of 40 recommendations, and it scored above average in five out of 11 immediate outcomes.

Future Cooperation

As a non-voting member of the AML CFT Standing Committee (AMLSC) at the European level, Liechtenstein works closely with other EU/EEA countries to develop regulatory technical standards and guidelines for AML/CFT. The country’s commitment to AML/CFT efforts has earned it a reputation as a leader in this field, and its banking regulations serve as a model for other jurisdictions seeking to strengthen their own anti-money laundering and terrorist financing frameworks.

By implementing a robust regulatory framework and actively participating in international cooperation efforts, Liechtenstein has established itself as a leader in combating money laundering and terrorist financing. Its banking regulations serve as a model for other jurisdictions seeking to strengthen their own AML/CFT frameworks.