Terrorism Financing Laws in Liechtenstein: A Strategic Approach to Combat Money Laundering and Financing of Terrorism

Liechtenstein has implemented a comprehensive strategy to combat money laundering and financing of terrorism, adhering strictly to international standards. As a member of the European Economic Area (EEA) and the Council of Europe’s Committee of Experts on the evaluation of Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) measures, MONEYVAL, Liechtenstein has committed itself to implementing all EU AML/CFT provisions and recommendations of the Financial Action Task Force (FATF).

A Whole-of-Government Approach

Liechtenstein’s authorities and financial market participants have taken a whole-of-government approach to prevent money laundering and financing of terrorism, relying on close cooperation among national bodies responsible for preventing these crimes. This approach has enabled the country to effectively implement FATF and EU requirements while also taking actions in its own interest.

Identifying and Assessing Risks

A crucial aspect of Liechtenstein’s AML/CFT regime is identifying, assessing, and understanding risks associated with money laundering and financing of terrorism. The country’s authorities have conducted thorough information and data analysis to determine its risk exposure through National Risk Assessments (NRAs).

Global Approach to Mitigate Risks

Liechtenstein’s financial center serves a global client base, offering a range of financial products and services in a small geographic area. While this can be a competitive advantage, it also presents challenges from a money laundering and financing of terrorism risk perspective, requiring a global approach to mitigate risks.

Key Initiatives

• Blockchain Act: Introduced in 2020, the “Blockchain Act” ensures that relevant due diligence standards apply to the token economy.
• Risk Assessment: Liechtenstein’s authorities continuously monitor changes in the market and assess them from a risk perspective, giving the country the opportunity to respond promptly to emerging risks.

Results and Priorities

The results of the risk assessments are crucial for improving national AML/CFT measures. Based on these results, the Liechtenstein Government has adopted an AML/CFT strategy and action plan, prioritizing further intensification of cooperation, coordination, and exchange of information at both national and international levels.

International Cooperation

• United States: Liechtenstein’s authorities maintain close cooperation with their counterparts in the United States, including FinCEN, the Office of Foreign Asset Controls, the Department of Justice, and the Securities and Exchange Commission.

Conclusion

Liechtenstein’s strategic approach to combating money laundering and financing of terrorism has enabled it to effectively implement international standards while adapting to emerging risks. The country’s authorities continue to work closely with international partners to prevent these crimes and protect its financial center.