Financial Crime World

Assessment of Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) Practices in Liechtenstein

Overview

The report assesses the Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) practices in Liechtenstein against international standards, specifically the Financial Action Task Force (FATF) Recommendations.

Investigative Judges and Investigation Initiation

  • Investigative Judges: Liechtenstein has investigative judges who can impose coercive measures to aid in money laundering investigations.
  • Initiation of Investigations: Most ML-related investigations and proceedings are initiated by mutual legal assistance requests or FIU reports, with a low percentage triggered by an FIU report.

Predicate Offenses and Investigation Transfer

  • There is a tendency to transfer cases to the jurisdiction where the predicate offense occurred rather than taking up the investigation and prosecution in Liechtenstein.

Preventive Measures - Financial Institutions

  • Risk-Based Approach: Liechtenstein has established a risk-based approach requiring financial institutions to build and update profiles for each long-term customer.
  • Due Diligence Requirements: The legal provisions may give excessive discretion to financial institutions when applying the risk-based system and do not fully comply with specific criteria of the standard.

Customer Identification and Verification

  • Provisions regarding Customer Due Diligence (CDD) are broadly in line with international standards, but requirements for identification of beneficial owners and verification need to be broadened.

AML/CFT Supervision

  • The FMA is an independent authority responsible for prudential and AML/CFT supervision as well as customer protection.
  • Financial institutions have defined internal instructions for AML/CFT diligence, implemented training programs, and designated managers to ensure compliance.

Areas for Improvement

Overall, the report highlights areas where Liechtenstein’s AML/CFT practices need improvement, including:

  • The risk-based approach
  • CDD requirements
  • Supervision