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Banking Regulations in Liechtenstein: Key Points

Applicable Law

When it comes to banking transactions in Liechtenstein, two key laws come into play:

  • Liechtenstein Civil Code (ABGB): This code applies to banking transactions and provides a framework for the conduct of business.
  • Consumer Protection Act (KSchG): This act supersedes provisions of the ABGB that are less favorable to customers, ensuring greater protection for consumers.

Contract of Mandate

The contract of mandate is commonly used in banking business. When a bank acts as an agent on behalf of its customer:

  • The bank has a duty to act diligently and honestly.
  • They must transfer all benefits arising from the transaction to the principal (customer).
  • If the bank exceeds the limitations of the power of attorney, they are liable for the consequences.

Fees and Commissions

When it comes to fees, commissions, or grants received by the bank from third parties:

  • Banks assume that customers have waived their right unless instructed otherwise.
  • This assumption is subject to certain conditions, including disclosure obligations prior to the conduct of business.

General Terms and Conditions

General Terms and Conditions must meet certain criteria to be valid and applicable:

  • They must not cause a substantial imbalance of contractual rights and obligations.
  • Unusual provisions that are detrimental to customers may not become part of the contract if they were not expected by the customer.

Cross-Border Banking Activities

Banks operating in Liechtenstein must comply with specific regulations when providing services across borders:

  • Banks can take up business in Liechtenstein only on the basis of a license issued by the FMA, unless they have notified the FMA prior to their first-time activity under the freedom to provide services.
  • Banks outside the EEA may provide banking services in Liechtenstein through a branch subject to a license.

Conciliation Board

The extrajudicial conciliation board is an alternative dispute resolution mechanism that can be called upon to settle disputes between customers and banks:

  • The board acts as a mediator, but neither parties are bound to accept its generated solution.