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Banking Compliance Issues and Solutions in Liechtenstein
Liechtenstein has been at the forefront of anti-money laundering (AML) and combating the financing of terrorism (CFT), with a zero-tolerance policy in place. As an EU Economic Area (EEA) member, the country has implemented the 4th and 5th EU Anti-Money Laundering Directives as well as Regulation (EU) 2015/847 on information accompanying transfers of funds.
The Role of the Financial Market Authority
The Financial Market Authority (FMA) plays a crucial role in monitoring compliance with AML/CFT obligations by financial institutions, trust and company service providers, and designated non-financial businesses and professions (DNFBPs). The FMA evaluates information from the Self-Regulation Ordinance reporting system, conducts on-site inspections, and takes swift action against any abusive conduct on the financial market.
Due Diligence Obligations
Financial institutions, trust service providers, and DNFBPs are responsible for adhering to AML/CFT rules when dealing with clients. Key due diligence obligations include:
- Identifying and verifying clients
- Beneficial owners, source of funds and wealth
- Ongoing transaction monitoring
- Reporting suspicions of money laundering or financing of terrorism
Financial Intelligence Unit
The Financial Intelligence Unit (FIU) receives and analyzes reports of suspicion from persons subject to due diligence and public authorities, and refers cases to the Office of the Public Prosecutor when necessary. The FIU also analyzes general threats of money laundering and terrorist financing.
Register of Beneficial Owners
The Office of Justice maintains the register of beneficial owners of legal entities, as required by the Act on the Register of the Beneficial Owners of Legal Entities (VwbPG). This register contains information on the beneficial owners of Liechtenstein companies, foundations, and trusts.
International Cooperation
Liechtenstein has been actively participating in AML/CFT efforts for decades, guided by international standards set by the Financial Action Task Force (FATF) and MONEYVAL, an FATF-style regional body. The country’s implementation of the FATF Recommendations was reviewed by MONEYVAL as part of its fifth round of evaluations, with Liechtenstein performing well and being subject to the regular follow-up process.
Conclusion
Liechtenstein has demonstrated its commitment to maintaining high standards of banking compliance, ensuring a secure financial system for its citizens and international partners alike.