Financial Crime World

Emerging Risks in Financial Crime Prevention in Liechtenstein: A Growing Concern

Liechtenstein has long been committed to anti-money laundering and combating the financing of terrorism (AML/CFT) efforts. However, emerging risks are increasingly posing challenges to financial crime prevention in the country.

Challenges to AML/CFT Efforts in Liechtenstein

Strengthening Measures

In recent years, Liechtenstein has implemented various measures to strengthen its AML/CFT framework, including:

  • The 4th and 5th EU Anti-Money Laundering Directives
  • Regulation (EU) 2015/847 on information accompanying transfers of funds
  • The Law on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Act; SPG)
  • The Ordinance on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Ordinance; SPV)

Emerging Risks

Despite these measures, emerging risks such as:

  • Increasing use of virtual currencies: Virtual currencies are becoming increasingly popular, making it challenging to track transactions and prevent money laundering.
  • Rise of online money laundering schemes: Online platforms are being used to launder money, making it difficult to detect and prevent these activities.
  • Growing complexity of global financial systems: The increasing complexity of global financial systems is making it harder to detect and prevent money laundering.

Challenges Faced by Law Enforcement Agencies

Prosecution authorities are facing increasing pressure to investigate and prosecute complex financial crimes, which often require specialized expertise and resources. The Office of Justice is responsible for maintaining the Register of Beneficial Owners of Legal Entities, but this register has been criticized for its lack of transparency and accessibility.

Strengthening AML/CFT Framework

To address these risks, Liechtenstein needs to strengthen its AML/CFT framework, improve cooperation with international partners, and enhance the effectiveness of its law enforcement agencies. This includes:

  • Improving data analysis tools: The Financial Intelligence Unit (FIU) requires more effective data analysis tools to keep pace with emerging risks.
  • Enhancing coordination with international partners: Liechtenstein needs to improve coordination with international partners to prevent money laundering and terrorist financing.
  • Providing specialized expertise and resources: Law enforcement agencies require specialized expertise and resources to investigate and prosecute complex financial crimes.

Conclusion

Emerging risks are increasingly posing challenges to financial crime prevention in Liechtenstein. To address these risks, the country needs to strengthen its AML/CFT framework, improve cooperation with international partners, and enhance the effectiveness of its law enforcement agencies.