Financial Crime World

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MONEYVAL Report Highlights Financial Fraud Risks in Liechtenstein

Liechtenstein’s financial sector has been found to be at risk of various types of fraud, according to a recent report by MONEYVAL, an international organization that monitors anti-money laundering (AML) and counter-terrorism financing (CFT) measures.

Key Findings

  • Some financial institutions in Liechtenstein have a limited understanding of the risks posed by tax fraud committed abroad, making them vulnerable to money laundering.
  • There is a need for greater transparency in the beneficial ownership of legal persons and legal arrangements.
  • Better reporting of suspicious transactions is required.

Financial Intelligence Unit (FIU)

The FIU in Liechtenstein was commended for its analytical reports, which are an essential tool for law enforcement agencies investigating financial crimes. However, the report noted that the FIU could produce more reports on terrorism financing and the laundering of proceeds from foreign tax crimes.

Liechtenstein’s legal framework allows for effective investigations and prosecutions of money laundering. However, the country’s authorities have been criticized for their lack of consistency in prosecuting all types of money laundering-related activities. Sanctions imposed on individuals and companies convicted of financial fraud were not found to be sufficiently dissuasive or proportionate to the crimes committed.

Concerns

  • The use of shell companies is a concern due to the lack of transparency in ownership.
  • Some non-profit organizations operating in Liechtenstein are not aware of their obligations under AML/CFT regulations.
  • There are concerns about the private sector’s attention paid to identifying and confirming the source of wealth and funds, as well as the possible illicit use of shell companies.

International Cooperation

International cooperation was identified as a key area for improvement. Concerns were raised about: + Double criminality requirements for tax evasion + The obligation to hear eligible parties before providing evidence to foreign jurisdictions

However, recent measures have minimized these risks.

Conclusion

The MONEYVAL report highlights the need for Liechtenstein to improve its AML/CFT framework to prevent financial fraud and protect the integrity of its financial sector. To achieve this, the country’s authorities must work to strengthen supervision, enhance transparency, and improve international cooperation to effectively combat money laundering and terrorism financing.