Financial Crime World

Title: Liechtenstein’s Commitment to Financial Crime and Cybersecurity: A Strong Bulwark Against Money Laundering and Terrorist Financing

In the realm of financial crime and cybersecurity, the Principality of Liechtenstein emerges as a model of vigilance and dedication. With a unwavering commitment to combating money laundering and terrorist financing, Liechtenstein’s approach is characterized by a zero-tolerance policy.

A Member of the European Economic Area (EEA)

As a member of the European Economic Area (EEA), Liechtenstein has actively implemented the EU’s 4th and 5th Anti-Money Laundering Directives, as well as Regulation (EU) 2015/847 on information accompanying transfers of funds. These regulations are upheld by the following measures:

  1. Due Diligence Act (SPG) and Ordinance on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (SPV)
  2. Act on the Register of the Beneficial Owners of Legal Entities (VwbPG)

Schematic Overview of Liechtenstein’s AML/CFT Authorities and Persons

Financial Market Supervisory Authority (FMA) Liechtenstein

The FMA is integral in maintaining adherence to anti-money laundering regulations. It monitors the compliance of those subject to due diligence, imposes measures and sanctions for violations, and leverages information from the SPG reporting system and on-site inspections to detect and deter abusive conduct within the financial market.

Persons Subject to Due Diligence

The following entities must comply with anti-money laundering rules:

  • Financial institutions
  • Trusted third-party service providers
  • Designated Non-Financial Business and Professions (DNFBPs)

These obligations include:

  • Client identification and verification
  • Beneficial owner identification and verification
  • Explanation of clients’ funds & wealth origins
  • Ongoing transaction monitoring
  • Reporting of suspected money laundering, money laundering-related offenses, or terrorism financing

Financial Intelligence Unit (FIU)

The FIU collects, analyzes, and disseminates reports of suspected money laundering, money laundering-related offenses, and terrorism financing from reporting entities and public authorities. The FIU collaborates with international partners to assess financial risks and shares information with the Office of the Public Prosecutor.

Prosecution Authorities

The Office of the Public Prosecutor evaluates FIU reports and initiates investigations if deemed necessary. They are responsible for enforcing criminal legislation related to money laundering and terrorism financing, as well as parts of the SPG (e.g., tardy or unreported reports of suspicion).

Office of Justice

The Office of Justice administers the registration process for the Act on the Register of the Beneficial Owners of Legal Entities (VwbPG) to ensure compliance with AML regulations.

International Cooperation and Compliance Standards

Since 1999, Liechtenstein has been a member of MONEYVAL, an international organization dedicated to evaluating the effectiveness of various countries’ anti-money laundering/countering the financing of terrorism systems. In the 2021/2022 evaluation round, MONEYVAL acknowledged Liechtenstein’s progress in strengthening AML/CFT measures and commended its strong supervisory approach, labeling the country as one of only five member jurisdictions with a positive outcome. Liechtenstein was found to be largely or entirely compliant with 37 of the FATF’s 40 recommendations (no “non-compliant” ratings).

European cooperation is crucial for enforcing AML/CFT responsibilities. The European Banking Authority (EBA) oversees these tasks, with the AML CFT Standing Committee (AMLSC) developing regulatory technical standards and guidelines. The FMA represents Liechtenstein in the AMLSC as a non-voting member.