Financial Crime World

Global Financial Crime Trends in Liechtenstein: A Zero-Tolerance Policy for Anti-Money Laundering

Liechtenstein, a small European country nestled between Switzerland and Austria, has been at the forefront of combating financial crimes such as money laundering and terrorism financing. For years, the nation has adopted a zero-tolerance policy towards these illicit activities, ensuring that its anti-money laundering (AML) and combating the financing of terrorism (CFT) framework is robust and effective.

Compliance with EU Directives and Regulations

As an EEA member, Liechtenstein 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 country’s AML/CFT responsibilities are outlined in various laws and regulations, including the Law on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Act; SPG).

Financial Intelligence Unit (FIU)

The FIU plays a crucial role in receiving and analyzing reports of suspicion from persons subject to due diligence and public authorities. The FIU also analyzes general threats of money laundering, predicate offenses of money laundering, and financing of terrorism.

Key Responsibilities of the FIU

  • Receive and analyze reports of suspicion
  • Analyze general threats of money laundering
  • Identify predicate offenses of money laundering
  • Analyze financing of terrorism

Office of the Public Prosecutor

The Office of the Public Prosecutor examines the FIU’s analysis reports and initiates investigations where appropriate. If there is sufficient suspicion of an offense, it files charges with the competent court.

Key Responsibilities of the Office of the Public Prosecutor

  • Examine FIU’s analysis reports
  • Initiate investigations where appropriate
  • File charges with the competent court

Prosecution Authorities

The prosecution authorities are responsible for enforcing the Criminal Code (money laundering and predicate offenses, financing of terrorism) and parts of the SPG.

Key Responsibilities of the Prosecution Authorities

  • Enforce the Criminal Code (money laundering and predicate offenses)
  • Enforce parts of the SPG
  • Prosecute money laundering and predicate offenses
  • Prosecute financing of terrorism

International Cooperation

Liechtenstein has been actively participating in AML/CFT efforts for decades, guided by the international standards of the Financial Action Task Force (FATF). Since 1999, Liechtenstein has been a member of MONEYVAL, an FATF-style regional body, which is based at the Council of Europe in Strasbourg.

Key International Cooperation Efforts

  • Participate in AML/CFT efforts
  • Implement FATF Recommendations
  • Collaborate with international organizations (MONEYVAL, FATF)

Review by MONEYVAL

In 2021/2022, implementation of the FATF Recommendations in Liechtenstein was reviewed by MONEYVAL as part of its fifth round of evaluations. The report shows that Liechtenstein has a broad and convergent understanding of its money laundering and terrorist financing risks and pursues a strong supervisory approach commensurate to the risks.

Key Findings from the MONEYVAL Report

  • Liechtenstein has a broad and convergent understanding of its money laundering and terrorist financing risks
  • The country pursues a strong supervisory approach commensurate to the risks
  • Liechtenstein performed well in comparison with other countries evaluated by MONEYVAL
  • The country was rated “compliant” or “largely compliant” with 37 of the 40 FATF recommendations

Conclusion

Liechtenstein’s zero-tolerance policy towards financial crimes such as money laundering and terrorism financing has ensured that its AML/CFT framework is robust and effective. The country’s active participation in international cooperation efforts, implementation of EU directives and regulations, and strong supervisory approach have all contributed to its success in combating financial crime.