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Liechtenstein Takes Proactive Approach to Combating Financing of Terrorism

In a bid to strengthen its financial center and protect against illicit activities, Liechtenstein has implemented a comprehensive strategy to combat the financing of terrorism (CFT). As a member of the European Economic Area (EEA) and the Council of Europe’s Committee of Experts on Money Laundering and Terrorist Financing (MONEYVAL), Liechtenstein is committed to adhering to international standards and best practices.

Global Approach Key to Effective CTF Measures

Liechtenstein’s financial center caters to a global client base, with clients benefiting from access to various financial products and services in a single geographic area. However, this also presents challenges from a risk perspective, where a purely national approach falls short. In response, Liechtenstein authorities view risks from a global perspective, assessing and mitigating them accordingly.

• Challenges of a global client base
  • Global reach increases exposure to illicit activities
  • National approaches may not be sufficient to address risks
• Benefits of a global approach
  • Enables more effective risk assessment and mitigation
  • Enhances collaboration with international partners

Strong Regulatory Framework

In 2020, Liechtenstein introduced a comprehensive regulation and supervisory system regarding virtual assets (Blockchain Act), ensuring that relevant due diligence standards apply to the token economy. This early regulation has enabled authorities to evaluate data for risk assessment purposes. As the field continues to evolve rapidly, Liechtenstein authorities remain vigilant, monitoring changes in the market and assessing them from a risk perspective.

• Key components of the Blockchain Act
  • Comprehensive regulation and supervisory system
  • Due diligence standards apply to token economy
  • Enables risk assessment and mitigation

Collaboration and Information Sharing Critical

The results of Liechtenstein’s risk assessments inform its national AML/CFT strategy and action plan. Key priorities include intensifying cooperation, coordination, and exchange of information at both national and international levels. This includes close collaboration with counterparts in the United States, such as FinCEN, the Office of Foreign Asset Controls, the Department of Justice, and the Securities and Exchange Commission.

• Importance of collaboration and information sharing
  • Enhances risk assessment and mitigation
  • Improves coordination and cooperation at national and international levels
• Partnerships with US counterparts
  • FinCEN
  • Office of Foreign Asset Controls
  • Department of Justice
  • Securities and Exchange Commission

Liechtenstein’s Proactive Approach

By adopting a comprehensive strategy to combat CFT, Liechtenstein has demonstrated its commitment to maintaining a secure and stable financial center. Through close cooperation with international partners, rigorous regulatory oversight, and proactive risk assessment, Liechtenstein is well-positioned to address emerging threats and protect against illicit activities.

• Benefits of Liechtenstein’s approach
  • Maintains a secure and stable financial center
  • Enhances reputation as a trusted financial hub
  • Demonstrates commitment to combating CFT