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Liechtenstein Combats Financing of Terrorism with Robust Framework
In a bid to thwart illicit financial activities, Liechtenstein has implemented a comprehensive framework to combat the financing of terrorism (CFT) and anti-money laundering (AML). As an EEA member, the country has adopted the 4th and 5th EU Anti-Money Laundering Directives as well as Regulation (EU) 2015/847 on information accompanying transfers of funds.
A Zero-Tolerance Policy
Liechtenstein adheres to a zero-tolerance policy in combating CFT and AML, with a focus on preventing the laundering of proceeds from crime and terrorist financing. The relevant implementation provisions are found in the Law on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Act; SPG) and in the Ordinance on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Ordinance; SPV).
Regulatory Oversight
The Financial Market Authority (FMA Liechtenstein) plays a pivotal role in monitoring compliance with CFT and AML regulations. The FMA evaluates information from the SPG reporting system, conducts on-site inspections, and rigorously follows up on any abusive conduct on the financial market.
Key Obligations for Due Diligence
Financial institutions, trust and company service providers (TCSPs), and designated non-financial businesses and professions (DNFBPs) are required to comply with CFT and AML rules when dealing with clients. The most important due diligence obligations include:
- Identification and verification of clients: Verify the identity of all customers and maintain up-to-date information about them.
- Identification and verification of beneficial owners: Identify and verify the beneficial owners of a company or other legal entity, ensuring that they are not unknown or anonymous.
- Clarification of clients’ source of funds and source of wealth: Understand the source of funds and wealth of customers to ensure they are not derived from illicit activities.
- Ongoing transaction monitoring: Continuously monitor transactions for suspicious activity, such as unusual patterns or large sums of money.
- Filing of reports of suspicion of money laundering, predicate offences of money laundering, or financing of terrorism: Report any suspicions of money laundering or terrorist financing to the Financial Intelligence Unit (FIU).
Financial Intelligence Unit (FIU)
The FIU is responsible for receiving and analysing reports of suspicion from persons subject to due diligence and public authorities. Where it suspects that a criminal offence has been committed, the FIU reports to the Office of the Public Prosecutor.
Prosecution Authorities
The Office of the Public Prosecutor examines the FIU’s analysis reports and initiates investigations where appropriate. If there is sufficient suspicion of an offence, it files charges with the competent court.
Compliance with International Standards
Liechtenstein actively participates in AML/CFT efforts guided by international standards set by the Financial Action Task Force (FATF). The country has been a member of MONEYVAL since 1999 and has undergone regular evaluations. In its latest report, MONEYVAL acknowledged Liechtenstein’s progress in improving measures to combat money laundering and financing of terrorism.
Cooperation at the European Level
At the EU/EEA level, AML/CFT responsibilities have been centralised at the European Banking Authority (EBA). The FMA represents Liechtenstein as a non-voting member in the AML CFT Standing Committee (AMLSC).
Liechtenstein’s comprehensive framework and robust measures demonstrate its commitment to combating financing of terrorism and anti-money laundering.