Liechtenstein Cracks Down on Financial Crimes, Meets International Standards
Strengthening Anti-Money Laundering and Combating Terrorism Financing Efforts
In a significant move to prevent financial crimes, Liechtenstein has implemented a comprehensive set of regulations and measures aimed at combating money laundering and terrorist financing (AML/CFT). As an EEA member, the country has transposed the 4th and 5th EU Anti-Money Laundering Directives as well as Regulation (EU) 2015/847 on information accompanying transfers of funds.
The Financial Market Authority’s Key Role
The Financial Market Authority (FMA) plays a crucial role in monitoring compliance with AML/CFT regulations by financial institutions, TT service providers, and DNFBPs. The FMA:
- Evaluates information from the SPG reporting system
- Conducts on-site inspections
- Takes swift action against violators
Stringent Due Diligence Obligations
Financial institutions and other regulated entities must adhere to stringent due diligence obligations, including:
- Client identification and verification
- Beneficial owner identification
- Source of funds and wealth clarification
- Ongoing transaction monitoring
- Filing of suspicious activity reports
The Financial Intelligence Unit (FIU) is responsible for analyzing these reports and referring suspected cases to the Office of the Public Prosecutor.
Enforcement and Transparency
The prosecution authorities are responsible for enforcing criminal laws related to money laundering, predicate offenses, and financing of terrorism. The Office of Justice maintains the register of beneficial owners of legal entities, ensuring transparency in company ownership.
International Cooperation and Compliance
Liechtenstein has been actively participating in AML/CFT efforts for decades, guided by international standards set by the Financial Action Task Force (FATF) and MONEYVAL, a regional body based at the Council of Europe. In 2021/2022, MONEYVAL reviewed Liechtenstein’s implementation of FATF Recommendations, praising the country’s broad understanding of its money laundering and terrorist financing risks.
The report acknowledged Liechtenstein’s strong supervisory approach, noting that it performed very well compared to other evaluated countries. The country was rated “compliant” or “largely compliant” with 37 of the 40 FATF Recommendations and scored above average in five of 11 immediate outcomes examined. MONEYVAL encouraged Liechtenstein to further intensify its AML/CFT measures.
Cooperation with European Authorities
Liechtenstein also cooperates closely with European authorities, participating in the AML CFT Standing Committee (AMLSC) and representing the country at the European level through the FMA’s non-voting membership.