Financial Crime World

Liechtenstein Takes a Firm Stance Against Financial Crime

A Zero-Tolerance Policy Towards Money Laundering and Terrorist Financing

In its ongoing efforts to combat money laundering and terrorist financing, Liechtenstein has adopted a zero-tolerance policy towards financial crime. As an EEA member state, the country has implemented key EU directives aimed at preventing these illicit activities.

The Cornerstone of Liechtenstein’s AML/CFT Regime

The cornerstone of Liechtenstein’s anti-money laundering (AML) and combating the financing of terrorism (CFT) regime lies in its Law on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism. This legislation, combined with the Ordinance on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism, sets out the responsibilities of financial institutions, trust and company service providers, and designated non-financial businesses and professions (DNFBPs) in preventing money laundering.

The Financial Intelligence Unit at the Forefront

  • The Financial Intelligence Unit (FIU) plays a pivotal role in Liechtenstein’s AML/CFT framework.
  • Its primary function is to receive and analyze reports of suspicious transactions from financial institutions, DNFBPs, and other entities.
  • Where necessary, the FIU refers these cases to the Office of the Public Prosecutor for further investigation.

Enforcement Actions Take Centre Stage

The FMA (Financial Market Authority) in Liechtenstein serves as the primary enforcer of AML/CFT regulations. Through on-site inspections, evaluations of reports from the Professional Due Diligence Act’s reporting system, and rigorous follow-up on information regarding abusive conduct on the financial market, the FMA ensures compliance with anti-money laundering rules.

Prosecution Authorities On High Alert

  • The Office of the Public Prosecutor examines FIU analysis reports and initiates investigations where there is sufficient suspicion of an offence.
  • If charges are filed, prosecution authorities are responsible for enforcing the country’s Criminal Code, which covers money laundering and predicate offences as well as financing of terrorism.

International Cooperation and Compliance

Liechtenstein has been actively participating in international efforts to combat money laundering and terrorist financing since 1999. As a member of MONEYVAL, an FATF-style regional body based at the Council of Europe, Liechtenstein has demonstrated its commitment to implementing the 40 FATF Recommendations.

International Cooperation and Compliance

  • In 2021/2022, MONEYVAL reviewed implementation of the FATF Recommendations in Liechtenstein as part of its fifth round of evaluations.
  • The resulting report highlighted Liechtenstein’s broad and convergent understanding of money laundering and terrorist financing risks, as well as its pursuit of a strong supervisory approach commensurate with these risks.

Cooperation at the European Level

At the EU/EEA level, AML/CFT responsibilities have been centralised at the European Banking Authority (EBA). The AML CFT Standing Committee (AMLSC) develops regulatory technical standards and guidelines in accordance with EU directives. Liechtenstein participates in this committee as a non-voting member, represented by the FMA.

Conclusion

Overall, Liechtenstein’s commitment to implementing stringent regulations and enforcing anti-money laundering measures is evident in its efforts to prevent financial crime and protect the integrity of the financial system.