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Liechtenstein Takes a Zero-Tolerance Approach to Banking Fraud Prevention

As an EEA member state, Liechtenstein has implemented a comprehensive system of anti-money laundering (AML) and combating the financing of terrorism (CFT) measures to combat money laundering and terrorism financing.

Comprehensive AML/CFT Framework

The country’s AML/CFT framework is anchored in the Law on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Act; SPG) and the Ordinance on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Ordinance; SPV).

Key Players in AML/CFT Efforts

  • The Financial Market Authority (FMA) Liechtenstein plays a crucial role in monitoring compliance with AML/CFT obligations by persons subject to due diligence and imposing measures and sanctions where violations occur.

Persons Subject to Due Diligence: Obligations and Responsibilities

Financial institutions, trust and company service providers, and designated non-financial businesses and professions (DNFBPs) must comply with AML/CFT rules when dealing with their clients. These due diligence obligations are laid down in the Due Diligence Act (SPG) and implementing regulations.

Most Important Due Diligence Obligations

  • Identification and verification of clients
  • Identification and verification of beneficial owners
  • Clarification of clients’ source of funds and source of wealth
  • Ongoing transaction monitoring
  • Filing of reports of suspicion of money laundering, predicate offences of money laundering, or financing of terrorism

Financial Intelligence Unit (FIU): Receiving and Analysing Reports of Suspicion

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: Investigations and Enforcement

The Office of the Public Prosecutor examines FIU analysis reports and initiates investigations where appropriate. It also enforces AML/CFT laws and regulations.

MONEYVAL Report: Liechtenstein Rated ‘Compliant’ or ‘Largely Compliant’ with 37 of 40 Recommendations

The latest MONEYVAL report praises Liechtenstein’s broad and convergent understanding of its money laundering and terrorist financing risks. The country has also been commended for its strong supervisory approach commensurate to the risks.

Cooperation at the European Level

At the EU/EEA level, AML/CFT responsibilities relating to the financial market have been centralised at the European Banking Authority (EBA). The AML CFT Standing Committee (AMLSC) was created to develop regulatory technical standards and guidelines in accordance with the requirements of the 4th and 5th EU Anti-Money Laundering Directives. The FMA represents Liechtenstein in the AMLSC as a non-voting member.

Conclusion

With its robust AML/CFT framework, Liechtenstein is well-positioned to maintain its status as a secure and trustworthy financial centre.