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Liechtenstein Vows to Tighten Noose on Terrorist Financing Risks

In a bid to stay ahead of the curve in combating money laundering and terrorist financing, Liechtenstein has implemented stringent measures to monitor and prevent illicit activities. The tiny European country has long been committed to anti-money laundering and combating the financing of terrorism (AML/CFT) efforts, with a zero-tolerance policy towards any form of financial wrongdoing.

AML/CFT Efforts in Liechtenstein

As an EEA member, Liechtenstein has diligently implemented EU AML directives and regulations, including:

• The 4th and 5th Anti-Money Laundering Directives
• Regulation (EU) 2015/847 on information accompanying transfers of funds

The country’s implementation provisions can be found in the Law on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Act; SPG), as well as the Ordinance on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Ordinance; SPV).

Oversight and Compliance

The country’s anti-money laundering efforts are overseen by the Financial Market Authority (FMA Liechtenstein), which is responsible for monitoring compliance with relevant obligations and imposing measures and sanctions where violations occur. The FMA conducts on-site inspections, evaluates information from the SPG reporting system, and rigorously follows up on any abusive conduct on the financial market.

Due Diligence Obligations

Financial institutions, trust and company service providers, and designated non-financial businesses and professions (DNFBPs) are required to comply with anti-money laundering rules when dealing with their clients. These due diligence obligations include:

• Identification and verification of clients: Verify the identity of clients and ensure that they have a legitimate reason for conducting transactions.
• Identification and verification of beneficial owners: Identify and verify the beneficial owners of clients, including individuals who ultimately control or direct the client.
• Clarification of clients’ source of funds and source of wealth: Obtain information about the client’s source of funds and wealth to ensure that they are not derived from illicit activities.
• Ongoing transaction monitoring: Continuously monitor transactions for suspicious activity and report any findings to the relevant authorities.
• Filing of reports of suspicion of money laundering, predicate offences of money laundering, or financing of terrorism

International Recognition

Liechtenstein’s commitment to combating money laundering and terrorist financing has been recognized by international organizations, including:

• The Financial Action Task Force (FATF)
• The Anti-Money Laundering CFT Standing Committee (AMLSC)

The country will continue to play an active role in combating financial crime and promoting transparency and integrity in the financial system.