Financial Crime World

LIECHTENSTEIN UNDER SCRUTINY FOR COMPLIANCE RISKS IN INTERNATIONAL TRANSACTIONS

A recent evaluation by MONEYVAL has shed light on areas where Liechtenstein’s anti-money laundering (AML) and counter-terrorist financing (CFT) regulations fall short. The report highlights the country’s progress in addressing money laundering and terrorist financing risks, but also points out significant gaps that need to be addressed.

Key Findings

  • Liechtenstein has a good understanding of key money laundering and terrorist financing risks, but some threats have not been fully assessed.
  • The authorities have not fully evaluated the extent to which the country’s financial sector could be used to launder proceeds from tax crimes committed abroad.
  • Thorough risk assessments on non-bank assets held by trust and company service providers are also lacking.

Financial Intelligence Unit (FIU) Evaluation

  • The FIU in Liechtenstein is recognized as a valuable source of financial information, but its reports on suspicious activity are not always commensurate with the prevalence of revenue-generating crimes.
  • Comprehensive strategic analysis reports on terrorist financing, laundering of proceeds from foreign tax crimes, and adequacy of Suspicious Activity Reports (SARs)/Suspicious Transaction Reports (STRs) reporting are also missing.

Private Sector Compliance

  • Understanding of money laundering and terrorist financing risks in the private sector is generally good.
  • Banks and large trust and company service providers take sophisticated measures to mitigate these risks, but smaller entities and some TCSPs have been reported to fail to file SAR/STRs and have been subject to enforcement actions.

Improvements Needed

To address these compliance risks, the report recommends that Liechtenstein:

  • Strengthens its supervision
  • Improves application of AML/CFT preventative measures by the private sector
  • Enhances transparency of beneficial ownership of legal persons and arrangements
  • Improves money laundering investigation and prosecution
  • Implements targeted financial sanctions

Conclusion

While Liechtenstein has made progress in addressing money laundering and terrorist financing risks, there is still much work to be done to ensure full compliance with international regulations. The MONEYVAL report provides a valuable roadmap for the country’s authorities to address these issues and strengthen its AML/CFT framework.