Financial Crime World

Emerging Risks in Financial Crime Prevention in Liechtenstein Exposed

A recent report from MONEYVAL highlights the need for continued improvement in addressing financial crime risks in Liechtenstein. Despite significant progress in preventing money laundering (ML) and terrorism financing (TF), several emerging threats remain unassessed.

Tax Crimes Evasion: A Concerning Trend

One of the key concerns identified by MONEYVAL is the risk of Liechtenstein’s financial sector being used to launder proceeds from tax crimes committed abroad. The authorities have acknowledged this threat, but further assessments are needed to determine the extent of the risk and potential measures to mitigate it.

  • Tax crimes evasion remains a significant concern for Liechtenstein’s financial sector
  • Authorities acknowledge the threat, but require further assessment
  • Measures to mitigate the risk are necessary

The Role of Financial Intelligence Unit in Preventing Financial Crimes

The report praises the Liechtenstein Financial Intelligence Unit (FIU) for its analytical reports, which provide valuable insights into financial crimes. However, MONEYVAL suggests that the FIU could produce more comprehensive reports on TF, laundering of foreign tax crimes, and SAR/STR reporting.

  • The FIU’s analytical reports are a valuable resource in preventing financial crimes
  • Further work is needed to produce comprehensive reports on TF, laundering of foreign tax crimes, and SAR/STR reporting

Private Sector’s Role in Preventing Financial Crimes

The report highlights the importance of private sector entities, such as banks and trust and company service providers (TCSPs), in preventing financial crimes. While they have taken steps to mitigate risks associated with private banking and wealth management, some areas require further attention, including source of wealth and source of funds verification.

  • Private sector entities play a crucial role in preventing financial crimes
  • Further work is needed on source of wealth and source of funds verification

Non-Profit Organisations’ Vulnerability to Financial Crimes

The report notes that non-profit organisations (NPOs) operating as associations are often unaware of their obligations related to CFT measures. This vulnerability must be addressed to prevent NPOs from being misused for TF purposes.

  • Non-profit organisations are vulnerable to financial crimes
  • Further work is needed to educate NPOs on their obligations

International Cooperation Key in Preventing Financial Crimes

Effective international cooperation is essential in preventing financial crimes, particularly given that predicate offences for ML are predominantly committed abroad. Liechtenstein’s authorities have taken steps to address issues related to double criminality requirements and obligations to hear the eligible party before providing evidence to a foreign jurisdiction.

  • International cooperation is crucial in preventing financial crimes
  • Further work is needed on addressing double criminality requirements and obligations