Financial Crime World

Liechtenstein Faces Calls for Improvement in Banking Fraud Probe

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A recent report by MONEYVAL, a council of the Council of Europe, has highlighted several areas where Liechtenstein needs to improve its efforts to combat money laundering and terrorism financing. The country’s banking sector, in particular, was found to be lacking in certain areas.

Weaknesses Identified

While MONEYVAL acknowledged that Liechtenstein has made significant progress in understanding the risks associated with money laundering and terrorism financing, it identified several weaknesses in the country’s supervisory structures and the application of anti-money laundering and combating the financing of terrorism (AML/CFT) measures by the private sector.

  • Some financial institutions have not implemented effective risk mitigation measures.
  • Concerns over lack of transparency in beneficial ownership information for legal persons and legal arrangements.
  • Suspicious Activity Reports (SARs)/Suspicious Transaction Reports (STRs) submitted by financial institutions have not always targeted high-risk predicate offences such as tax crimes.

Financial Intelligence Unit Praised

The Financial Intelligence Unit (FIU) in Liechtenstein was praised for its analytical reports, which are an essential tool for law enforcement authorities. However, the report noted that SARs/STRs submitted by financial institutions have not always targeted high-risk predicate offences such as tax crimes.

Asset Recovery and Sanctions

The authorities were also criticized for their handling of confiscation and asset recovery cases, with MONEYVAL calling for more effective sanctions to be imposed on those found guilty of money laundering.

  • The country needs to impose more severe penalties for those involved in money laundering activities.
  • Effective sanctions will help deter individuals from engaging in illegal financial activities.

International Cooperation

International cooperation was identified as an area where Liechtenstein needs to improve. While the country has made efforts to strengthen its international cooperation in recent years, some legal provisions continue to pose risks to effective collaboration.

Non-Profit Organizations

Non-profit organizations (NPOs) operating in Liechtenstein were also found to be lacking in their understanding of the risks associated with money laundering and terrorism financing.

  • NPOs need to take steps to better understand the risks and implement measures to prevent illegal activities.
  • This includes training staff on AML/CFT regulations and implementing robust due diligence processes.

Conclusion

Overall, while MONEYVAL acknowledged that Liechtenstein has made significant progress in combating money laundering and terrorism financing, it called for further improvements in several areas to ensure the country’s banking sector is better protected against fraudulent activities.