Financial Crime World

Liechtenstein Tackles Terrorist Financing Risks with Robust Strategies

The Principality of Liechtenstein has made significant strides in the fight against terrorist financing, boasting an open and internationally oriented financial market that adheres to stringent international standards. As a member of the European Economic Area (EEA), Liechtenstein has committed itself to implementing all EU Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) provisions.

Whole-of-Government Approach

Liechtenstein’s approach to combating money laundering and terrorist financing is characterized by close cooperation among national bodies, financial market participants, and international partners. This collaborative effort enables the country to effectively implement FATF and EU requirements while also addressing its own interests.

Key Partnerships:

  • National authorities
  • Financial market participants
  • International partners

Risk Assessment and Mitigation

Identifying, assessing, and understanding AML/CFT risks is a critical component of Liechtenstein’s national strategy. In recent years, authorities have conducted thorough information and data analysis to determine the country’s risk exposure through National Risk Assessments (NRA).

Key Steps:

  • Identify potential risks
  • Conduct thorough analysis
  • Determine risk exposure

Global Client Base

The Liechtenstein financial center serves clients from around the world, offering a range of financial products and services in a compact geographic area. While this presents a competitive advantage, it also poses challenges from an AML/CFT perspective, where a purely national approach is insufficient.

Challenges:

  • Competitive advantage
  • Global client base
  • Insufficient national approach

Regulation and Supervision of Virtual Assets

In 2020, Liechtenstein introduced a comprehensive regulation and supervisory system for virtual assets (Blockchain Act), ensuring that relevant due diligence standards apply to the token economy. Authorities have evaluated data from this sector to assess its risks and will continue to monitor developments in the field.

Key Regulations:

  • Blockchain Act
  • Due diligence standards

International Cooperation

Liechtenstein prioritizes cooperation with international partners, including the United States, to share information and best practices on AML/CFT measures. This close collaboration enables the country to stay ahead of emerging risks and respond promptly to changing circumstances.

Key Partners:

  • United States
  • Other international partners

By implementing a robust AML/CFT strategy and engaging in global cooperation, Liechtenstein has established itself as a leader in combating terrorist financing risks.