Financial Crime World

Liechtenstein Leads by Example: Banking Industry Best Practices for Financial Crime Prevention

A Leader in the Fight Against Financial Crime

In a commitment to maintaining a strong reputation as a financial hub, Liechtenstein has adopted a zero-tolerance policy towards money laundering and terrorism financing. The country’s adherence to international standards has earned it recognition as a leader in the fight against financial crime.

A Robust Regulatory Framework

Liechtenstein’s anti-money laundering (AML) and combating the financing of terrorism (CFT) framework is designed to prevent, detect, and investigate suspicious transactions. The relevant laws and regulations are implemented through:

  • Law on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Act; SPG): This law establishes the requirements for due diligence in preventing money laundering and financing of terrorism.
  • Ordinance on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Ordinance; SPV): This ordinance provides further details on the implementation of the Due Diligence Act.

Key Players in Financial Crime Prevention

The key players in Liechtenstein’s financial crime prevention efforts include:

  • FMA Liechtenstein: The FMA is responsible for monitoring compliance with AML/CFT regulations and imposing measures and sanctions where violations occur.
  • Financial Intelligence Unit (FIU): The FIU receives and analyses reports of suspicion from persons subject to due diligence and public authorities, and refers cases to the Office of the Public Prosecutor when necessary.
  • Prosecution Authorities: The Office of the Public Prosecutor examines the FIU’s analysis reports and initiates investigations where appropriate.
  • Office of Justice: The Office of Justice maintains the Register of Beneficial Owners of Legal Entities (VwbPG), which contains information on the beneficial owners of Liechtenstein companies, foundations, and trusts.

International Cooperation and Recognition

Liechtenstein has been a member of MONEYVAL, an FATF-style regional body, since 1999. In 2021/2022, implementation of the FATF Recommendations in Liechtenstein was reviewed by MONEYVAL as part of its fifth round of evaluations. The report highlighted Liechtenstein’s progress in improving measures to combat money laundering and financing of terrorism.

Conclusion

Liechtenstein’s commitment to AML/CFT best practices has earned it recognition as a leader in the fight against financial crime. The country’s robust regulatory framework, effective enforcement mechanisms, and international cooperation have made it an attractive destination for financial institutions and investors seeking a secure and compliant environment. By adopting and implementing these best practices, Liechtenstein continues to demonstrate its commitment to maintaining a strong reputation as a financial hub.