Financial Crime World

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National Risk Assessment for Money Laundering and Terrorist Financing in Liechtenstein

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This document presents a comprehensive National Risk Assessment (NRA) for money laundering and terrorist financing in Liechtenstein. The assessment evaluates the risk of these financial crimes in various sectors and provides recommendations for mitigation.

Securities/Asset Managers/Funds Sector

The securities/asset managers/funds sector exhibits heightened risk due to unfamiliar market trends and potential misuse of single investor funds for money laundering.

Key Risks

  • Single investor funds can be used to conceal assets acquired through criminal offenses, making them attractive for money laundering purposes.
  • The sector is suitable for contributing a wide range of assets (shareholdings, real estate, bank accounts) and can be established by or for legal entities.

Client Risk

Liechtenstein’s financial centre specializes in European clients, with the majority of target countries having low terrorism risk.

Key Points

  • There are no subsidiaries or branches in high-risk countries.
  • Financial institutions from high-risk countries do not have branches or subsidiaries in Liechtenstein.

Product Risk

The main products of the Liechtenstein financial centre (asset structuring, high-end asset management, insurance, highly specialized investment funds) have a low risk of terrorist financing.

Key Points

  • Products classified as associated with high TF risks (e.g., MSBs) are of little significance in Liechtenstein.
  • There are virtually no suspicious activity reports relating to terrorist financing.

Statistics

The assessment highlights the following statistics:

  • Virtually no suspicious activity reports relating to terrorist financing.
  • No requests from abroad for mutual legal assistance related to terrorist financing in the last 10 years.

Risk Factors that Cannot be Fully Assessed

Due to a lack of data and operational knowledge, the following sectors require adequate regulation and supervision:

  • Casinos
  • Duty-free warehouses
  • Free customs warehouses
  • Value warehouses

External Risk Assessment by Country and Predicate Offence

The risk of money laundering and terrorist financing in Liechtenstein depends heavily on external factors (non-domestic).

Recommendations

  • It is advisable to examine countries and predicate offenses that carry increased risk potential for domestic market participants.

Outlook

This document represents the first comprehensive National Risk Assessment for Liechtenstein. A second round of the NRA will expand the limited data situation, including:

  • Payment flows from and to Liechtenstein
  • Nationality and place of establishment of beneficial owners
  • Number of PEP relationships
  • Number and purpose of NPOs transferring assets abroad