Title: Liechtenstein’s Proactive Approach to Financial Crime Risk Assessment: A Global Perspective
Liechtenstein: A Reputable Financial Center with a Commitment to Combat Financial Crime
In the European heart, the tiny principality of Liechtenstein has carved a significant niche in the global financial industry. Known for its open, internationally oriented market, Liechtenstein’s strategy is underpinned by a commitment to upholding international standards, with a particular focus on Money Laundering and Terrorism Financing (ML/FT) prevention.
Liechtenstein’s Membership and International Commitments
As a member of the European Economic Area (EEA), Liechtenstein adheres to all EU Anti-Money Laundering/Counter-Terrorism Financing (AML/CFT) directives. Additionally, the country is an active participant in MONEYVAL, the Council of Europe’s Committee of Experts on AML/CFT measures. Liechtenstein’s commitment extends to implementing FATF recommendations, which have paved the way for the global fight against financial crime.
A Whole-of-Government Approach to Combatting Financial Crime
For years, Liechtenstein has adopted a whole-of-government approach to preventing ML/FT, involving not only its own agencies but also financial market participants. This proactive stance is crucial as the fight against financial crime is fundamental to maintaining Liechtenstein’s reputation as a reputable financial center.
Financial Crime Risk Assessments
Identifying, assessing, and understanding financial crime risks is a crucial aspect of implementing a comprehensive AML/CFT regime. Over the past few years, Liechtenstein authorities have conducted intricate information and data analyses to determine the country’s risk exposure in National Risk Assessments (NRA).
A Global Perspective on Financial Crime Risks
Liechtenstein’s financial center boasts a diverse clientele from around the world. While this global reach offers a competitive advantage, it also poses challenges from an ML/FT risk perspective. Consequently, risks are assessed and managed from a global perspective, taking into account emerging trends and threats.
Pioneering Regulations for Virtual Assets
In 2020, Liechtenstein became the pioneer in implementing comprehensive regulations and supervision for virtual assets. This early regulation enabled authorities to conduct extensive risk assessment analyses on a substantial dataset. However, the virtual asset landscape is in constant flux, and Liechtenstein authorities continue to monitor and adapt to emerging trends.
Post-Assessment: Strategy and International Cooperation
The outcomes of the risk assessments inform and improve national AML/CFT measures. Post-assessment, the Liechtenstein Government adopted a comprehensive AML/CFT strategy and a resulting action plan. Enhanced collaboration and information exchange, not only at the national level but also internationally, is a primary priority. This cooperation extends to partnerships between Liechtenstein authorities and their counterparts in the United States, including FinCEN, OFAC, the Department of Justice, and the Securities and Exchange Commission.
Conclusion: Combating Financial Crime for a Sustainable Future
The commitment to combating financial crime in Liechtenstein runs deep, ensuring a sustainable and responsible financial center for the future. By employing a proactive, whole-of-government approach and incorporating global perspectives, Liechtenstein positions itself as a global leader in the fight against financial crime.