Financial Crime World

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Liechtenstein’s Financial Crime Prevention Best Practices Earn International Acclaim

In its unwavering commitment to combating financial crime, Liechtenstein has implemented robust anti-money laundering and combating the financing of terrorism (AML/CFT) measures, earning international recognition for its best practices. As a member of the European Economic Area (EEA), Liechtenstein has transposed the 4th and 5th EU Anti-Money Laundering Directives, as well as Regulation (EU) 2015/847 on information accompanying transfers of funds.

AML/CFT Responsibilities

The Financial Market Authority (FMA) is responsible for monitoring compliance with AML/CFT obligations by persons subject to due diligence and imposing measures and sanctions where violations occur. The FMA evaluates information from the Law on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Act; SPG) reporting system, conducts on-site inspections, and rigorously follows up on information about abusive conduct on the financial market.

Obligations for Persons Subject to Due Diligence

  • Financial institutions must comply with AML/CFT rules when dealing with clients.
  • Identification and verification of clients, beneficial owners, source of funds, and source of wealth are essential due diligence obligations.
  • Ongoing transaction monitoring and reporting suspicious transactions are also required.

Financial Intelligence Unit (FIU)

The FIU receives and analyzes reports of suspicion from persons subject to due diligence and public authorities. Where it suspects a criminal offense has been committed, the FIU reports to the Office of the Public Prosecutor. The FIU also analyzes general threats of money laundering, predicate offenses of money laundering, and financing of terrorism.

Prosecution Authorities

  • The Office of the Public Prosecutor examines FIU analysis reports and initiates investigations where appropriate.
  • If there is sufficient suspicion of an offense, it files charges with the competent court.
  • Prosecution authorities are responsible for enforcing the Criminal Code (money laundering and predicate offenses, financing of terrorism) and parts of the Due Diligence Act.

Office of Justice

The Office of Justice maintains the Register of Beneficial Owners of Legal Entities, which was enacted to transpose requirements from the Anti-Money Laundering Directives governing registers of beneficial owners.

Compliance with International Standards

Liechtenstein has actively participated in AML/CFT efforts for decades, guided by international standards set by the Financial Action Task Force (FATF). The country is a member of MONEYVAL, an FATF-style regional body, and was recently evaluated as part of its fifth round of evaluations. The report highlighted Liechtenstein’s strong supervisory approach and progress in intensifying its AML/CFT measures.

Cooperation at the European Level

  • At the EU/EEA level, AML/CFT responsibilities relating to the financial market have been centralized at the European Banking Authority (EBA).
  • The AML CFT Standing Committee (AMLSC) develops regulatory technical standards and guidelines in accordance with the requirements of the 4th and 5th EU Anti-Money Laundering Directives.
  • The FMA represents Liechtenstein as a non-voting member in the AMLSC.

Conclusion

Liechtenstein’s commitment to combating financial crime has earned it international recognition for its best practices in anti-money laundering and combating the financing of terrorism. With its robust regulatory framework, strong supervisory approach, and progressive measures to prevent money laundering and terrorist financing, Liechtenstein continues to set an example for other countries to follow.