Financial Crime World

Title: Liechtenstein’s Commitment to Financial Regulation Compliance: AML/CFT Measures and MONEYVAL’s Positive Evaluation

Liechtenstein’s Commitment to Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT)

Liechtenstein, a European Economic Area (EEA) member, reaffirms its commitment to combating money laundering and countering the financing of terrorism (AML/CFT) through rigorous measures and a zero-tolerance policy. As a signatory to the EU Anti-Money Laundering Directives 4 and 5, and Regulation (EU) 2015/847, the Principality has implemented various legislation to ensure compliance.

Key AML/CFT Legislation

Key AML/CFT responsibilities and implementing regulations are outlined in various legislations:

  • Law on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Act; SPG)
  • Ordinance on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Ordinance; SPV)
  • VwbPG Act on the Register of the Beneficial Owners of Legal Entities

FMA Liechtenstein

The Financial Market Authority (FMA) plays a crucial role in monitoring compliance with anti-money laundering provisions among persons subject to due diligence. The FMA evaluates compliance through the SPG reporting system, conducts on-site inspections, and investigates any suspected illicit financial activities in the market.

Persons subject to Due Diligence

Financial institutions, Trust and Service Providers (TTSPs), and Designated Non-Financial Businesses and Professions (DNFBPs) are obligated to comply with AML/CFT rules when dealing with clients. Important due diligence tasks include:

  • Client identification and verification
  • Beneficial owner identification and verification
  • Clarification of clients’ source of funds and wealth
  • Ongoing transaction monitoring
  • Filing of reports on suspected money laundering, money laundering predicate offenses, and terrorist financing

Financial Intelligence Unit (FIU)

The Financial Intelligence Unit (FIU) is responsible for receiving, analyzing, and reporting suspicious transactions or activities to the Office of Public Prosecutor if necessary. They also assess broader threats to combat money laundering and terrorist financing.

Prosecution Authorities

The Office of Public Prosecutor investigates suspected crimes and files charges in court if substantial evidence is discovered. They oversee the enforcement of the Criminal Code related to money laundering, predicate offenses, and terrorism financing, as well as parts of the SPG.

Cooperation with International Standards

Since 1999, Liechtenstein has been an active member of MONEYVAL, an FATF-style regional body based at the Council of Europe. Regular evaluations of AML/CFT systems and national regulations are conducted by MONEYVAL to assess their adherence to the 40 FATF Recommendations.

MONEYVAL’s Positive Evaluation

In their fifth report on Liechtenstein published on June 29, 2022, MONEYVAL commended Liechtenstein’s robust approach to combating money laundering and terrorist financing [1]. The country performed exceptionally well compared to other evaluated jurisdictions, and Liechtenstein’s AML/CFT measures received ratings of “compliant” or “largely compliant” with 37 of the 40 FATF recommendations. Additionally, Liechtenstein ranked above average in five of the 11 immediate outcomes evaluated by the FATF. No significant gaps were identified in Liechtenstein’s AML/CFT measures in other areas assessed.

European Level Responsibilities

At the European level, AML/CFT responsibilities relating to the financial market are overseen by the European Banking Authority (EBA), and the AML CFT Standing Committee (AMLSC) was established to fulfill these tasks. The AMLSC creates regulatory technical standards (RTSs) and guidelines based on EU Anti-Money Laundering Directives and Regulation (EU) 2015/847 requirements. The FMA represents Liechtenstein in the AMLSC as a non-voting member.

[1] MONEYVAL (2022). Fifth Mutual Evaluation Report: Liechtenstein. Council of Europe Publishing. Available at: https://moneval.coe.int/moneval/en/home.html?menu=16&sub=24&pub=13264.