Financial Crime World

Liechtenstein Prioritizes Anti-Money Laundering, Combats Terrorism Financing

Strengthening Financial System Through Robust Regulations

In a move to enhance its financial system’s integrity, Liechtenstein has implemented stringent anti-money laundering and combating the financing of terrorism (AML/CFT) regulations. As an EEA member, it adheres to EU directives on AML/CFT, including the 4th and 5th Anti-Money Laundering Directives and Regulation (EU) 2015/847.

Key Legislation Governing AML/CFT in Liechtenstein

  • Law on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Act; SPG): This law sets out the framework for professional due diligence obligations among financial institutions.
  • Ordinance on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Ordinance; SPV): This ordinance outlines implementing regulations for the Due Diligence Act.

Regulatory Body

The FMA is responsible for monitoring compliance with AML/CFT regulations among financial institutions and imposing sanctions when violations occur. It evaluates information from the SPG reporting system, conducts on-site inspections, and investigates reports of suspicious activity.

Obligations of Financial Institutions and Service Providers

Financial institutions, TT service providers, and DNFBPs must comply with due diligence obligations outlined in the Due Diligence Act and implementing regulations. These include:

  • Identification and verification of clients
  • Identification and verification of beneficial owners
  • Clarification of clients’ source of funds and wealth
  • Ongoing transaction monitoring
  • Filing reports of suspicion of money laundering, predicate offenses, or financing of terrorism

Financial Intelligence Unit (FIU)

The FIU receives and analyzes reports of suspicious activity from financial institutions and public authorities. If it suspects a criminal offense has been committed, the FIU reports to the Office of the Public Prosecutor.

International Cooperation

Liechtenstein has been actively participating in AML/CFT efforts for decades, guided by international standards set by the Financial Action Task Force (FATF). It is a member of MONEYVAL, an FATF-style regional body that evaluates the quality of national regulations implementing the 40 FATC Recommendations among its member jurisdictions.

Evaluation and Review

In 2021/2022, Liechtenstein’s implementation of the FATF Recommendations was reviewed by MONEYVAL as part of its fifth round of evaluations. The report showed that Liechtenstein has a broad and convergent understanding of its money laundering and terrorist financing risks and pursues a strong supervisory approach commensurate to the risks.

EU/EEA Level Cooperation

At the EU/EEA level, AML/CFT responsibilities relating to the financial market have been centralised at the European Banking Authority (EBA). The AML CFT Standing Committee (AMLSC) was created to develop regulatory technical standards and guidelines in accordance with requirements of the 4th and 5th EU Anti-Money Laundering Directives.