Financial Crime World

Title: Liechtenstein’s Unyielding Fight Against Financial Crimes: AML/CFT Measures and International Recognition

Introduction

Liechtenstein, a small European principality, has made financial crime deterrence a top priority. This article outlines how Liechtenstein has embraced AML/CFT measures and international recognition in its fight against financial crimes.

Adoption of AMLDs and Regulations

As a member of the European Economic Area (EEA), Liechtenstein has adopted the following legislation:

  • The 4th and 5th EU Anti-Money Laundering Directives (AMLDs)
  • Regulation (EU) 2015/847 on information accompanying transfers of funds

The resulting legislation includes:

  • The Due Diligence Act (SPG)
  • The Due Diligence Ordinance (SPV)
  • The Act on the Register of the Beneficial Owners of Legal Entities (VwbPG)

Role of the Financial Market Authority (FMA)

The Financial Market Authority (FMA) is responsible for monitoring and enforcing compliance. The FMA:

  • Scrutinizes reporting from relevant institutions
  • Conducts on-site inspections
  • Imposes measures and sanctions when necessary

Entities subject to due diligence include:

  • Financial institutions
  • Trust or transaction service providers
  • Designated non-financial businesses and professions (DNFBPs)

Role of the Financial Intelligence Unit (FIU)

The Financial Intelligence Unit (FIU) serves as a vital link in the AML/CFT framework. The FIU:

  • Receives and analyzes reports from the FMA and other authorities
  • Forwards suspicious reports to the Office of the Public Prosecutor for further investigation
  • Monitors general threats and trends in money laundering, terrorism financing, and other financial crimes

Role of the Office of the Public Prosecutor

The Office of the Public Prosecutor is responsible for pursuing investigations and filing charges in cases involving suspected money laundering, predicate offenses, and terrorism financing. The prosecution authorities work alongside the FMA and other agencies to enforce the Criminal Code and certain provisions of the Due Diligence Act.

Transparency in Beneficial Ownership

The Act on the Register of the Beneficial Owners of Legal Entities (VwbPG) was enacted to address international requirements. The register contains information on the beneficial owners of Liechtenstein companies, foundations, and trusts, which is maintained by the Office of Justice.

International Cooperation and Standards

Liechtenstein’s commitment to international standards and collaboration includes:

  • Membership in the Moneyval, an FATF-style regional body at the Council of Europe, since 1999
  • Regular reviews of national AML/CFT systems by Moneyval to ensure compliance with FATF Recommendations
  • Favorable assessment of implementation of FATF Recommendations in 2021/2022

European Union and EEA Supervision

Supervision of financial market AML/CFT matters in the European Union and EEA has been centralized at the European Banking Authority (EBA). The AML CFT Standing Committee (AMLSC) develops regulatory technical standards and guidelines based on 4th and 5th AMLDs and Regulation (EU) 2015/847. The FMA represents Liechtenstein in the AMLSC as a non-voting member.