Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) Framework in Liechtenstein

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Money Laundering (ML)

Liechtenstein’s judiciary has achieved convictions for all three types of ML cases: self-laundering, third-party laundering, and autonomous ML prosecutions. However, the country still faces challenges in its anti-money laundering efforts.

Key Challenges

• Proportionate Sanctions: Sanctions imposed by Liechtenstein courts for ML offenses are not proportionate and dissuasive.
• Types of Money Laundering Cases: Self-laundering of proceeds from fraud committed abroad is the prevailing typology, while third-party laundering and autonomous ML prosecutions are rare.

Confiscation of Proceeds

Liechtenstein pursues confiscation of proceeds as a policy objective. The competent authorities have established strong inter-institutional cooperation to detect, seize/freeze, and confiscate assets.

Key Initiatives

• Conviction- and Non-conviction-Based Confiscation: Both types of confiscation are frequently applied in practice.
• Amounts Seized/Frozen and Confiscated: The amounts seized/frozen and confiscated are considerable, although still inferior to the sums seized.

Terrorist Financing (TF)

There have been no TF prosecutions/convictions in Liechtenstein so far. However, the national TF risk assessment concluded that the risk of TF in Liechtenstein is medium.

Key Findings

• TF Risk Assessment: The risk of TF in Liechtenstein is considered to be medium.
• TF Investigation: One TF investigation was carried out, but it did not result in further proceedings as no evidence of TF was found.

Sanctions and Counter-Terrorism Measures

Sanctions for TF offenses appear proportionate and dissuasive, although there have been no prosecutions/convictions to test this. Liechtenstein has a framework treaty with Switzerland to delegate cross-border controls, but statistics and discussions revealed weaknesses in the system.

Key Initiatives

• TF Strategy: The country has developed a TF Strategy to prevent/suppress TF.
• Counter-Terrorism Measures: There is no specific counter-terrorism related strategy in place.

Other Initiatives

Liechtenstein’s legal framework ensures automatic implementation of UN TF-related measures into the national framework. The country has recently amended its legislation in line with FATF Recommendations covering TF/PF supervision and procedures for designation, listing, and delisting.

Key Amendments

• UN TF-Related Measures: Automatic implementation of UN TF-related measures into the national framework.
• FATF Recommendations: Recent amendments to legislation in line with FATF Recommendations covering TF/PF supervision and procedures for designation, listing, and delisting.