Financial Crime World

Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) Practices in Liechtenstein

Overview

Liechtenstein has taken steps to address Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) practices, although there are areas for improvement. Here are some key points:

  • No domestic terrorist list: Liechtenstein does not have a domestic terrorist list, but it acts on foreign lists such as the European Regulation and OFAC.
  • Procedure for non-UNSCR 1267 cases: The procedure for dealing with non-UNSCR 1267 cases is unspecified and involves the common preventive and repressive process.

Financial Intelligence Unit (FIU)

The FIU is an independent financial intelligence unit responsible for collecting and analyzing data related to criminal proceeds and terrorism. Key points about the FIU include:

  • Legal powers: The FIU has legal powers to collect additional information from reporting entities, although its ability to obtain information from other subjects is open to question.
  • Relationship with reporting entities: The FIU has a good relationship with reporting entities and produces high-quality reports.

Law Enforcement

Law enforcement in ML and FT cases rests with the Public Prosecutor and national police (Economic Crime Unit). Key points about law enforcement include:

  • Investigative judges: Investigative judges have powers to impose coercive measures, and the legal framework available is comprehensive enough for serious investigations and prosecutions.
  • Mutual legal assistance requests: Investigations are mostly initiated by mutual legal assistance requests and FIU reports.

Preventive Measures

AML/CFT preventive measures are defined in the Due Diligence Act (DDA) and Due Diligence Ordinance (DDO). Key points about preventive measures include:

  • Risk-based approach: Liechtenstein has an overall risk-based approach, requiring financial institutions to build profiles for each long-term customer.
  • Excessive discretion: However, the legal provisions may give excessive discretion to financial institutions when applying the risk-based system and do not fully comply with specific criteria of the standard.

CDD (Customer Due Diligence)

Provisions regarding CDD are broadly in line with international standards, but need to be strengthened further in some areas. Key points about CDD include:

  • Identification requirements: The DDA and DDO grant some exemptions to identification, and requirements for beneficial owners’ identity need to be broadened.
  • Reliance on intermediaries: Financial institutions may rely on domestic and foreign intermediaries to provide customer profile information and certified copies of identification documents.

Supervision

The FMA is an independent authority responsible for prudential and AML/CFT supervision, as well as customer protection. Key points about supervision include:

  • License requirements: All financial institutions are licensed by the FMA based on internationally accepted criteria.
  • AML/CFT preventive measures: The FMA has developed and implements effective AML/CFT preventive measures, including annual on-site due diligence examinations carried out by external auditors.