Financial Crime World

Liechtenstein’s Anti-Money Laundering Regulations: MONEYVAL Report Highlights Progress and Challenges

The Principality of Liechtenstein, a member of the Council of Europe’s Committee of Experts on Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), underwent a fourth assessment visit to evaluate its anti-money laundering (AML) and countering the financing of terrorism (CFT) measures. The evaluation was conducted by the International Monetary Fund (IMF).

Key Findings from the MONEYVAL Report

The report commends Liechtenstein for the following progress:

  • Significant alignment with the Financial Action Task Force (FATF) recommendations
  • Robust institutional framework
  • Greater transparency

However, the report also emphasizes the following challenges:

Criminal Approach to Money Laundering

The report highlights the need for improvements in the criminal approach to money laundering.

There is a recommendation for clarifying the legal framework to ensure mutual legal assistance does not limit or challenge effective AML/CFT implementation.

Role of Trust and Company Service Providers

The report calls for enhanced due diligence and clearer regulations for trust and company service providers in carrying out customer due diligence.

Key Areas of Concern

Vulnerabilities to Money Laundering

Liechtenstein’s business model focusing on private banking, foundation setting, and provision of corporate structures leaves it prone to money laundering.

Industry Representatives’ Awareness and Implementation

Industry representatives may not fully implement AML/CFT measures, even if they are aware of them.

Strengths of Liechtenstein’s AML/CFT Framework

The report praises Liechtenstein’s efforts in:

  • Focusing on asset recovery and civil confiscation procedures
  • Balancing protection of fundamental rights and reasonable application of procedures

Recommendations from the MONEYVAL Report

The report strongly encourages Liechtenstein to:

  • Address the key vulnerabilities identified
  • Ensure more effective implementation of AML/CFT measures
  • Closely examine regulatory frameworks to minimize risks in high-risk areas
  • Review suspicious transaction reporting practices and data
  • Strengthen communication and cooperation between authorities and industry sectors

The Importance of FIU Powers

The report concludes by emphasizing the importance of ensuring the FIU’s powers to obtain information from domestic authorities and reporting entities are not subject to unduly restrictive conditions and clear provisions exist to compel domestic authorities to provide requested information.