Evaluating Liechtenstein’s Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Framework

Investigative Judges and AML/CFT Framework

In Liechtenstein, investigative judges have the authority to impose coercive measures, but their investigations are often initiated based on mutual legal assistance requests and Financial Intelligence Unit (FIU) reports. While they play a crucial role in enforcing AML/CFT regulations, there is room for improvement in this area.

Preventive Measures - Financial Institutions

The Due Diligence Act (DDA) and Due Diligence Ordinance (DDO) outline the preventive measures that financial institutions must take to comply with AML/CFT regulations. While these provisions are defined, some may grant excessive discretion to financial institutions, potentially leading to inconsistent application.

Key Provisions

• Conduct due diligence on customers and transactions
• Build customer profiles based on risk criteria
• Rely on intermediaries to provide customer profile information and certified copies of identification documents

Risk-Based Approach

Liechtenstein has adopted a risk-based approach, but the legal framework does not fully comply with FATF Recommendations in several areas. This may hinder the effectiveness of AML/CFT measures.

Areas for Improvement

• Enhance provisions regarding CDD
• Strengthen supervision and involvement in on-site inspection work
• Improve customer due diligence processes

Supervision and Customer Protection

The FMA is responsible for prudential and AML/CFT supervision, as well as customer protection. While it has developed various AML/CFT preventive measures, its involvement in on-site inspection work could be improved with additional resources.

Key Responsibilities

• Develop and implement AML/CFT measures
• Conduct on-site inspections
• Protect customers from financial harm