Money Laundering Crackdown in Liechtenstein: An Examination of the Principality’s Implementation of European Money-Laundering Directives

Understanding Liechtenstein’s Fight Against Money Laundering

Liechtenstein, a small European country between Switzerland and Austria, has gained attention for its efforts to combat money laundering. In this article, we explore how the Principality has implemented the European Money-Laundering Directives.

Dr. Michael Breuer, Legal Counsel at the Liechtenstein Bankers Association, shares insights into this topic in a series of articles published by the Association. Let’s examine some critical points.

European Community Money-Laundering Directives

1. Background The European Community Money-Laundering Directive 91/308/EEC marked the beginning of regulatory frameworks for EU member states to counteract money laundering.

Principality of Liechtenstein’s Regulatory Framework

2. Liechtenstein’s Compliance Since the initial Directive, Liechtenstein has adapted its regulatory framework in response to subsequent amendments. These include the Commission Proposal of 14th July 1999 and Directive 2001/97/EC.

The EC Money-Laundering Directive in Liechtenstein

3. Provisions Against Money Laundering The Directive introduced several measures to deter money laundering. Liechtenstein adopted these provisions as part of its laws, including customer identification, record-keeping, and reporting requirements.

Impact on Financial Institutions

4. Affected Entities This Directive influenced various financial institutions, including credit institutions, financial institutions, and other professions or business categories. Liechtenstein adjusted its regulations, ensuring these entities underwent due diligence checks and reporting procedures.

5. Definition of Money Laundering The Directive outlined the definition of money laundering, which Liechtenstein incorporated into its domestic legislation. Key components include the locale of the predicate offense, the intent to engage in money laundering, and the ban of such activities.

Cooperation and Disclosure Requirements

6. Information Sharing Additionally, the Directive established requirements for financial institutions to collaborate with each other and law enforcement agencies in sharing information regarding potential money laundering activities.

Adapting to Subsequent Amendments

Subsequent amendments, such as Directive 2001/97/EC, extended the scope of covered crimes, expanded the Directive’s personal scope, and enforced stricter reporting requirements.

Liechtenstein’s Continued Commitment

Liechtenstein has persistently adjusted its laws to align with the evolving standards set by the European Community Money-Laundering Directives, underscoring its dedication to preventing money laundering and related financial crimes.