Financial Crime World

Liechtenstein’s Efforts Against Transnational Organized Crime: A Comprehensive Review

Criminal Justice and Security

Liechtenstein has a robust judicial system that can effectively investigate and prosecute criminal cases. The country’s prison system is well-equipped, but it lacks capacity to house individuals with sentences over two years, resulting in them being sent to Austrian prisons.

  • Efficient Judicial System: Liechtenstein’s judicial system is efficient and transparent, enabling the effective investigation and prosecution of criminal cases.
  • Well-Equipped Prison System: The country has one prison that meets international standards. However, its capacity to house individuals with sentences over two years is limited.
  • National Police Force: The national police force has several law enforcement units focused on corruption and money laundering.
  • INTERPOL Presence: Liechtenstein has a National Central Bureau in Vaduz, playing a key role in safeguarding national and regional security.

Economic and Financial Environment

Liechtenstein is a leading offshore tax haven with tight bank secrecy laws, making money laundering a significant concern for the government. Despite this, the country has made efforts to increase banking transparency.

  • Offshore Tax Haven: Liechtenstein’s banking system is known for its strict bank secrecy laws, which can facilitate money laundering.
  • Increased Transparency Efforts: The country has created a special analytics unit to detect money laundering and has implemented anti-money laundering measures.
  • Impact on Information Exchange: Financial secrecy limits the exchange of information with other countries. However, recent efforts have led to better results in evaluations by the Council of Europe’s MONEYVAL.

Civil Society and Social Protection

The government has implemented legislation and training mechanisms to provide effective treatment for victims of all types of crime. Prevention is also a key strategy, with early education campaigns and drug-use prevention programs in place.

  • Victim Support: The government has put legislation and training mechanisms in place to ensure effective support for victims of all types of crime.
  • Prevention Strategies: Early education campaigns and drug-use prevention programs are part of the country’s approach to preventing crime.
  • Civil Society Engagement: Civil society groups are not particularly focused on crime prevention due to the lack of organized crime groups in Liechtenstein.

Challenges

Financial secrecy remains a significant issue, making it difficult for the government to exchange information with other countries. The media environment is also a concern, with only two main media groups owned by the two leading political parties and state-owned TV and radio channels.

  • Financial Secrecy: Financial secrecy limits the exchange of information with other countries, hindering efforts against money laundering.
  • Media Environment: The country’s media environment is dominated by state-owned TV and radio channels and two main media groups owned by the leading political parties.
  • Declining Media Importance: The lack of financial aid from the state to ensure quality media has contributed to its declining importance among citizens.

Efforts Against Organized Crime

Liechtenstein has taken steps to combat transnational organized crime, including signing tax information exchange agreements with countries like the US and launching initiatives to undermine organized crime actors.

  • Tax Information Exchange Agreements: The country has signed agreements with countries such as the US to exchange tax information.
  • Finance Against Slavery and Trafficking Project: Liechtenstein has launched a multi-stakeholder initiative aimed at undermining the capture and abuse of global financial flows by organized crime actors.