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Liechtenstein Makes Progress in Combating Money Laundering and Terrorism Financing
A recent report by MONEYVAL, the Council of Europe’s anti-money laundering body, has acknowledged Liechtenstein’s progress in strengthening measures to combat money laundering (ML) and financing of terrorism (FT). However, the report also highlights areas where further improvements are needed.
Progress Made in Combating Money Laundering and Terrorism Financing
According to the report, Liechtenstein has demonstrated a substantial level of effectiveness in:
- Understanding ML/TF risk
- Setting national AML/CFT policies
- Using financial intelligence
- Confiscating proceeds of crime
- Investigating and prosecuting terrorist financing
- International cooperation
Areas for Improvement
While Liechtenstein has made progress, MONEYVAL recommends that the country enhance:
- Supervision over entities presenting a high or medium-high risk
- Application of AML/CFT preventative measures by the private sector
- Transparency of beneficial ownership of legal persons and legal arrangements
- Money laundering investigation and prosecution
- Implementation of targeted financial sanctions
Strengths and Weaknesses
The report praises Liechtenstein for having a broad and convergent understanding of its core ML/TF risks. However, there is still room for improvement in particular areas, which would only require refinements to an existing risk assessment process.
MONEYVAL also notes that competent authorities in Liechtenstein produce good quality financial intelligence and are successful in confiscating the proceeds of crime. However, more efforts need to be invested in investigating and prosecuting money laundering of a wider range of foreign predicates, including sophisticated ML schemes involving complex legal structures established and managed in the country.
International Cooperation
Liechtenstein’s close cooperation with neighboring countries Switzerland and Austria in combating terrorism and TF is also highlighted in the report. The authorities are equipped with skills and knowledge to detect collection, movement, and use of funds for TF purposes.
Private Sector and Supervision
The private sector in Liechtenstein has a generally good understanding of ML/TF risks and obligations, particularly banks and large trust and company service providers linked to private banking and wealth management. However, supervision over entities assessed as presenting a high or medium-high risk is found not to be sufficient.
Beneficial Ownership Transparency
Beneficial ownership information on legal persons and legal arrangements is available to competent authorities from a register maintained by the Office of Justice and directly from the private sector. While there has been no difficulty in accessing this information in a timely manner, the completeness and plausibility of information held in the BO register have not yet been monitored.
International Cooperation
Finally, Liechtenstein provides timely and constructive assistance across the range of requests for international cooperation, including mutual legal assistance. However, some procedural constraints exist.
Follow-Up Reporting Process
As a result of this positive report, Liechtenstein will be subject to MONEYVAL’s regular follow-up reporting process, becoming one of only five member-jurisdictions with this outcome so far.
Full Report Available
The full report is available on the MONEYVAL website.