Financial Crime World

Liechtenstein Grapples with Terrorist Financing Risks Despite Strong Anti-Money Laundering Measures

A Mixed Report from Moneyval

In a report released last month, the Council of Europe’s Moneyval committee highlighted several areas where Liechtenstein needs to improve its efforts to combat terrorist financing (TF). While the country has made significant progress in addressing money laundering (ML) and TF risks, the report emphasized that further action is required to enhance supervision, transparency, and cooperation.

Key Findings

  • Understanding of ML and TF Risks: Liechtenstein’s authorities have a good understanding of key ML and TF risks, but some threats and inherent risks remain unassessed.
  • Financial Intelligence Unit (FIU): The FIU plays a crucial role in gathering financial information, but its reports have rarely targeted higher-risk predicate offenses such as tax offenses.
  • Investigations: Authorities are lacking in investigations involving complex legal structures established and managed in the country.
  • Sanctions and Confiscation: Sanctions imposed by authorities are not sufficiently dissuasive or proportionate, and confiscation of proceeds from crime is pursued as a policy objective.

Areas for Improvement

  • Enhance Supervision: Liechtenstein needs to improve its supervision of financial institutions and the private sector.
  • Increase Transparency: The country must increase transparency of beneficial ownership (BO) information on legal persons and arrangements.
  • Strengthen International Cooperation: Liechtenstein should strengthen international cooperation, particularly in areas where double criminality requirements for tax evasion may impact effective cooperation.

Recommendations

To address these concerns, Moneyval recommended that Liechtenstein:

  1. Enhance supervision of financial institutions and the private sector.
  2. Improve the application of anti-money laundering and combating financing terrorism (AML/CFT) measures by the private sector.
  3. Increase transparency of BO information on legal persons and arrangements.
  4. Strengthen international cooperation, particularly in areas where double criminality requirements for tax evasion may impact effective cooperation.

By addressing these concerns and implementing the recommended improvements, Liechtenstein can further strengthen its efforts to combat terrorist financing and money laundering, ensuring a safer financial system for all.