Financial Crime World

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Liechtenstein Banks Face Stringent Compliance Procedures

In its ongoing efforts to combat money laundering and terrorism financing, Liechtenstein has implemented some of the toughest anti-money laundering (AML) regulations in Europe. The country’s financial institutions are required to adhere to a strict set of compliance procedures, which include client identification, beneficial owner verification, and transaction monitoring.

A Zero-Tolerance Policy

Liechtenstein has adopted a zero-tolerance policy towards money laundering and terrorism financing, and its regulatory authorities take a rigorous approach to enforcing these regulations. The country’s Financial Market Authority (FMA) is responsible for monitoring compliance with AML rules and imposing sanctions where necessary.

Key Compliance Obligations

Financial institutions in Liechtenstein are subject to the following key compliance obligations:

  • Identification and verification of clients: Financial institutions must verify the identity of their clients, including their name, date of birth, and address.
  • Identification and verification of beneficial owners: Institutions must identify and verify the beneficial owners of client accounts, which includes individuals or entities that ultimately own or control the account.
  • Clarification of clients’ source of funds and source of wealth: Financial institutions must clarify the source of their clients’ funds and wealth to ensure they are not derived from illicit activities.
  • Ongoing transaction monitoring: Institutions must monitor client transactions for suspicious activity, such as large cash transactions or multiple small transactions.
  • Filing of reports of suspicion of money laundering or terrorism financing: Financial institutions must file reports with the relevant authorities if they suspect a client is involved in money laundering or terrorism financing.

Regulatory Framework

The regulatory framework for AML in Liechtenstein is governed by:

  • Law on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Act; SPG)
  • Ordinance on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Ordinance; SPV)

Compliance with International Standards

Liechtenstein has been actively participating in AML/CFT efforts for decades, guided by international standards from:

  • Financial Action Task Force (FATF)
  • MONEYVAL, an FATF-style regional body that evaluates the effectiveness of national AML/CFT systems

Positive Evaluation

In its latest evaluation, MONEYVAL praised Liechtenstein’s progress in improving measures to combat money laundering and terrorism financing. The country scored well in comparison with other jurisdictions and was commended for its strong supervisory approach.

Regular Follow-Up Process

As a result of the positive report, Liechtenstein will be subject to the regular MONEYVAL follow-up process, which aims to ensure that the country continues to implement effective AML/CFT measures.