Financial Crime World

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Liechtenstein’s Zero-Tolerance Approach to Anti-Money Laundering and Combating Terrorism Financing

Liechtenstein has been at the forefront of anti-money laundering (AML) and combating terrorism financing (CFT) efforts, with a zero-tolerance policy in place for years. As a member of the European Economic Area (EEA), Liechtenstein has implemented the 4th and 5th EU Anti-Money Laundering Directives as well as Regulation (EU) 2015/847 on information accompanying transfers of funds.

Key Legislation and Regulations

The relevant implementation provisions can be found in:

  • 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)
  • Act on the Register of the Beneficial Owners of Legal Entities (VwbPG)

Responsibilities of Authorities

The Financial Market Authority (FMA) is responsible for:

  • Monitoring compliance with AML/CFT obligations by persons subject to due diligence
  • Imposing measures and sanctions where violations occur
  • Evaluating information from the SPG reporting system, conducting on-site inspections, and following up on information about abusive conduct on the financial market

Due Diligence Obligations

Financial institutions, trusted third-party service providers, and designated non-financial businesses and professions (DNFBPs) must comply with AML/CFT rules when dealing with their clients. These due diligence obligations include:

  • Identification and verification of clients
  • Identification and verification of beneficial owners
  • Clarification of clients’ source of funds and source of wealth
  • Ongoing transaction monitoring
  • Filing of reports of suspicion of money laundering, predicate offences of money laundering, or financing of terrorism

Financial Intelligence Unit (FIU)

The FIU is responsible for:

  • Receiving and analysing reports of suspicion from persons subject to due diligence and public authorities
  • Reporting to the Office of the Public Prosecutor where it suspects a criminal offence has been committed

Prosecution Authorities

The Office of the Public Prosecutor examines the FIU’s analysis reports and initiates investigations where appropriate. If there is sufficient suspicion of an offence, it files charges with the competent court.

Office of Justice

The Act on the Register of the Beneficial Owners of Legal Entities (VwbPG) was enacted to transpose the requirements of the Anti-Money Laundering Directives governing registers of beneficial owners of entities. This register with information on the beneficial owners of Liechtenstein companies, foundations, and trusts is maintained by the Office of Justice.

International Cooperation

Liechtenstein has been actively participating in AML/CFT efforts for decades, guided by the international standards of the Financial Action Task Force (FATF). Since 1999, Liechtenstein has been a member of MONEYVAL, an FATF-style regional body, which is based at the Council of Europe.

MONEYVAL Report

In its recent report, MONEYVAL rated Liechtenstein as “compliant” or “largely compliant” with 37 of the 40 recommendations. In assessing the effective application of legal regulations in practice, Liechtenstein scored above average in five of 11 “immediate outcomes” examined.

Cooperation at the European Level

At the EU/EEA level, AML/CFT responsibilities relating to the financial market have been centralised at the European Banking Authority (EBA). The AML CFT Standing Committee (AMLSC) develops regulatory technical standards and guidelines in accordance with the requirements of the 4th and 5th EU Anti-Money Laundering Directives.