Financial Crime World

Liechtenstein’s Crusade Against Corporate Financial Crime: A Zero-Tolerance Approach to Money Laundering and Terrorist Financing

In the picturesque Alpine microstate of Liechtenstein, a strong and unwavering commitment to combatting corporate financial crime has been a long-standing priority. The principality, a member of the European Economic Area (EEA), has implemented stringent anti-money laundering and countering the financing of terrorism (AML/CFT) measures, adhering to a strict zero-tolerance policy.

Foundations of Liechtenstein’s AML/CFT Framework

  • EEA Membership and Regulatory Compliance: Liechtenstein is a member of the European Economic Area (EEA), and it diligently implements the European Union’s 4th and 5th Anti-Money Laundering Directives and Regulation (EU) 2015/847.
  • Due Diligence Act (SPG) and Ordinance (SPV): Essential provisions can be found in the Law on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Act; SPG) and its accompanying Ordinance (SPV).
  • Beneficial Owner Register (VwbPG): The requirements of the Anti-Money Laundering Directives pertaining to beneficial owner registers have been brought to fruition via the Act on the Register of the Beneficial Owners of Legal Entities (VwbPG). The Office of Justice maintains this register.

Roles and Responsibilities

Financial Market Authority (FMA)

  • Monitors adherence to relevant AML regulations
  • Enforces regulations
  • Imposes measures and sanctions
  • Depends on data from the SPG reporting system
  • Conducts on-site inspections
  • Investigates any suspicions of abusive conduct

Persons Subject to Due Diligence (PSDD)

  • Financial institutions, Transaction Service Providers (TTSPs), and Designated Non-Financial Business Professionals (DNFBPs)
  • Adhere to rigorous AML regulations
  • Identify and verify clients, beneficial owners, and sources of funds
  • Ongoing transaction monitoring
  • File suspicious activity reports

Financial Intelligence Unit (FIU)

  • Processes reports of suspicion of money laundering and terrorist financing
  • Shares findings with the Office of Public Prosecutor
  • Examines potential systemic threats

Prosecution Authorities

  • Initiates investigations based on FIU analysis reports
  • Brings charges to the competent court
  • Enforces the Criminal Code and parts of the SPG

Courts

  • Play a significant role in the prosecution and resolution of AML/CFT cases

International Compliance

  • Dedication to AML/CFT efforts since the late 1990s
  • Adheres to the Financial Action Task Force (FATF) global gold standard
  • Member of MONEYVAL since 1999, a regional body based at the Council of Europe

MONEYVAL Reports

  • Fifth report in June 2022 acknowledges Liechtenstein’s progress
  • Placed among five member jurisdictions with regular follow-up process instead of enhanced process
  • Encouraged to continue intensifying AML/CFT measures