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Liechtenstein Takes Tough Stance Against Terrorism Financing, Meets International Standards

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Liechtenstein has implemented stringent laws and regulations to combat money laundering and terrorist financing, earning praise from international organizations.

AML/CTF Regime

At the heart of Liechtenstein’s anti-money laundering and combating the financing of terrorism (AML/CFT) regime is the Law on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism, also known as the Due Diligence Act.

Key Features

  • Requires financial institutions, trust service providers, and other designated non-financial businesses and professions to conduct thorough due diligence on their clients
  • Reports any suspicious activity to the authorities
  • Financial Market Authority (FMA) monitors compliance and imposes sanctions on violators
  • FMA conducts regular inspections of financial institutions and reviews reports of suspicious activity

Financial Intelligence Unit (FIU)

The FIU plays a crucial role in analyzing reports of suspicious activity and identifying patterns that may indicate money laundering or terrorist financing.

Process

  • If the FIU suspects a criminal offense has been committed, it reports its findings to the Office of the Public Prosecutor
  • The Office of the Public Prosecutor launches an investigation if necessary

Register of Beneficial Owners

The country’s Office of Justice maintains the Register of Beneficial Owners of Legal Entities, which requires companies and other entities to disclose their beneficial owners.

Benefits

  • Accessible to law enforcement agencies and financial institutions, making it easier to trace ownership of funds and identify potential money laundering or terrorist financing activities

International Cooperation

Liechtenstein has been actively participating in international efforts to combat money laundering and terrorist financing for decades and is a member of MONEYVAL, an FATF-style regional body.

Recognition

  • MONEYVAL praised Liechtenstein’s strong supervisory approach and progress in implementing the FATF Recommendations in its fifth report (2022)
  • The country was rated “compliant” or “largely compliant” with 37 out of 40 FATF Recommendations, with only three recommendations requiring improvement

European Level

Liechtenstein is part of the AML/CTF Standing Committee (AMLSC), which develops regulatory technical standards and guidelines in accordance with EU anti-money laundering directives.

Representation

  • The FMA represents Liechtenstein in the AMLSC as a non-voting member

Conclusion

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Liechtenstein’s robust AML/CFT regime has earned recognition from international organizations and praise for its efforts to combat money laundering and terrorist financing. The country’s strong supervisory approach, rigorous due diligence requirements, and effective reporting mechanisms make it an attractive destination for investors seeking a safe and secure environment for their investments.