Headline: Liechtenstein Bolsters Financial Crime Prevention Measures Amid Global Scrutiny

Liechtenstein’s Financial Sector and Vulnerabilities

• Amid growing focus on financial crime prevention, the Principality of Liechtenstein is enhancing its regulations against money laundering and terrorist financing (IMF, 2007).
• Financial sector primarily offers wealth management services to over 90% of non-resident clients.
• Vulnerability to money laundering: significant expansion in non-banking areas, particularly in the layer phase.
• No detected vulnerability to terrorist financing.

Progress and Challenges

• Significant legislative amendments and institutional restructuring since being labeled a ’non-cooperative country or territory’ by FATF in 2000.
• Money laundering criminalized, but law lacks criminal liability for legal entities.
• Ineffective SAR system: improvement could enhance prevention efforts.

Combating Financial Crimes

• Supervision of financial institutions and DNFBPs by Financial Market Authority (FMA).
• Concerns regarding coverage and international standards’ adherence.

Preventive Measures and Recommendations

Customer Due Diligence (CDD)

• Obligation to maintain customer profiles, including beneficial ownership, source of funds, and relationship purpose.
• Excessive discretion for financial institutions: additional measures advised.

IMF Assessment Recommendations

• Enhance identification of beneficial owners.
• Strengthen reporting systems.
• Improve communication and collaboration between law enforcement and financial institutions.

Series Summary

This article is one in a series exploring financial crime prevention initiatives taken by various countries.