Liechtenstein Urged to Strengthen Anti-Money Laundering and Counter-Terrorism Financing Measures

A recent evaluation report by the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) has identified areas where Liechtenstein needs to improve its anti-money laundering (AML) and counter-terrorism financing (CTF) measures. The report highlights several key issues that the country must address in order to strengthen its AML/CFT regime.

Effective Supervision of Financial Institutions and Private Sector

• The report notes that while there has been progress in implementing AML/CFT policies, there are still exemptions that are not supported by a country risk assessment.
• Investment funds are widely used but have not undergone a thorough risk assessment.

Transparency Regarding Beneficial Ownership (BO)

• MONEYVAL criticizes the lack of transparency regarding BO of legal persons and legal arrangements.
• While basic information on BO is generally accurate and up-to-date, there is no evidence to suggest that this is the case for BO information.
• Compliance with reporting obligations was limited, and fewer tax offenses were reported than expected.

Role of the Financial Intelligence Unit (FIU)

• The FIU plays a crucial role in gathering financial information, but MONEYVAL notes that suspicious activity reports (SARs)/suspicious transaction reports (STRs) submitted by persons subject to the Due Diligence Act (DDA) are generally commensurate with the prevalence of revenue-generating crimes in the country.
• However, the FIU has rarely targeted higher-risk predicate offenses such as tax offenses.

International Cooperation

• The report highlights concerns regarding international cooperation, particularly in relation to double criminality requirements for tax evasion and the obligation to hear the eligible party before providing evidence to a foreign jurisdiction.
• While measures have been taken to minimize these risks, MONEYVAL notes that there is still room for improvement.

Initiatives to Address Concerns

To address these concerns, Liechtenstein has committed to strengthening its AML/CFT regime through a number of initiatives, including:

• Improving supervision and oversight
• Enhancing transparency regarding BO
• Increasing international cooperation

The government has also pledged to review and revise existing laws and regulations to ensure they are effective in preventing money laundering and terrorism financing.

Government Response

In response to the report, Liechtenstein’s government said that it is committed to addressing the concerns raised by MONEYVAL and will work to strengthen its AML/CFT regime. “We take these recommendations seriously and will implement the necessary measures to improve our AML/CFT framework,” a government spokesperson said. “Our goal is to ensure that we have a robust and effective system in place to prevent money laundering and terrorism financing.”