Financial Crime World

Emerging Risks in Financial Crime Prevention in Liechtenstein

Liechtenstein’s financial market has long been a haven for international investors due to its open and transparent nature. The country has implemented a comprehensive strategy to combat money laundering and financing of terrorism (ML/FT), which has become an essential component of its national approach.

Compliance with International Regulations

As a member of the European Economic Area (EEA), Liechtenstein adheres to all EU Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) provisions. Furthermore, as a member of MONEYVAL, the Council of Europe’s Committee of Experts on the evaluation of AML/CFT measures, Liechtenstein has committed itself to implementing the recommendations of the Financial Action Task Force (FATF).

Collaboration and Cooperation

Over the years, Liechtenstein has successfully relied on close cooperation among all national bodies responsible for preventing ML/FT in a whole-of-government approach that also involves financial market participants. This collaborative effort not only ensures compliance with FATF and EU requirements but also takes into account the country’s own interests.

Identifying and Assessing ML/FT Risks

  • Identifying, assessing, and understanding ML/FT risks is a critical aspect of developing and implementing a national AML/CFT regime.
  • Liechtenstein authorities have conducted thorough information and data analysis to determine the country’s risk exposure through National Risk Assessments (NRAs).
  • The results of these risk assessments are crucial for improving national AML/CFT measures.

Addressing Global Client Base Risks

The Liechtenstein financial center boasts a global client base, which presents both opportunities and challenges from an ML/FT risk perspective. To address this, risks are viewed and assessed from a global rather than purely national perspective.

Regulation of Virtual Assets

In 2020, Liechtenstein became the first country to introduce comprehensive regulation and supervision of virtual assets (“Blockchain Act”), ensuring that relevant due diligence standards apply to the token economy.

Monitoring Emerging Risks

With rapid market developments in new technologies and the financial sector as a whole, authorities continually monitor changes from a risk perspective, enabling them to respond promptly to emerging risks.

Cooperation with International Partners

The Liechtenstein Government has adopted an AML/CFT strategy and action plan, emphasizing intensified cooperation, coordination, and exchange of information at both a national and international level. This includes close cooperation with counterparts in the United States, such as FinCEN, the Office of Foreign Asset Controls, the Department of Justice, and the Securities and Exchange Commission.

Conclusion

As Liechtenstein continues to navigate the complex landscape of financial crime prevention, it remains committed to its whole-of-government approach, recognizing that effective combat against ML/FT is a fundamental pillar of its financial center.