Financial Crime World

Title: Liechtenstein’s Anti-Money Laundering and Counter-Terrorist Financing Measures Assessed in MONEYVAL Report (May 2022)

Introduction

The MONEYVAL Committee of Experts has published its fifth round mutual evaluation report on Liechtenstein’s anti-money laundering (AML) and counter-terrorist financing (CTF) measures. In this comprehensive assessment, Liechtenstein’s compliance with international standards and the effectiveness of its systems are evaluated.

Location and Commitment

Located in the Alpine region of Central Europe, Liechtenstein is a small financial center that has demonstrated a good understanding of ML/CTF risks. The authorities have shown a commitment to countering financial crimes by implementing various policies and cooperating with international partners.

Key Findings

  1. Risk Assessment

    • Thorough risk assessments have been conducted.
    • Broad understanding of ML/CTF risks.
    • Need for further refinement in identifying risks related to tax offenses, use of financial services, and non-bankable assets held by trust and company service providers (TCSPs).

  2. Legal Framework

    • Sound legal framework.
    • Automatic implementation of UN Security Council Resolutions.
    • Criminalization of failure to report suspicious transactions.
    • Non-conviction-based confiscation.
    • Improvement needed in the area of sanctions.

  3. Financial Intelligence Unit (FIU)

    • High-quality analytical reports.
    • Used by law enforcement agencies for ML investigations.
    • Lack of resources to manage growing workload.
    • Need for more strategic analysis on TF, money laundering of proceeds of foreign tax crimes, and appropriate SAR/STR reporting.

  4. Investigation and Prosecution

    • Convictions for most ML types.
    • Effective communication between different agencies.
    • Financial investigations are routinely applied.
    • Lack of investigations targeting sophisticated ML schemes involving complex legal structures.

  5. Confiscation and Asset Forfeiture

    • Confiscation a priority.
    • Comprehensive legal framework.
    • Capacity strengthening.
    • Outcome of seizure/confiscation proceedings generally in line with the country’s risk profile.

  6. Cooperation with Neighboring Countries

    • Close cooperation with Switzerland and Austria.
    • Skills and knowledge to detect funds for TF purposes.
    • No TF investigations or convictions in Liechtenstein.

Recommendations

MONEYVAL offers the following recommendations to strengthen Liechtenstein’s AML/CTF system:

  • Improvements in risk assessment methodology.
  • Targeted financial sanctions.
  • Transparency and beneficial ownership of legal persons and legal arrangements.

These recommendations will help Liechtenstein maintain and enhance its position as a reputable international financial center committed to combating financial crimes.