Financial Crime World

Banking Fraud Prevention in Liechtenstein: A Comprehensive Overview

Liechtenstein has implemented stringent anti-money laundering (AML) measures and compliance requirements to prevent financial crimes, aligning with international standards set by the Financial Action Task Force (FATF). As a member of the European Economic Area, the country regularly incorporates European legal acts into its national law.

Due Diligence Requirements

Banks, investment firms, asset managers, and trust service providers are subject to due diligence requirements under the Due Diligence Act. These requirements include:

  • Identifying and Verifying Client Identities: Financial intermediaries must identify and verify the identity of clients through personal meetings or online verification processes.
  • Identifying and Verifying Beneficial Owners: Intermediaries must identify and verify the beneficial owners of assets.
  • Establishing a Business Profile: A profile must be established to monitor business relationships.
  • Risk-Adequate Monitoring of Business Relationships: Regular monitoring is required to ensure that business relationships are risk-adequate.

Politically Exposed Persons (PEPs)

A PEP is defined as a natural person who holds, or has held, a prominent public function, along with their immediate family members and close associates. Increased due diligence measures apply to business relationships and transactions involving PEPs.

Documentation Requirements

Financial intermediaries must collect specific customer and beneficial owner information before establishing a private banking relationship. For private individuals, this includes:

  • Full Name: Date of birth, address, citizenship, and TIN.
  • Proof of Address: Utility bills (not older than three months) are required as proof of address, along with certified passport or ID copies.

For legal entities, the required information includes:

  • Name or Firm: Type of legal entity, registered office, date of establishment, date and place of entry in the public register, TIN, and names of bodies or trustees acting on behalf of the legal entity.

Tax Offences

Tax offences are predicate offenses for money laundering. Acts punishable by more than one year of imprisonment qualify as predicate offenses, along with specific crimes such as fraud and breach of trust.

Compliance Verification

The Liechtenstein Banking Association requires banks to verify tax compliance of their clients through internal directives. Other financial intermediaries may also request tax compliance confirmations from clients or their tax advisors.

Liability

Financial intermediaries that fail to comply with due diligence measures under the Due Diligence Act face criminal prosecution or administrative procedures, depending on the type of failure. Clients and financial intermediaries committing financial crimes can face criminal prosecution, fines, or civil liability for failing to comply with money laundering or financial crime rules.