Financial Crime World

Liechtenstein’s Financial System Under Scrutiny for Links to Terrorism Financing

A Recent Report Raises Concerns about Compliance with Global Standards

A recent report by the Financial Action Task Force (FATF) has raised concerns about Liechtenstein’s compliance with global standards in combating financial crimes and terrorism financing. While the country received a “largely compliant” rating, several areas of concern were identified.

Progress Made, But Areas of Concern Remain

According to the report, Liechtenstein has made progress in implementing the technical requirements of the FATF Recommendations. However, it was found to be partially compliant in certain areas, including:

  • Confiscation and provisional measures
  • Terrorist financing offence
  • Customer due diligence

Additionally, the report highlighted some non-compliant areas, such as:

  • Transparency and beneficial ownership of legal persons and arrangements
  • Regulation and supervision of DNFBPs (Designated Non-Financial Businesses and Professions)
  • Powers of supervisors

Areas for Improvement Identified

The FATF report also praised Liechtenstein’s efforts in implementing certain measures, such as:

  • National cooperation and coordination
  • Money laundering offence
  • Financial intelligence units

However, it emphasized the need for further improvement in these areas.

Liechtenstein’s financial system has been under scrutiny in recent years due to concerns about its potential links to terrorism financing. The country’s small size and high level of financial secrecy have raised concerns among international authorities.

Government Response

In response to the report, Liechtenstein’s government has pledged to address the identified shortcomings and improve its compliance with global standards. However, it remains to be seen whether the country will take concrete steps to strengthen its anti-money laundering and counter-terrorist financing regime.

Implications for Reputation and Economy

The FATF report is a significant blow to Liechtenstein’s reputation as a financial hub, and it may have implications for its relations with other countries and international organizations. The country’s failure to adequately address these concerns could result in reputational damage and economic consequences.