Financial Crime World

Title: Liechtenstein’s Commitment to Combating Financial Crime: AML/CFT Progress and Ongoing Measures

Liechtenstein’s Zero-Tolerance Approach to Financial Crime

The European principality of Liechtenstein maintains a zero-tolerance approach to financial crime, including money laundering and the financing of terrorism (AML/CFT). As a European Economic Area (EEA) member, Liechtenstein has implemented key EU Directives and Regulations:

  • 4th and 5th Anti-Money Laundering Directives and Regulation (EU) 2015/847

The Role of the Financial Market Authority (FMA)

The Financial Market Authority (FMA) is the frontline regulator implementing these regulations, focusing on compliance with AML/CFT obligations by institutions and individuals subject to due diligence. Its responsibilities include analyzing reports from the due diligence database, conducting on-site inspections, and pursuing sanctions.

Institutions and Individuals Subject to Due Diligence

Entities and individuals under due diligence obligations are as follows:

  • Financial institutions
  • Trust service providers
  • Designated Non-Financial Business Professions (DNFBPs)

Their AML/CFT Obligations

Institutions and individuals subject to due diligence fulfill the following obligations:

  1. Client identification and verification
  2. Beneficial owner identification and verification
  3. Source of funds and wealth clarification
  4. Ongoing transaction monitoring
  5. Reporting of suspicious transactions

The Financial Intelligence Unit (FIU) and Office of Public Prosecutor

The Liechtenstein FIU is a central repository for money laundering, precursor offenses, and terrorist financing, collaborating closely with local prosecution authorities. The Office of Public Prosecutor examines reports and investigates any potential offenses involving money laundering-related provisions.

EU Legislation and the Beneficial Ownership Register

Liechtenstein, with involvement in anti-money laundering efforts since 1999, is a member of MONEYVAL since 2001 and consistently upholds international standards set by the Financial Action Task Force (FATF). The Office of Justice maintains the beneficial ownership register to meet AML/CFT requirements.

Evaluation by MONEYVAL

During its most recent assessment conducted between 2021 and 2022, Liechtenstein was deemed to have strong systems and a broad understanding of money laundering and terrorist financing risks, ranking above many other member jurisdictions. MONEYVAL commended Liechtenstein for its improvements in AML/CFT measures and granted the country a regular follow-up process.

Compliance with FATF Recommendations

MONEYVAL reported that Liechtenstein complied with or largely complied with the FATF Recommendations in 37 out of 40 recommendations, demonstrating effective application of these regulations in practice with above-average results across five key areas.

Collaboration Among EEA Countries

To coordinate and harmonize AML/CFT efforts among the EEA countries, the European Banking Authority (EBA) centralizes responsibility for the financial market, and national supervisory authorities, including the FMA representing Liechtenstein, collaborate in the AML CFT Standing Committee (AMLSC) to develop guidelines and technical standards.