Financial Crime World

Title: “Liechtenstein’s Crusade Against Money Laundering: A Zero-Tolerance Approach”

Introduction

The Principality of Liechtenstein is renowned for its commitment to combating money laundering and terrorist financing (ML/TF), with a zero-tolerance policy and robust legislation in place. This small European nation, an EEA member, has adopted the EU’s 4th and 5th Anti-Money Laundering Directives (AMLDS) and Regulation (EU) 2015/847 on funds transfers.

Key Legislation

  • Law on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime, and Financing of Terrorism (SPG) and its associated Ordinance (SPV)
  • Act on the Register of the Beneficial Owners of Legal Entities (VwbPG)

Responsibilities

Financial Market Authority (FMA)

  • Monitors adherence to AML/CFT rules by relevant entities
  • Imposes sanctions for violations
  • Analyzes data from the reporting system
  • Conducts on-site inspections
  • Follows up on suspicious financial market conduct

Persons Subject to Due Diligence

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

Tasks

  • Client identification and verification
  • Determining beneficial owners
  • Clarifying clients’ sources of funds
  • Ongoing transaction monitoring
  • Reporting suspected ML/TF activities

Financial Intelligence Unit (FIU)

  • Analyses and disseminates ML/TF suspicions received from various sources
  • Collaborates with law enforcement agencies regarding investigations

Prosecution Authorities

  • Examines the FIU’s reports and initiates investigations
  • Files charges
  • Pursues enforcement of related criminal code offenses

Office of Justice

  • Maintains the register of Liechtenstein companies, foundations, and trusts’ beneficial owners
  • Provides essential transparency and facilitates effective information sharing among authorities

International Standards and Compliance

Liechtenstein’s commitment to anti-money laundering efforts is in line with global standards, such as the Financial Action Task Force (FATF). The following achievements have been recognized in the latest MONEYVAL evaluation report:

  • Proven understanding of ML/TF risks
  • Significant improvement since the previous evaluation
  • Compliance or largely compliant with 93% of the FATF Recommendations
  • Effective implementation of regulations that exceeded expectations in five of eleven category evaluations

Conclusion

Liechtenstein’s dedication to implementing rigorous AML/CFT regulations and its robust enforcement efforts have positioned it as a leader in the fight against money laundering and terrorist financing within the European context.