Liechtenstein has an open, internationally oriented financial market with a clear strategy, an essential component of which is the strict implementation of international standards. Liechtenstein follows a comprehensive strategic approach to effectively fight against Money Laundering and Financing of Terrorism (ML/FT), the predicate offences for ML and organized crime.
As a member of the European Economic Area (EEA), Liechtenstein implements all EU AML/CFT provisions. Moreover, as a member of MONEYVAL – the Council of Europe's Committee of Experts on the evaluation of AML/CFT measures – Liechtenstein has committed itself to implementing the recommendations of the Financial Action Task Force (FATF).
For many years, Liechtenstein has consistently relied on close cooperation of all national bodies responsible for the prevention of ML/FT in a whole of government approach that also involves the financial market participants. In this way, not only are corresponding FATF and EU requirements implemented, but actions are also taken in Liechtenstein’s own interest. Therefore, Liechtenstein’s strategic approach is above all based on the certainty that the effective fight against all forms of abuse is a fundamental pillar of the financial center. Liechtenstein authorities and financial market participants are aware of their respective central roles in the effective fight against ML and FT.
Identifying, assessing, and understanding ML/FT risks is an essential part of the implementation and development of a national AML/CFT regime. In recent years Liechtenstein authorities have conducted vigorous and in-depth information and data analysis to come to substantiated conclusions on the country’s risk exposure in National Risk Assessments (NRA).
The Liechtenstein financial center has a global client base. Clients benefit in particular from the fact that all of the essential financial products, as well as services, are offered in a small geographic area. While this can be a competitive advantage, it is also a challenge from a ML/FT risk perspective where a purely national approach falls short. Rather, risks are viewed, assessed and mitigated from a global perspective.
In 2020 Liechtenstein was the first country to introduce a comprehensive regulation and supervisory system regarding virtual assets (“Blockchain Act”), ensuring that relevant due diligence standards fully apply to the token economy. Due to this early regulation authorities were in the position to evaluate a set of data for the risk assessment. However, the field is developing rapidly. Liechtenstein authorities constantly monitor changes in the market and assess them from a risk perspective. This applies not only to developments on new technologies but to the financial market as a whole, giving Liechtenstein the opportunity to respond appropriately and promptly to changing or emerging risks.
The results of the risk assessments are central with respect to the improvement of national AML/CFT measures. Based on the results of the risk assessments, the Liechtenstein Government adopted an AML/CFT strategy and a resulting action plan. Further intensification of cooperation, coordination and exchange of information, not only at a national level, but at an international level, is a key priority for Liechtenstein. This includes a close cooperation on a strategic and an operational level between Liechtenstein authorities and their counterparts in the United States, e.g. FinCEN, the Office of Foreign Asset Controls, the Department of Justice and the Securities and Exchange Commission.