Combating Financial Crimes  Liechtenstein Policy Statement

Combating and preventing money laundering, terrorist financing, corruption, organized crimes and tax evasion are a major focus of Liechtenstein’s financial center policy. Liechtenstein banking secrecy offers no protection to criminals and through the use of domestic and international legal mechanisms, financial secrecy is lifted in cases of suspected criminality. Liechtenstein has prevention and punishment systems to combat money laundering and terrorist financing.

Liechtenstein has made many comprehensive reforms in the regulation of its financial sector over the last ten years. Its initial reforms concentrated on anti-money laundering efforts. More recently, the government of Liechtenstein signed a landmark Tax Information Exchange Agreement (TIEA) with the United States and numerous other countries and concluded negotiations of an Anti-Fraud Agreement with the European Union. The United States government acknowledges Liechtenstein to be a trusted and effective collaborator in combating a wide range of financial crimes, including money laundering, terrorist financing, and tax fraud and recent reforms guarantee that Liechtenstein will provide the United States and others with a markedly increased range of cooperation on tax matters.

In addition to compliance with the highest international standards set by the Financial Action Task Force (FATF) in the fight against money laundering, Liechtenstein authorities also actively take part in the international dialogue on the further development of common standards. Milestones in the fight against money laundering and terrorist financing include:

• Liechtenstein is a State Party to the Convention of the Council of Europe on Money Laundering, Search, Seizure, and Confiscation of the Proceeds from Crime (1990)
• Implementation of the 1st EU Money Laundering Directive (1995)
• Due Diligence Act enters into force (1997)
• Total revision of the Liechtenstein Mutual Legal Assistance Act (2000)
• Establishment of the Liechtenstein Financial Intelligence Unit (2001)
• Mutual Legal Assistance Treaty with the United States and adoption of the “Counterterrorism Package” (2002)
• Tightening of the Law on Professional Due Diligence in Financial Transactions (Due Diligence Act) (2004)
• Establishment of the Liechtenstein Financial Market Authority through enactment of the Financial Market Authority Act (2004)
• Implementation of the 2nd EU Money Laundering Directive (2005)
• Partial revision of the Mutual Legal Assistance Act (2008)
• Implementation of the 3rd EU Money Laundering Directive (2008)
• Signing of a Criminal Law Convention on Corruption and a Second Additional Protocol to the European Convention on Mutual Assistance in Criminal Matters (2009)
• Liechtenstein is a member of the Group of States against Corruption (GRECO), the monitoring body established by the Council of Europe to improve the capacity of countries to prevent and combat corruption (2010)

Yet, there are twice as many businesses as citizens in the country, which collaborates closely with Switzerland.  If the US tax authorities are scrutinizing Swiss financial institutions, can Liechtenstein be far behind?  Why Liechtenstein