In a report published today, MONEYVAL encourages Liechtenstein’s authorities to further strengthen measures to combat money laundering (ML) and financing of terrorism (FT). The Council of Europe’s anti-money laundering body draws up a comprehensive assessment of the country’s level of compliance with international standards set by the Financial Action Task Force (FATF).
MONEYVAL acknowledges that the country has demonstrated a substantial level of effectiveness with understanding of ML/TF risk, setting national AML/CFT policies and co-ordination, use of financial intelligence, confiscation of proceeds of crime, terrorist financing investigations and prosecution, and international cooperation. The report finds that further improvements are needed in enhancing supervision, application of AML/CFT preventative measures by the private sector, transparency of beneficial ownership of legal persons and legal arrangements, money laundering investigation and prosecution and implementation of targeted financial sanctions.
MONEYVAL compliments Liechtenstein for having a broad and convergent understanding of its core ML/TF risks. The report also notes that, although a more comprehensive understanding of risks in some particular areas is needed, this endeavour would only require refinements to a well-established risk assessment process.
Whilst the report finds that competent authorities produce good quality financial intelligence and are successful in confiscating the proceeds of crime, more efforts need to be invested in investigating and prosecuting money laundering of the widest range of foreign predicates, which target sophisticated ML schemes, including complex legal structures established and managed in the country.
Being geographically surrounded by Switzerland and Austria, Liechtenstein closely cooperates with both countries in combatting terrorism and TF. The report, which examines the features of TF related investigatory actions carried out by the competent authorities, concludes that these authorities are equipped with skills and knowledge to detect collection, movement and use of funds for TF purposes.
Understanding of ML/TF risks and obligations is now generally good in the private sector. Banks and large trust and company service providers demonstrated the best understanding of ML/TF risks, linked to private banking and wealth management. The supervisory approach applied by the main AML/CFT supervisory authority has been subject to a significant overhaul and greater use is now made of inspections conducted by its own staff, rather than external audit firms. This notwithstanding, supervision over entities assessed as presenting a high or medium-high risk is found not to be sufficient.
Beneficial ownership (BO) information on legal persons and legal arrangements is available to competent authorities from a register maintained by the Office of Justice and directly from the private sector. Whilst the report notes that there has been no difficulty in accessing this information in a timely manner, the completeness and plausibility of information held in the BO register has not yet been a subject of monitoring by the Office of Justice.
Finally, the report concludes that, although there are some procedural constraints, Liechtenstein provides timely and constructive assistance across the range of requests for international co-operation, including mutual legal assistance.
Liechtenstein will be subject to MONEYVAL’s regular follow-up reporting process as a result of the positive report, becoming one of only five member-jurisdictions with this outcome so far.