The Principality of Liechtenstein attaches high priority to the fight against money laundering in accordance with its economic strategy of recent years. Following the ratification and implementation of the 4th Anti-Money Laundering Directive ("AMLD-4") and the associated amendment of the Mutual Legal Assistance Act (RHG), a new amendment of the RHG is now intended to close unintended legal gaps.
Since January 1st 2016, foreign tax offences that are also punishable by law in Liechtenstein, are in general subject to legal assistance. Previously, legal assistance was not possible at all for tax offences due to a reservation on tax offences. The offences eligible for legal assistance include tax fraud (art. 140 SteG & art. 88 MWSTG), misappropriation of taxes to be deducted at source (art. 141 SteG), receiving of property on which no tax has been paid (art. 90 MWSTG) and qualified tax evasion (art. 89 MWSTG). Pursuant to art. 64 RHG, foreign criminal court decisions (fines or imprisonment) against Liechtenstein citizens resident in Liechtenstein may be enforced in Liechtenstein, provided that the offence is punishable in both countries.
Currently, foreign requests for mutual legal assistance concerning the above-mentioned tax offences can lead to investigative measures such as freezing accounts, handing over documents to foreign prosecuting authorities and subsequently to a conviction abroad.
Convictions for property or tax offences usually lead to the penal forfeiture of the assets involved. However, the current legal situation leads to the paradoxical result that, although legal assistance is provided for the investigation procedure for foreign criminal prosecution of tax offences, the subsequent order for forfeiture of incriminated funds (in the course of the conviction) issued abroad cannot be enforced in Liechtenstein. Such requests must be dismissed by the Principal Court due to the exclusion of tax offences according to art. 64 (1) (3) RHG.
The presented draft law is therefore now intended to create the possibility of enforcing foreign orders in connection with convictions for tax offences.
Originally Published 22 April, 2020
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